relating to reorganization and insolvency respectively. Though there is no mechanism for reorganization under Bahamian Law, the US Bankruptcy Court seemed to have accepted that in the absence of any likely stakeholder agreement under Chapter 11, the impact that the Chapter 11 proceedings would have on the numerous creditors affected by the process would not necessarily yield a beneficial result. Furthermore, the fact that insolvency proceedings were already pending in The Bahamas with respect to the Bahamian Companies likely played an influential role in determining whether the US Bankruptcy Court should divest jurisdiction over the Bahamian Companies particularly as the Bahamian Courts had already declined recognition of the Chapter 11 proceedings. Further, cooperation between the two courts by way of any protocol to the date of judgment seemed unlikely.
It was also considered that the plan as proposed by the Debtors would leave the treatment of the Bahamian creditors for disposition outside of the US Court which would invite further dispute and litigation. If the US Bankruptcy Court was convinced that denying the dismissal motions would have the effect desired by the Debtors of bringing all parties back to the bargaining table, it may have considered denying the dismissal motions, but the evidence did not reflect that.
However, the US Bankruptcy Court agreed with the ruling of Justice Winder of the Bahamian Supreme Court that many of the stakeholders expected that any insolvency proceedings would take place in The Bahamas and not the United States, and such expectations should be respected.
Conclusion
The UNCITRAL Model Law on cross border insolvency is not in force in The Bahamas although it is in the United States and 22 other countries. The Model Law is based upon the principle that the main proceedings should be where the company’s main interests are centered (COMI) starting with the presumption that the registered office is there. If the Model Law was adopted in The Bahamas it would have provided for a different outcome. Secondly, it seems even under Bahamian law due to the fact that the proceedings were not first opened in The Bahamas there were issues with seeking to recognize the Chapter 11 proceedings as the main proceedings and there is no list of relevant foreign countries to whom assistance could be given. The proceedings were commenced in the United States while the registered office, or presumed COMI in the Baha Mar case for the 14 Bahamian Companies was The Bahamas. If however, the main-proceedings in the Baha Mar case were first opened before seeking to enter into Chapter 11 proceedings in the United States, and the US was designated as a relevant foreign country to whom assistance could be granted, quite possibly this case may have provided for a cross-border restructuring outcome.
I