[co-author: Andrew Wit, Law Clerk]
On March 5, 2020, the Bankruptcy Court for the District of Puerto Rico (“Bankruptcy Court”) entered an order converting a set of jointly-administered chapter 7 bankruptcy cases to cases pending under chapter 15 of the United States Bankruptcy Code (“Bankruptcy Code”).
After discovering that they were likely the victims of a fraudulent investment scheme, a number of the defrauded investors (“Petitioning Creditors”) swiftly took action. In total, the quantum of fraud amounted to over $55 million and was perpetrated by an individual, Ronald Talmage utilizing a network of companies (the “Debtors”) as cover for a Ponzi scheme. In 2017, one of the Debtors’ secured creditors placed the Debtors into a British Virgin Islands receivership. Subsequently, after identifying potential assets of such companies located within the United States, the Petitioning Creditors filed involuntary petitions for relief under chapter 7 of the Bankruptcy Code on August 26, 2019. Around the same time, one of the Petitioning Creditors sought to liquidate the Debtors in the BVI and filed an Originating Application for the appointment of liquidators to the Debtors.
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