Comair’s Business Rescue Proceedings recognized by the US Bankruptcy Court in New York
03 May 2021
The business rescue practitioners of Comair, namely Richard Ferguson and Shaun Collyer ("Redford"), together with Bernard Monteverdi and their attorneys, Eric Levenstein and Nastascha Harduth of Werksmans Incorporated ("Werksmans"), recently made history in the ongoing Comair business rescue matter.
Redford and Werksmans collaborated with John Pintarelli of the New York-based law firm, Pillsbury Winthrop Shaw Pittman LLP, and launched an application before the United States Bankruptcy Court, Southern District of New York to have the South African business rescue proceedings of Comair Limited recognised in the United States.
In a late-night hearing on 1 April 2021, Judge James Garrity ruled that the South African business rescue proceeding was to be recognised as a "foreign main proceeding" and granted an automatic stay of all claims against Comair in the United States. This was important as the "stay" now prevents US creditors from instituting significant dollar-based claims against Comair and further protects Comair's property situated in the United States. In addition, the order authorises the South African business rescue practitioners of Comair to administer or realise all or part of Comair's assets in the territorial jurisdiction of the United States during Comair's ongoing business rescue process.
This is the first time that a South African Chapter 6 Business Rescue proceeding has been recognised by a foreign court, and sets a precedent for future recognition proceedings brought in the USA and other foreign jurisdictions going forward. A copy of the order handed down by the United States Bankruptcy Court Southern District New York is attached.
This is a groundbreaking precedent for South Africa and the South African business rescue process.