Judge Robert W. Sweet of the U.S. District Court for the Southern District of New York recently weighed in on the standing of a chapter 15 debtor’s foreign representative to allege a violation of the automatic stay following commencement of an action against a debtor’s non-debtor affiliates. Further, Judge Sweet spoke to the extension of comity – legal reciprocity between jurisdictions – to orders of a foreign court. Specifically, Judge Sweet’s decision stayed an action brought by CT Investment Management LLC, a U.S. party, against Pablo Gonzalez Carbonell and Grupo Costamex, S.A. de C.V., guarantors on certain obligations of Grupo Costamex’s chapter 15 debtor subsidiary, Cozumel Caribe S.A. de C.V. CT Investment’s action alleged a breach of a guaranty agreement entered into in connection with Cozumel Caribe’s development and operation of several resort properties in Mexico. The decision is part of a growing body of case law recognizing the authority of a chapter 15 foreign representative to manage a debtor’s international insolvency. See CT Investment Management Co., LLC v. Carbonell, 2012 U.S. Dist. LEXIS 3356, *16 (S.D.N.Y. Jan. 12, 2012).

CT Investment’s action in the Southern District followed numerous failed attempts to bring the same claims against the defendants in the Mexican District Court, where debtor Cozumel Caribe commenced a concurso mercantile, or voluntary bankruptcy. CT Investment’s claims were prohibited in the Mexican District Court pursuant to a May 2010 order staying actions on guarantees associated with debtor Cozumel Caribe. In August 2010, CT Investment sought and was denied a suspension of the Mexican court order by the Mexican District Court. CT Investment requested a review of the Mexican District Court’s decision by the Mexican Appellate Court, which appeal was denied in August 2010. Subsequently, CT Investment commenced litigation in the Southern District seeking to enforce the guarantees...

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