Mark Thomas Bradley
| Jurisdiction | England & Wales |
| Judge | Burton,Catherine Burton |
| Judgment Date | 27 September 2022 |
| Neutral Citation | [2022] EWHC 2412 (Ch) |
| Docket Number | Case No: CR-2022-002875 |
| Court | Chancery Division |
[2022] EWHC 2412 (Ch)
INSOLVENCY AND COMPANIES COURT JUDGE Burton
Case No: CR-2022-002875
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES COURT (ChD)
IN THE MATTER OF ASTORA WOMEN'S HEALTH LLC
AND IN THE MATTER OF THE CROSS-BORDER INSOLVENCY REGULATIONS
2006
Royal Courts of Justice
Rolls Building
EC4A 1NL
Adam Al-Attar (instructed by Skadden, Arps, Slate, Meagher & Flom (UK) LLP) for the Applicant
Hearing date: 16 September 2022
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
INSOLVENCY AND COMPANIES COURT JUDGE Burton
This morning I considered an application by Mark Thomas Bradley by way of Application Notice dated 1 September 2022 (the “ Recognition Application”) for the recognition of U.S. bankruptcy proceedings under Chapter 11 of the U.S. Bankruptcy Code (the “ Chapter 11 Proceedings”) in respect of Astora Women's Health LLC (“ Astora” or the “ Company”). At 11.31 a.m. I made an order recognising the Chapter 11 Proceedings as “foreign main proceedings” under Article 17 of Schedule 1 to the Cross-Border Insolvency Regulations 2006/1030 (the “ CBIR”). I set out in this judgment, my reasons for doing so.
The Applicant, Mr Bradley is the Chief Financial Officer of Astora, its affiliates and their collective parent company Endo International plc (“ Endo”). The Recognition Application is supported by Mr Bradley's first affidavit dated 31 August 2022 and the first affidavit of George Panagakis, a partner at Skadden, Arps, Slate, Meagher & Flom LLP, the firm advising Mr Bradley in relation to the Chapter 11 Proceedings.
Background
Astora is a Delaware limited liability company which is operated and managed from Wilmington, Delaware, USA. Astora has no on-going business operations or assets. Since 2008, it has been subject to over 30,000 litigation claims brought by patients who received implantable surgical mesh products for the treatment of conditions including urinary incontinence and pelvic organ prolapse, such implants having been manufactured and distributed by Astora or its predecessor entities. The vast majority of the claims have been brought in the United States, with some additional claims having also been brought in Australia, Canada, Ireland and the Netherlands, and of relevance to today's application, 13 claims have been brought in the courts of England and Wales and 56 in Scotland (these latter two being the “ GB Claims”).
On 16 August 2022, Astora, Endo and 76 members of the Endo group filed petitions in the United States Bankruptcy Court for the Southern District of New York to commence bankruptcy proceedings under chapter 11 of title 11 of the United States Code. No order has been made for substantive consolidation of each of the Chapter 11 cases, but for procedural convenience, they are being jointly administered under Docket Number 22-22549.
By his Recognition Application, Mr Bradley seeks to stay the GB Claims with a view to the claimants in such cases pursuing their claims, instead, against Astora in the Chapter 11 Proceedings.
To date, Astora has paid more than US$3 billion by way of settlement payments funded from the proceeds of a sale of its men's health business and credit provided to the Endo group. Following the commencement of the Chapter 11 Proceedings, the Endo group is not under any obligation to continue to fund Astora. The Chapter 11 Proceedings contemplate a sale of Endo group's remaining business pursuant to section 363 of the US Bankruptcy Code in which the group's first lien secured lenders will provide a stalking horse credit bid.
Mr Bradley's first affidavit explains that he considers that a stay of the proceedings in Great Britain will reduce the time and cost burden of Astora defending litigation in GB jurisdictions thus helping to preserve the value of its business for the benefit of those of its stakeholders who may ultimately be entitled to a distribution.
Legal principles – the Cross Border Insolvency Regulations 2006
The CBIR were introduced pursuant to section 14 of the Insolvency Act 2000 in order to give effect, in Great Britain, to UNCITRAL's Model Law on Cross-Border Insolvency. Schedule 1 to the CBIR sets out the Model Law as it takes effect in Great Britain (the “ Model Law in GB”). Each of the articles referred to below are to articles of the Model Law in GB.
Article 15(1) provides:
“1. A foreign representative may apply to the court for recognition of the foreign proceeding in which the foreign representative has been appointed.
2. An application for recognition shall be accompanied by:
(a) a certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or
(b) a certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or
(c) in the absence of evidence referred to in sub-paragraphs (a) and (b), any other evidence acceptable to the court of the existence of the foreign proceeding and of the appointment of the foreign representative.
3. An application for recognition shall also be accompanied by a statement identifying all foreign proceedings, proceedings under British insolvency law and section 426 requests in respect of the debtor that are known to the foreign representative.
4. The foreign representative shall provide the court with a translation into English of documents supplied in support of the application for recognition.”
Article 16(1) provides:
‘If the decision or certificate referred to in paragraph 2 of article 15 indicates that the foreign proceeding is a proceeding within the meaning of sub-paragraph (i) of article 2 and that the foreign representative is a body or person within the meaning of sub-paragraph (j) of article 2, the court is entitled to so presume.’
Article 17 provides:
“1. Subject to article 6, a foreign proceeding shall be recognised if:
(a) it is a foreign proceeding within the meaning of sub-paragraph (i) of article 2;
(b) the foreign representative applying for recognition is a person or body within the meaning of sub-paragraph (j) of article 2;
(c) the application meets the requirements of paragraphs 2 and 3 of article 15; and
(d) the application has been submitted to the court referred to in article 4.
2. The foreign proceeding shall be recognised:
(a) as a foreign main proceeding if it is taking place in the State where the debtor has the centre of its main interests; or
(b) as a foreign non-main proceeding if the debtor has an establishment within the meaning of sub-paragraph (e) of article 2 in the foreign State.”
The term “foreign proceeding” is defined in article 2(i) as:
“a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the assets and affairs or the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation”.
Article 2(j) provides:
“‘foreign representative’ means a person or body, including one appointed on an interim basis, authorised in a foreign proceeding to administer the reorganisation or the liquidation of the debtor's assets or affairs or to act as a representative of the foreign proceeding”.
Recognition under article 17 is expressly subject to article 6 which provides:
“Nothing in this Law prevents the court from refusing to take an action governed by this Law if the action would be manifestly contrary to the public policy of Great Britain or any part of it.”
Article 20 sets out various mandatory consequences of recognition of foreign main proceedings including a stay on the commencement or continuation of actions or proceedings concerning the debtor's assets, rights, obligations and liabilities. Article 20(2) provides that the stay shall be the same in scope and effect as if the debtor had been made the subject of a winding-up order under the Insolvency Act 1986.
It is relevant to note at this juncture that section 130(2) of the Insolvency Act 1986 provides:
“When a winding-up order has been made … no action or proceeding shall be proceeded with or commenced against the company or its property, except by leave of the court and subject to such terms as the court may impose.”
Article 21 sets out additional, discretionary relief that may be granted, inter alia, on recognition of a foreign proceeding. No such relief is sought by Mr Bradley in his Recognition Application.
Regulation 2(2) of the CBIR provides:
“(2) Without prejudice to any practice of the court as to the matters which may be considered apart from this paragraph, the following documents may be considered in ascertaining the meaning or effect of any provision of the UNCITRAL Model Law as set out in Schedule 1 to these Regulations:
(a) the UNCITRAL Model Law;
(b) any documents of the United Nations Commission on International Trade Law and its working group relating to the preparation of the UNCITRAL Model Law; and
(c) the Guide to Enactment of the UNCITRAL Model Law (UNCITRAL document A/CN.9/442) prepared at the request of the United Nations Commission on International Trade Law made in May 1997 (“ Guide to Enactment”).”
Regulation 7 of the CBIR provides:
“(1) An order made by a court in either part of Great Britain in the exercise of jurisdiction in relation to the subject matter of these Regulations shall be enforced in the other part of Great Britain as if it were made by a court exercising the corresponding jurisdiction in that other part.
(2) However, nothing in paragraph (1)...
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