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Arthur A. Zorio, Nevada Bar No. 6547
azorio@bhfs.com
BROWNSTEIN HYATT FARBER SCHRECK, LLP
Telephone: 775.398.3812
Facsimile: 775.333.8171
Steven
E. Abelman,
(pro hac vice admission pending)
sabelman@bhfs.com
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410
Telephone: 303.223.1100
Facsimile: 303.223.1111
UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEVADA
IN RE GHOLAM REZA JAZI ZANDIAN,
Debtor in Foreign Proceeding.
CASE NO.: BK-N-16-50644-BTB
CHAPTER 15
OBJECTION TO PETITION FOR RECOGNITION AND CHAPTER 15 RELIEF
Jed Margolin, by and through his attorneys Brownstein Hyatt Farber Schreck, hereby files the following objection to the Verified Petition for Recognition of Chapter 15 Relief (“Petition”). As grounds, Mr. Margolin asserts as follows:
I . INTRODUCTION
Jed Margolin is a judgment creditor of Gholam Reza Zandian (“Zandian”) pursuant to a judgment entered on June 24, 2013, by the First Judicial Court of the State of Nevada in Case No. 090C005791B. A copy of Mr. Margolin’s judgment is attached hereto as Exhibit A.
The petitioner Patrick Canet (the “Petitioner”) is also a judgment creditor of Zandian, based upon a judgment obtained in a French court 18 years ago. The purpose of Chapter 15 is to
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encourage
cooperation between the
The Petition is devoid of any
evidence that there is a pending insolvency case for Zandian
in
II. ARGUMENT
A. The Petition is Inconsistent With the Purposes of Chapter 15.
The purpose of Chapter 15 of the Bankruptcy Code is set forth in 11 USC § 1501(a). The Petition seeks relief incongruent with the stated purposes of Chapter 15 because Zandian is not subject to a cross-border insolvency. In particular, section 1501[1] states in part:
__________________
[1] Unless otherwise indicated, all section references herein are to the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq.
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(a)The purpose of this chapter is to incorporate the Model Law on crossborder insolvency so as to provide effective mechanisms for dealing with cases of cross-border insolvency with the objectives of –
(1) cooperation between –
(A) courts of the United States, United States trustees, trustees, examiners, debtors and debtors in possession; and
(B) the courts and others competent authorities of foreign countries involved in cross-border insolvency cases; . . . . 11 U.S.C. § 1501(a) (emphasis added).
Case law confirms that the purpose of Chapter 15 is to “facilitate[e] administration of an insolvency case in a foreign jurisdiction.” In re Kemsley, 489 B.R. 346, 359 (Bankr. S.D.N.Y. 2013). “Chapter 15 was implemented by Congress in an attempt to harmonize transnational insolvency proceedings.” In re Ran, 607 F.3d 1017, 1025 (5th Cir. 2010).
The Petition does not contain documentation supporting the existence of a cross-border insolvency case in which Zandian is a debtor within the meaning of section 1502(1). The only debtor in the cross-border case contained in the Petition is Computer World. Rather than facilitating any foreign insolvency proceeding involving Zandian, the express objective of the Petition is to collect upon a judgment obtained by a “judicial liquidator” of Computer World against Zandian. This is not a proper purpose for a Chapter 15 case.
B. The Petition Does Not Satisfy the Requirements of Section 1515.
Attached to the Verified Petition is a single document in French and translated to English. The document is titled “Judgment of 3 April 1998.” On the caption, the Plaintiff is denominated “Canet, Judicial Liquidator of Computer World.” The Defendant is Zandian. Since the Petitioner’s capacity is as the “Judicial Liquidator of Computer World,” the insolvency case is, by the very terms of the judgment, one involving Computer World, not Zandian. To the extent Computer World had assets in the United States, Chapter 15 would be applicable such that relief could be granted under Section 1511 to ensure cooperation between the Courts of France and the
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The judgment recites in pertinent part:
Following the adjournments, the matter was argued
at the hearing of 6 March 1998, during which Mr. Canet,
Esq., in his official capacity, appearing through Mr. Gayraud,
Esq., developed the terms of his document instituting proceedings. He recalls
that by judgment rendered by this
On 11 June 1993, this reorganization had been converted into judicial liquidation and Mr. Canet, Esq., appointed to the duties of liquidator and representative of the creditors.
He states that in connection with his duties, he summoned Mr. Zandian, Chairman and General Manager and 48% shareholder, for the purposes of having a pecuniary sanction ordered against him derived from Article 180 of the Law of 25 January 1985.
Indeed, Mr. Zandian was guilty of a certain number of acts justifying that a sanction be ordered against him for repayment of the company’s liabilities out of his own assets. [comblement de passif]
Following a judgment rendered by the 6th Chamber of this Court on 13 June 1997, Mr. Canet, Esq.’s claim was allowed. Mr. Zandian was ordered to personally assume the debts of the company up to the amount of $20,000,000 francs. …
ON THESE GROUNDS: … Appoints Mr. Canet, Esq., 1 Rue De La Citadelle 93500 Pontoise, as liquidator.
Grants the creditors a time limit of 2 months as from publication of this judgment in the BODACC [official bulletin of civil and commercial notices] to file their proofs of claim.
Declares that the time limit granted to the judicial liquidator for drawing up the list of creditors is 10 months as from expiry of the above time limit set for proofs of claims.
Requests the employees to appoint a representative from within the company under the conditions provided by Article 148-1 of the Law.
Declares that the report of appointment or failure to do so shall be filed forthwith with the Clerk’s office in accordance with Article 15, 2nd paragraph of the Decree of 27 December 1985, as amended...
The Petition is devoid of any evidence that there is an ongoing insolvency or liquidation proceeding against Zandian. Even presuming that the documents attached to the Petition are authentic, they are all at least 18 years old. Therefore, even if they were valid in 1998, one cannot
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assume they are currently valid. There is no case number of a pending liquidation or insolvency case against Zandian. There is no docket sheet or pleading reflecting activity during the past 18 years. It is questionable whether the Judgment of 3 April 1998 is even viable, as there is no certification indicating that this 18-year-old judgment is still valid. It requires a leap of faith to accept that the person purporting to be Mr. Canet actually is Mr. Canet and that he is still authorized to act as liquidator.
C. Zandian’s Suspicious Activities.
The facts and circumstances surrounding Zandian’s illicit activities, as well as the glaring omissions in the materials provided herein, should cause this Court to be extremely suspicious about this Chapter 15. Various courts have determined Zandian engaged in bad faith litigation and linked him to “forged” patent assignments. Most recently, Zandian attempted to bribe counsel for Jed Margolin. As a result, there is an insufficient basis to trust that Mr. Canet is actually bringing this action or that the Computer World insolvency proceeding is still an active case.
In 1993, US Federal Agents
arrested Zandian for attempting to illegally export
one of IBM’s most powerful computers to
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It is highly suspicious that
after 18 years, someone purporting to be a liquidator for a company long since
closed attempts to intervene in
Again, there is no evidence
provided that the Judgment of 3 April 1998 is even viable after 18 years. The
Petitioner would have this Court believe that a “judicial liquidator” for
Computer World would lay dormant for 18 years only to be miraculously revived
in the heels of a
viable, it would have had to have been transformed by a Court to a currency presently in existence. It is noteworthy that the materials appended to the Petition contain only those documents which could have been pirated from the 18 year old case.
D. The Petition Fails to Meet the Requirements of Bankruptcy Rule 1007(a)(4).
In addition to being substantively flawed and highly suspicious, the Petition is also procedurally deficient. Bankruptcy Rule 1007(a)(4) requires that the following documents be filed with the petition, unless the Court orders otherwise: “a list containing the names and addresses of all persons or bodies authorized to administer foreign proceedings of the debtor, all parties to litigation pending in the United States in which the debtor is a party at the time of the filing of the petition, and all entities against whom provisional relief is being sought under § of the Code.” Fed. R. Bankr. P. 1007(a)(4). The purpose of these requirements is to ensure that entities with an interest in the case receive appropriate notice. See COLLIER ON BANKRUPTCY ¶ 1007.02[4] (Alan N. Resnick & Henry J. Sommer eds., 16th ed.).
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Here, the foreign representative did not file the materials required under Rule 1007.
Attached to the petition are photocopies of the attorney license cards of Mr. Canet and his French attorney, Jean-Marie Hyest. There is no representation, however, that Messrs. Canet and Hyest constitute “all persons or bodies authorized to administer foreign proceedings of the debtor.”
More importantly, the foreign representative failed to list parties to U.S.-based litigation and parties against whom provisional relief is sought. The Court thus had no means of notifying such parties of the petition pursuant to Bankruptcy Rule 2002(q). Given the distinct possibility that key parties in interest did not receive notice of the Petition, the Court should not recognize the foreign proceeding.
E. Order Granting Recognition Should Not Enter.
For the same reasons set forth
above, the Petition fails to meet the criteria established for an order
granting recognition under 11 U.S.C. §1517. For instance, the Petition does not
establish that there is a foreign main proceeding as defined in 11 U.S.C.
§1502(4) because there are no allegations that
F. Reservation of Rights.
To the extent the Petitioner can prove he is still authorized under French law to pursue the Judgment of 3 April 1998, Jed Margolin does not object to granting Petitioner access to Court under 11 U.S.C. §1509(b) to sue or be sued. In addition, Jed Margolin reserves his right to raise any other objections under Chapter 15 at the hearing scheduled for 10:00 a.m. on June 23, 2016.
WHEREFORE,
Mr. Margolin respectfully requests that this Court
enter an order denying the Petition for Recognition.
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DATED this 16th day of June, 2016
BROWNSTEIN HYATT FARBER
SCHRECK, LLP
By: /s/ Arthur A. Zorio
Arthur A. Zorio
Nevada Bar No. 6547
By: /s/ Steven E. Abelman
Steven E. Abelman
(pro hac vice admission pending)
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CERTIFICATE OF SERVICE
I hereby certify that on this 16th day of June, 2016, the foregoing OBJECTION TO PETITION FOR RECOGNITION AND CHAPTER 15 RELIEF was electronically filed with the Court using the CM/ECF system, which sent notification to all parties in interest participating in the CM/ECF system and was served by placing same via first class mail postage prepaid properly addressed to all parties identified on the attached mailing matrix.
/s/ Sheila M. Grisham
Sheila M. Grisham
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Label Matrix for local noticing
0978-3
District of Nevada
Thu Jun 16 09:19:42 PDT 2016
1
KAEMPFER CROWELL
2
3
(p) INTERNAL REVENUE SERVICE
CENTRALIZED INSOLVENCY OPERATIONS
4
INTERNAL REVENUE SERVICE
5
Louis M. Bubala III
KAEMPFER CROWELL
6
MATTHEW D. FRANCIS, ESQ.
ADAM P. MCMILLEN, ESQ.
BROWNSTEIN HYATT FARBER SCHRECK
7
NEVADA DEPARTMENT OF MOTOR VEHICLES
BANKRUPTCY SECTION
8
9
BANKRUPTCY SECTION
10
SEVERIN A. CARLSON, ESQ.
TARA C. ZIMMERMAN, ESQ.
KAEMPFER CROWELL
510
11
UNITED STATES TRUSTEE
12
JEFFREY L HARTMAN
HARTMAN & HARTMAN
The preferred mailing address (p) above has been substituted for the following entity/entities as so specified by said entity/entities in a Notice of Address filed pursuant to 11 U.S.C. 342(f) and Fed.R.Bank.P. 2002 (g)(4).
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
The following recipients may be/have been bypassed for notice due to an undeliverable (u) or duplicate (d) address.
13
(u)PATRICK CANET
1 RUE DE LA CITADELLE
Mailable recipients 12
95300 PONTOISE Bypassed recipients 1
00000
Total 13