Trikona Advisers Ltd. v. Chugh

Chapter 15 isn’t the exclusive means for enforcing foreign bankruptcy court judgments.

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Case Type:
Case Status:
14-975-cv (2nd Circuit, Jan 18,2017) Published
Cayman court ruling was entitled to preclusive effect in litigation pending in Connecticut district court, rejecting appellant's 5 arguments. 1.Chapter 15 of the Bankruptcy Code did not preclude court from applying collateral estoppel to findings of fact in Cayman Court. 2.The finding of fact at issue was "essential" to the Cayman judgment. 3.Fact that Cayman proceeding was in rem and district court proceeding was in personam did not matter for preclusion purposes. 4.The relevant parties were in privity with each other. 5.The Cayman court judgment was entitled to comity in the district court.
Procedural context:
Appeal by plaintiff from decision of the district court for the District of Connecticut granting summary judgment in favor of defendants on the basis of the preclusive effect of a decision by the Grand Court of the Cayman Islands.
Trikona Advisors, ltd. ("TAL"), a Cayman Islands investment advisory company, was owned 50-50 by entities controlled by each of Rakshitt Chugh and Aashish Kalra. The business experienced various problems, and Chugh and Kalra had a falling out. Chugh's entities filed a petition in the Grand Court of the Cayman Islands to "wind up" TAL and divide its assets between the owners. Kalra's entities opposed the petition, asserting among other things as an affirmative defense to the petition that Chugh had breached his fiduciary duties to TAL. After a trial, the Cayman court granted the petition. Separately, one of Kalra's entities sued Chugh and others in district court in Connecticut for breaches of fiduciary duties, among other things. After the decision in the Cayman proceedings, the Chugh parties moved for summary judgment in the district court action on the basis of collateral estoppel. The district court granted the motion and denied a motion for reconsideration on the basis of the preclusive effect of the Cayman decision.
Walker, Chin, and Lohier, Circuit Judges

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