The opinion of the court was delivered by: Lewis A. Kaplan, District Judge
This document relates to 04 MD 1653 (LAK)
Grant Thornton International ("GTI") and Grant Thornton LLP ("GT LLP") (collectively, "GT") move for an order modifying the preliminary injunction previously entered under Section 304 of the Bankruptcy Code*fn1 (the "304 Order") to permit them to assert certain claims in the Securities Fraud Action and one of the Recovery Actions, as those terms were defined in In re Parmalat Finanziaria S.p.A.*fn2 This order assumes familiarity with that opinion and with my unreported bench opinion of March 29, 2006, in which I granted a motion by Bank of America ("BoA") to modify the 304 Order.*fn3
The scope of the present controversy is very narrow. Dr. Bondi, the Extraordinary Commissioner of the Parmalat entities that are in bankruptcy proceedings in Italy and the plaintiff in the Recovery Actions, previously consented to the modification of the 304 Order to permit the assertion against Parmalat of compulsory counterclaims. GT, for its part, seeks to assert only the following claims:
* Counterclaims by GTI and GT LLP in the relevant Recovery Action for damages for spoliation of evidence.
* A counterclaim by GTI in the relevant Recovery Action and a third-party complaint in the Securities Fraud Action for contribution for any liability that GTI may be found to owe in the Securities Fraud Action.
Moreover, GT wishes only to liquidate in these actions the amount of any liability owed to it in excess of any amounts owed by it to Dr. Bondi. It agrees that it will seek to enforce any judgment for any such amount only in Italy and that its enforceability would be a matter for determination of the Italian courts.
Dr. Bondi resists this application. He begins by disputing that the counterclaims are compulsory, no doubt because he justifiably wishes to reconcile his present position with his previous consent to the assertion of compulsory counterclaims. He argues that the interests of judicial economy do not compel allowance of GT's counterclaims and that impleader of Parmalat into the Securities Fraud Action would contravene the principles of Section 304 because it is unnecessary to just treatment and ignores the importance of comity.
Section 304 was enacted in 1978 "to deal with the complex and increasingly important problems involving the legal effect the United States courts will give to foreign bankruptcy proceedings."*fn4
The statute provides that a court, in determining whether to grant Section 304 relief, "shall be guided by what will best assure an economical and expeditious administration of [the foreign] estate, consistent with" six factors.*fn5 Those most relevant here appear to be "comity" and "just treatment of all holders of claims against or interests in [the foreign] estate."
A. The Spoliation Counterclaims
Dr. Bondi sues GT for damages on the theory that it was complicit in the massive fraud allegedly committed by Parmalat insiders. GT's spoliation claim alleges that Parmalat insiders destroyed evidence as the fraud began to emerge into the public view in December 2003 ...