Singapore Liquidator for Wayne Burt Pte Ltd (in Liquidation) obtains recognition of Singapore default judgment requiring turnover of estate assets
Client(s) Mann, Farooq Ahmad as Singapore Liquidator of Wayne Burt Pte Ltd
Jones Day represented Farooq Ahmad Mann, in his capacity as foreign representative (the "Foreign Representative") of Wayne Burt Pte Ltd (in Liquidation) ("Wayne Burt"), the subject of a Singapore liquidation proceeding commenced in November 2018, in what appears to be the first-ever recognition of a Singapore default judgment issued in connection with a Singapore liquidation process. Jones Day filed a chapter 15 petition on October 8, 2024 in the United States Bankruptcy Court for the District of New Jersey (the "Bankruptcy Court") and obtained recognition of the Singapore liquidation proceeding as a foreign main proceeding on November 7, 2024.
The circumstances necessitating the chapter 15 filing involved, in large part, ongoing litigation pending in the United States District Court for the District of New Jersey (the "District Court Litigation") commenced in January 2020 by alleged creditors, Vertiv Capital, Inc. and certain of its affiliates (collectively, the "Vertiv Entities") against Wayne Burt. In the District Court Litigation, the Vertiv Entities claimed to own the shares of Cetex Petrochemicals, Ltd. due to Wayne Burt's alleged default on a purported loan the Vertiv Entities provided to Wayne Burt for which the shares were pledged. The complex procedural history of the District Court Litigation included multiple amended complaints, consent judgments in favor of the Vertiv Entities that were later vacated upon request of the Foreign Representative, multiple rounds of motions to dismiss, an appeal to the Third Circuit which resulted in the Third Circuit remanding the case to the District Court to apply a refreshed international comity test, and ongoing discovery requests and disputes. While the Third Circuit appeal was pending, the Foreign Representative commenced litigation in Singapore and requested an order requiring the Vertiv Entities to return the shares to Wayne Burt. The Vertiv Entities did not participate in the Singapore proceeding, which resulted in a default judgment against the Vertiv Entities (the "Cetex Order"). The Vertiv Entities disregarded the Cetex Order and continued to engage in the District Court Litigation.
The relief obtained in the chapter 15 proceeding demonstrates the strategic advantages of deploying chapter 15 when there is a pending foreign insolvency proceeding. Within approximately three months after retaining Jones Day—following four years of complex and prolonged litigation history—the Foreign Representative sought and obtained an order recognizing and enforcing the result he had been seeking for years. Specifically, within 65 days of filing the chapter 15 petition, the Bankruptcy Court issued orders (i) recognizing the Singapore liquidation proceeding as a foreign main proceeding, which stayed the District Court Litigation; and (ii) recognizing and enforcing the Cetex Order and requiring the Vertiv Entities to return the shares to Wayne Burt. In the Bankruptcy Court's ruling regarding recognition and enforcement of the Cetex Order, the court reasoned that the "principles of comity and the underlying objectives of Chapter 15" do not allow the Bankruptcy Court to "stand in appellate review of the rulings made by the Singapore High Court" especially where the Vertiv Entities "maintain[] the capacity to pursue appeals and other necessary relief from the foreign court."
In re Wayne Burt Pte. Ltd. (in Liquidation), Case No. 24-19956 (MBK) (Bankr. D.N.J. December 6, 2024)
