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Securities Investor Protection Corporation v. Bernard L. Madoff Investment Securities LLC


May 4, 2012


Adv. Pro. No. 08-1789 (BRL) Adv. Pro. No. 10-05342 (BRL)

The opinion of the court was delivered by: J. Paul Oetken, District Judge:

SIPA LIQUIDATION (Substantively Consolidated)


In the adversary proceeding below, Irving H. Picard (the "Trustee"), as Trustee for the substantively consolidated Securities Investor Protection Act ("SIPA")*fn1 liquidation of Bernard L. Madoff Investment Securities LLC ("BLMIS") and Bernard L. Madoff, brought an application seeking injunctive relief against MAXAM Absolute Return Fund LTD ("Maxam Limited" or "Appellant"). The Bankruptcy Court granted that application in an October 12, 2011 order. (Order Pursuant to Sections 362(a) and 105(a) of the Bankruptcy Code Enforcing the Automatic Stay, Stay Orders, and SIPA and Granting Trustee's Application for an Injunction (the "Order") (Dkt. No. 1-1)). Before the Court is an appeal (Dkt. No. 1) by Maxam Limited from that Order. For the reasons stated below, the Order of the Bankruptcy Court is affirmed.

I. Background*fn2

On December 8, 2010, the Trustee filed a complaint (the "Complaint") against Appellant and several related funds, "seeking the avoidance of certain transfers, including the recovery of subsequent transfers to Maxam Limited." Sec. Investor Prot. Corp. v. Bernard L. Madoff Inv. Sec., LLC, 460 B.R. 106, 113 (Bankr. S.D.N.Y. 2011). The Complaint alleges that, between 2006 and 2008, nearly $100 million was transferred from BLMIS to Maxam Absolute Return Fund, L.P. ("Maxam Fund") in the form of withdrawals and that, during the ninety days prior to December 11, 2008 (the "Filing Date"), three transfers totaling approximately $25 million were made to Maxam Fund (the "Preference Period Transfers"). The Complaint further alleges that some or all of the Preference Period Transfers were subsequently transferred to Maxam Limited. The Trustee seeks return of these funds.

On July 11, 2011, Maxam Limited filed an answer to the Trustee's Complaint. On or about the same day, Maxam Limited filed an action in the Grand Court of the Cayman Islands (the "Cayman Action") seeking (1) a declaration that Maxam Limited is not liable to the Trustee for either (a) the $25 million Maxam Limited received from Maxam Fund within the period ninety days prior to the Filing Date or (b) any amounts received from Maxam Fund within the period two years prior to the Filing Date in excess of the $25 million; and (2) costs and any other relief deemed proper by the court. Maxam Limited represents that it was incorporated under the laws of the Cayman Islands and maintains its principal place of business there, though all of its assets are in the United States. (Declaration of Carrie A. Tendler dated December 19, 2011 (Dkt. Nos. 10-5, Ex. J at iv; 10-6, Ex. J at 1; 10-10, ¶ 4).)

The Trustee's Application to the Bankruptcy Court followed. On October 12, 2011, the Bankruptcy Court issued its Order, which deemed the Cayman Action and any relief derived from it void ab initio. The Order also, among other things, enjoined Maxam Limited and its agents from participating in the Cayman Action and from filing any further proceedings against the Trustee, the BLMIS estate, or the estate's assets "in any domestic or extraterritorial jurisdiction without first obtaining leave of [the Bankruptcy Court]." (Order at 3.) The Order further directed Maxam Limited to dismiss the Cayman Action as well as any other claims and requests for declaratory judgment or other relief against the Trustee or BLMIS in the Grand Court of the Cayman Islands.

The Bankruptcy Court explained its reasoning for the Order in a separate bench memorandum. See Sec. Investor Prot. Corp. v. Bernard L. Madoff Inv. Sec., LLC, 460 B.R. 106 (Bankr. S.D.N.Y. 2011). As stated therein, the injunctive portions of the Order were authorized by 11 U.S.C. § 105(a), which permits a bankruptcy court to "issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of [the Bankruptcy Code*fn3 ]." Id. at 120(quoting 11 U.S.C. § 105(a)) (modification altered). The Bankruptcy Court concluded that the Cayman Action violated (1) the automatic stay established in bankruptcy cases by 11 U.S.C. § 362(a) and applied in SIPA cases by SIPA § 78fff(b); (2) at least one stay order of this Court in connection with the ongoing SEC litigation related to this matter; (3) the Barton Doctrine established in Barton v. Barbour, 104 U.S. 126 (1881), which forbids a petitioning party from suing a court-appointed receiver without leave of court; and (4) sections of SIPA, including § 78eee(b)(2)(A)(i)-(ii), providing that the Bankruptcy Court has "exclusive jurisdiction of [BLMIS] and its property wherever located (including property located outside the territorial limits of [the Bankruptcy Court] . . . [and] of any suit against the trustee with respect to a liquidation proceeding . . . ." See 460 B.R. at 113-17.

Maxam Limited filed this appeal from the Order on November 29, 2011. (Dkt. No. 1.)

II. Discussion

In reviewing final decisions of bankruptcy courts, a district court acts as an appellate court. See In re Sanshoe Worldwide Corp., 993 F.2d 300, 305 (2d Cir. 1993). Findings of fact are reviewed for clear error. Fed. R. Bankr. P. 8013 ("Findings of fact . . . shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the bankruptcy court to judge the credibility of the witnesses."); accord In re Cody, Inc., 338 F.3d 89, 94 (2d Cir. 2003). Legal conclusions are reviewed de novo. See In re Adelphia Commc'ns Corp., 298 B.R. 49, 52 (S.D.N.Y. 2003) (citing In re United States Lines, Inc., 197 F.3d 631, 640-41 (2d Cir. 1999)).

A decision to grant or deny an injunction is reviewed for abuse of discretion. See Nevada Power Co. v. Calpine Corp. (In re Calpine Corp.), 365 B.R. 401, 407 (S.D.N.Y. 2007). The extension or denial of comity is also reviewed for abuse of discretion. See Finanz AG Zurich v. Banco Economico S.A., 192 F.3d 240, 246 (2d Cir. 1999).

Appellant Maxam Limited argues that the Bankruptcy Court's Order should be reversed because the automatic stay, the stay orders, the Barton Doctrine, the relevant sections of SIPA, and the Bankruptcy Court's injunctive power all lack extraterritorial effect. (Appellant's Br. (Dkt. No. 6).) Appellant also argues that the Order should be reversed in the interests of comity toward the courts of the Cayman Islands. (Id.) The Court concludes that the automatic stay and the Bankruptcy Court's injunctive power have extraterritorial effect, that the Cayman Action violates the automatic stay, and that the Bankruptcy Court was not restricted by interests of comity in this case. Accordingly, the Order must be affirmed.*fn4

A. Extraterritoriality of the Automatic Stay

Appellant argues that the Bankruptcy Court "erred in applying the automatic stay extraterritorially against MAXAM Limited" because the automatic stay lacks extraterritorial effect. (Id. at 21-22.) As discussed below, federal statutes, case law, and policy considerations all support the conclusion that the automatic stay does have extraterritorial reach. Appellant's arguments to the contrary, addressed below in a separate section, are unavailing.

1. Authority for the Automatic Stay and its Extraterritorial Reach

Under § 541(a) of the Bankruptcy Code, commencement of a bankruptcy action creates a worldwide estate of all of the legal or equitable interests, "wherever located," held by the debtor at the time of that commencement. See Nakash v. Zur (In re Nakash), 190 B.R. 763, 768 (Bankr. S.D.N.Y. 1996) ("[L]egislative history makes clear Congress' intent that 'wherever located' be broadly construed to include property located in and outside of the U.S.") (citation omitted)). In a case before a bankruptcy court, the bankruptcy court has in rem jurisdiction over all estate property, including claims and causes of action to recover estate property, regardless of the location of the property or claim. Jackson v. Novak (In re Jackson), 593 F.3d 171, 176 (2d Cir. 2010).

The Bankruptcy Code's automatic stay, "applicable to all entities," protects the debtor's property and the bankruptcy court's jurisdiction by barring "any act to obtain possession of property of the estate . . . or to exercise control over property of the estate." 11 U.S.C. § 362(a). "The purpose of the stay is to give the debtor a breathing spell from litigation and collection activities." In re Gold & Honey, Ltd., 410 B.R. 357, 369 (Bankr. E.D.N.Y. 2009). In other words, "[t]he stay exists to protect the estate from a chaotic and uncontrolled scramble for the Debtor's assets in a variety of uncoordinated proceedings in different courts." In re Nakash, 190 B.R. at 768 (internal quotation marks and citation omitted).

In Chapter 11 cases, the automatic stay must prohibit litigation to obtain possession or control of the estate's property "regardless of where such litigation is commenced." In re JSC BTA Bank, 434 B.R. 334, 345 (Bankr. S.D.N.Y. 2010). Thus, as numerous judicial opinions explain, "the automatic stay applies extraterritorially." In re McLean Industries, Inc., 74 B.R. 589, 601 (Bankr. S.D.N.Y. 1987).*fn5 In recognizing the extraterritorial reach of the automatic stay, Judge Posner, writing for the Seventh Circuit, has explained that "[t]he efficacy of the bankruptcy proceeding depends on the court's ability to control and marshal the assets of the debtor wherever located (see § 541(a)) . . . ." Underwood v. Hilliard (In re Rimsat, Ltd.), 98 F.3d 956, 961 (7th Cir. 1996).*fn6

It is important to note, however, that none of these cases stands for the notion that a United States court can exercise control over a foreign court. Rather, a bankruptcy court can enforce the automatic stay extraterritorially only against entities over which it has in personam jurisdiction.

[T]he extraterritorial jurisdiction of the United States courts for these purposes is in personam rather than in rem. If a creditor causes property of a title 11 estate to be seized in a foreign country, that creditor has violated the automatic stay. Whether that creditor can be punished, however, is a function of that creditor's amenability to United States process.

Sinatra v. Gucci (In re Gucci), 309 B.R. 679, 683-84 (S.D.N.Y. 2004) (quoting 1 King, et al., Collier on Bankruptcy 3.01[5], at 3-32 to 3-33 (15th ed. rev. 2003)); see also David P. Stromes, Note: The Extraterritorial Reach of the Bankruptcy Code's Automatic Stay: Theory v. Practice, 33 Brooklyn J. Int'l L. 277, 284 (2007) ("[I]f foreign creditors violate the automatic stay, U.S. bankruptcy courts cannot protect the debtor's assets unless the courts can exercise in personam jurisdiction over the violating entities.").

2. Appellant's Arguments Against Extraterritoriality of the Automatic Stay Maxam Limited argues that the automatic stay lacks extraterritorial effect because of the presumption established in E.E.O.C. v. Arabian-American Oil Co., 499 U.S. 244 (1991), that congressional statutes do not apply extraterritorially unless a contrary intent of Congress appears. That case requires courts to "look to see whether language in the relevant [a]ct gives any indication of a congressional purpose to extend its coverage beyond places over which the United States has sovereignty or has some measure of legislative control." E.E.O.C., 499 U.S. at 248 (internal quotation marks and brackets omitted). However, this "presumption is generally not applied where the failure to extend the scope of the statute to a foreign setting will result in adverse effects within the United States." H.K. & Shanghai Banking Corp. v. Simon (In re Simon), 153 F.3d 991, 995 (9th Cir. 1998) (quoting Environmental Defense Fund, Inc. v. Massey, 986 F.2d 528, 531 (D.C. Cir. 1993)). The presumption against extraterritoriality is also "not applicable when the regulated conduct is 'intended to, and results in, substantial effects within the United States.'" Id. (quoting Laker Airways, Ltd. v. Sabena Belgian World Airlines, 731 F.2d 909, 925 (D.C. Cir. 1982)).

In the bankruptcy context, Congress has expressed its intent that bankruptcy courts (by delegation from district courts) are to have jurisdiction over a debtor's estate of "property, wherever located and by whomever held." 11 U.S.C. § 541(a) (emphasis added); 28 U.S.C. § 1334(e); 28 U.S.C. § 157(a); 28 U.S.C. § 151. Because the automatic stay is key to protecting a bankruptcy court's jurisdiction, the language Congress used in § 541(a) is, as the Seventh Circuit has noted, evidence of congressional intent that the automatic stay would apply extraterritorially. In re Rimsat, 98 F.3d at 961.

Maxam Limited also points to AW Treuhand Wirtschaftsprufungsgesellschaft v. Peregrine Sys. (In re Peregrine Sys.), No. 04-1325, 2005 U.S. Dist. LEXIS 21707 (D. Del. Sept. 29, 2005), in which the District Court in Delaware reversed a bankruptcy court's extraterritorial application of the automatic stay. In that case, several debtors (collectively, "Peregrine") filed a Chapter 11 petition in Delaware and, the following day, filed a complaint in the Superior Court of the State of California, asserting claims for professional malpractice, fraud, and breach of contract against Arthur Andersen LLP, Arthur Andersen Worldwide S.C., Daniel Stulac, and Arthur Andersen Wirtschaftsprufungsgesellschaft Steuerberatungsgesellschaft mbH ("AAWS"). Approximately three months after the Chapter 11 filing, AAWS filed suit against Peregrine in a German court, seeking a declaration of non-liability. Three months after that, AAWS (while preserving its jurisdictional defenses) brought a motion in the bankruptcy court for a determination that the automatic stay established by 11 U.S.C. § 362(a) did not apply to the German action.

On appeal, the District Court for the District of Delaware held that the automatic stay found in 11 U.S.C. § 362(a)(1) did not apply to AAWS's German action because that section applies only to "a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the [bankruptcy case], or to recover a claim against the debtor that arose before the [bankruptcy case]." 11 U.S.C. § 362(a)(1); Peregrine, 2005 U.S. Dist. LEXIS 21707, at *8-11. The district court in Peregrine held that AAWS's German action presented no "claims" as defined by 11 U.S.C. § 101(5)(A) (a "right to payment . . .") but only defenses to the post-petition California action-defenses which could not have been filed pre-petition. Peregrine, 2005 U.S. Dist. LEXIS 21707, at *8-11. The Peregrine court did not hold that the automatic stay lacks extraterritorial effect*fn7 ; it held merely that the facts of that case did not fall within the ambit of § 362(a)(1). Nor did Peregrine discuss § 362(a)(3), presumably because that section applies to "act[s] to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate," 11 U.S.C. § 362(a)(3), and no such acts were found in Peregrine.

In contrast, this case is about 11 U.S.C. § 362(a)(3) because, here, the question is whether Maxam Limited has performed an "act to . . . exercise control over property of the estate."

Because Peregrine did not concern that section, Peregrine does not inform the resolution of this case.*fn8

Rather, this Court follows the many other courts discussed above that have addressed the extraterritoriality of the automatic stay, concluding that it protects a bankruptcy court's in rem jurisdiction extraterritorially by way of in personam jurisdiction over those who would take actions prohibited by the stay. Here, Maxam Limited's Cayman Action seeks a declaratory judgment concerning the merits of the Trustee's claim (which is, itself, property of the BLMIS estate) to funds transferred during the preference period as well as costs. The Cayman Action constitutes an act by Maxam Limited "to exercise control over property of the estate" in violation of 11 U.S.C. § 362(a)(3).

The Trustee correctly notes that Maxam Limited "does not dispute that, had its lawsuit been filed in the United States, it would have violated the automatic stay." (Appellee's Br. (Dkt. No. 12) at 2.) Maxam Limited's argument that the automatic stay does not bar the Cayman Action depends entirely on the asserted lack of extraterritorial effect of the automatic stay. Because the automatic stay does apply extraterritorially, Maxam Limited violated the automatic stay by filing the Cayman Action.

B. Extraterritoriality of the Bankruptcy Court's Injunctive Power

Under 11 U.S.C. § 105(a), a bankruptcy court "may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of [the Bankruptcy Code]." Maxam Limited argues that the Bankruptcy Court's Order should be reversed because this injunctive authority does not empower the Bankruptcy Court to issue an order with extraterritorial effect. (Appellant's Br. at 17-18.)

Appellant essentially rehashes its argument discussed above that the presumption against extraterritoriality should control, noting that 11 U.S.C. § 105(a), like the automatic stay, does not explicitly establish its extraterritorial effect vis-a-vis a non-debtor. (Appellant's Br. at 17-18.)

In fact, bankruptcy courts have previously utilized § 105(a) to enjoin extraterritorial violations of the automatic stay. See, e.g., In re Lykes Bros. S.S. Co., 191 B.R. 935, 936 (Bankr. M.D. Fla. 1995) (enjoining "all creditors which are subject to the personal jurisdiction of this Court, whether citizens of the United States or foreign entities . . ." from transferring claims to other foreign entities not subject to the personal jurisdiction of the bankruptcy court); cf. In re Lykes Bros. S.S. Co. v. Hanseatic Marine Serv., 207 B.R. 282, 288 (Bankr. M.D. Fla. 1997) (enjoining foreign defendants from bringing foreign action under Federal Rule of Civil Procedure 65, which also includes no explicit grant of extraterritorial authority).

As discussed above, Congress expressed its intent in statute that bankruptcy courts are to have jurisdiction over a bankruptcy estate's "property, wherever located and by whomever held."

11 U.S.C. § 541(a) (emphasis added); 28 U.S.C. § 1334(e); 28 U.S.C. § 157(a); 28 U.S.C. § 151; see also In re Rimsat, 98 F.3d at 961 ("The efficacy of the bankruptcy proceeding depends on the court's ability to control and marshal the assets of the debtor wherever located (see § 541(a)) . . . ."). Just as this congressional intent expressed in federal statute establishes the extraterritoriality of the automatic stay, the same congressional intent establishes the extraterritoriality of the Bankruptcy Court's injunctive power to enforce the Bankruptcy Code under § 105(a).

Appellant adds that § 105(a) "does not authorize the bankruptcy courts to create substantive rights that are otherwise unavailable under applicable law." (Appellant's Br. at 17 (quoting Solow v. Kalikow (In re Kalikow), 602 F.3d 82, 96 (2d Cir. 2010)).) This maxim is irrelevant here because the Bankruptcy Court created no substantive right for anyone in this case, and Appellant makes no argument to the contrary. Rather, as the Bankruptcy Court correctly noted, "bankruptcy courts are empowered to utilize their equitable powers under section 105 where appropriate 'to facilitate the implementation of other Bankruptcy Code provisions.'" 460 B.R. at 120 (quoting In re Kalikow, 602 F.3d at 97); see also Johns-Manville Corp. v. Colorado Ins. Guar. Corp. (In re Johns-Manville Corp.), 91 B.R. 225, 228 (Bankr. S.D.N.Y. 1988) (holding that a bankruptcy judge may, under § 105, "enjoin proceedings in other courts when it is satisfied that such a proceeding would defeat or impair its jurisdiction with respect to a case before it." (citation omitted)).

Accordingly, the Bankruptcy Court had the power to issue the injunctive portions of its Order.

C. Interests of Comity

Appellant Maxam Limited focuses much of its argument for the Order's reversal on the interests of comity. The Supreme Court has explained the contours of comity in the United States as follows:

'Comity,' in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to the international duty and convenience, and to the rights of its own citizens, or of other persons who are under the protection of its laws.

Hilton v. Guyot, 159 U.S. 113, 163-64 (1895).

In China Trade & Development Corp. v. M.V. Choong Yong, 837 F.2d 33 (2d. Cir. 1987), the Second Circuit adopted a multi-factor test to determine whether a district court's injunction against a foreign suit properly accorded with interests of international comity. The court there adopted "two threshold requirements for such an injunction: (1) the parties must be the same in both matters, and (2) resolution of the case before the enjoining court must be dispositive of the action to be enjoined." China Trade, 837 F.2d at 35-36.

When these threshold requirements are met, five factors are suggested in determining whether the foregoing action should be enjoined: (1) frustration of a policy in the enjoining forum; (2) the foreign action would be vexatious; (3) a threat to the issuing court's in rem or quasi in rem jurisdiction; (4) the proceedings in the other forum prejudice other equitable considerations; or (5) adjudication of the same issues in separate actions would result in delay, inconvenience, expense, inconsistency, or a race to judgment.

Id. (citation omitted). Applying these factors, the China Trade court held that the district court there had erred in enjoining a (non-bankruptcy) lawsuit in Korea because the foreign suit did not implicate the most important of the relevant factors: threats to an American court's jurisdiction and to important American public policies. Id. at 36-37.

The Bankruptcy Court here considered the comity arguments based on China Trade and determined that, given that the foreign proceeding in China Trade did not violate any law of the United States or interfere with the exclusive jurisdiction of a U.S. court, this Court finds the comity-based China Trade factors inapplicable to the instant proceeding. Maxam Limited cannot use notions of international comity to undermine this Court's exclusive jurisdiction and interfere with the administration of the estate. 460 B.R. at 122 (citing In re Rimsat, 98 F.3d at 963 ("Comity is a doctrine of adjustment, not a mandate for inaction.")).

In this appeal, Maxam Limited argues that China Trade should control in light of the Third Circuit's holding in Stonington Partners v. Lernout & Hauspie Speech Prods. N.V., 310 F.3d 118 (3d Cir. 2002), which reversed, on grounds of comity, a bankruptcy court's injunction against a parallel proceeding in Belgium. However, in Stonington, the Third Circuit stressed the importance of the fact that, there, the debtor had initiated parallel bankruptcy proceedings in the United States and Belgium, making the proceedings "parallel in the normal sense of the term."

Id. at 128 & n.8. The actions here are not "parallel in the normal sense of the term" because only one of them is a bankruptcy proceeding brought by the Trustee; the other is a declaratory action brought by the Appellant creditor in a different forum.

The Trustee here correctly notes further that the claims at issue in Stonington (both in the United States and Belgium) were claims of a creditor and were therefore not "property of the debtor's estate" under § 541(a) and the automatic stay. (Appellee's Br. at 27.) Since the Trustee's action below presented claims of the BLMIS estate while the Cayman Action, concerning claims of the estate, was brought by a creditor in a foreign forum where the BLMIS had not filed a parallel proceeding, Stonington appears inapposite.

Moreover, the Bankruptcy Court held that, "[e]ven assuming every injunction affecting a foreign proceeding must meet the China Trade factors, enjoining Maxam Limited from continuing the Cayman Action is warranted thereunder." 460 B.R. at 122. The court below held that the two threshold "factors are obviously satisfied here; both suits involve the Trustee and Maxam Limited, and resolution of the Trustee's action in this Court is dispositive of the Cayman Action which seeks a determination of non-liability in the Trustee's action." Id.

With regard to the additional China Trade factors, the Bankruptcy Court then cited (a) the Cayman Action's threat "to erode the strong public policies underlying SIPA, namely, protecting investors and their faith in the securities market by expeditiously returning customer funds to investors"; (b) the vexatiousness of the Cayman Action in threatening to require double litigation of any issues raised therein; (c) the Cayman Action's threat to the Bankruptcy Court's exclusive in rem jurisdiction over the worldwide estate of BLMIS assets; and (d) the "delay, inconvenience, expense, and inconsistency" threatened by the Cayman Action. Id. at 122-23.

The Bankruptcy Court's application of the China Trade factors, reviewed de novo, is sound. It is worth emphasizing that "SIPA serves dual purposes: to protect investors, and to protect the securities market as a whole." In re Bernard L. Madoff Inv. Sec. LLC, 654 F.3d 229, 235 (2d Cir. 2011). Allowing the Cayman Action to proceed would indeed raise doubts about the reliability of America's judiciary in responding to bankruptcies in the American securities markets. And the Cayman Action would indeed vexatiously require the Trustee to relitigate claims raised in the adversary proceeding below. As discussed above vis-a-vis the automatic stay, the Cayman Action does threaten the Bankruptcy Court's exclusive in rem jurisdiction over the worldwide estate of BLMIS assets. The Cayman Action certainly threatens inconsistency with the adversary proceeding-indeed, it is difficult to imagine why Maxam Limited would have brought the Cayman Action except to seek a more favorable result than it could secure in the Bankruptcy Court. Finally, the Cayman Action would cause extra inconvenience and expense for the Trustee in double litigation, whether or not it also causes delay for the Bankruptcy Court.*fn9

The Bankruptcy Court exhibited appropriate restraint in not deciding whether China Trade controls this case since the injunction at issue would be appropriate whether China Trade is applicable or not. This Court does likewise.

III. Conclusion

As stated above, the Order sub judice represents an appropriate use of the Bankruptcy Court's injunctive authority under § 105(a) because the Cayman Action violated the automatic stay and because the Second Circuit's holding in China Trade does not constrain the Bankruptcy Court from exercising its authority here. As such, it is not necessary for the Court to give additional consideration to Appellant's arguments concerning the extraterritorial effect of the stay orders, the Barton Doctrine, and SIPA.

Accordingly, the October 12, 2011 Order of the Bankruptcy Court is AFFIRMED.


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