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Luxembourg Firm Seeks Creditor Protection in US

Wednesday, 27 June 2012 19:45
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Liquidators of Luxembourg based SLS Capital S.A. filed in Manhattan, New York a petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 12-12707) to seek recognition of proceedings in Luxembourg as "foreign main proceeding".
Maitre Yann Baden, the liquidator and foreign representative, estimated SLS Capital to have assets and debts of $100 million to $500 million.
SLS was a financial services company whose primary business was the issuance of bonds to persons residing outside the United States.  In the operation of its business SLS had counterparties and advisors in the United States and had significant assets held in custodial asset and cash accounts in New York City. The assets held in the United States were the primary collateral for the bonds that SLS issued.
On June 4, 2009, the State Prosecutor in Luxembourg filed an application in the District Court of and in Luxembourg (Case Number L-6258/09), to wind up and order the liquidation of SLS, a Luxembourg joint stock company, pursuant to Article 203 of the law of 10 August 1915 of Luxembourg, as subsequently amended.
On Oct. 1, 2009, the Luxembourg Court ordered the dissolution of SLS and placed SLS into liquidation "declar[ing] applicable those legal provisions pertaining to the liquidation of a bankruptcy" and "appoint[ing] as magistrate in bankruptcy [Supervising Judge] Mrs. Carole BESCH, judge with the Luxembourg Court, and designat[ing] as liquidator Maitre Yann BADEN, lawyer residing in Luxembourg. . . ."
The liquidator says that there is need for U.S. recognition of the Luxembourg proceeding.  As part of the process of marshaling SLS's assets and paying SLS's debts, the SLS Liquidator seeks to investigate the disappearance of SLS's assets including assets held in custodial accounts and to pursue such actions as are appropriate in order to recover SLS's assets and/or seek damages from culpable third parties.
Liquidators of Luxembourg-based SLS Capital S.A. filed in Manhattan, New York a petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 12-12707) to seek recognition of proceedings in Luxembourg as "foreign main proceeding".

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