Perpetual Trustee Company Ltd v BNY Corporate Trustee Services Ltd & Anor

Perpetual Trustee Company Ltd v BNY Corporate Trustee Services Ltd & Anor

The court held that while there are real concerns about the scope of relief sought in the US proceedings, it would be inappropriate to send a letter in the detailed terms proposed by Perpetual. However, a more limited letter, as suggested by BNY and clarified by the court, should be sent to Judge Peck. This letter should record the circumstances, clarify that only declaratory relief is sought in the US at this stage, and respectfully invite the US court not to make any order requiring BNY to act with the collateral until further communication between the courts.

Parties
Claimant: Perpetual Trustee Company Limited; First Defendant: BNY Corporate Trustee Services Limited; Second Defendant: Lehman Brothers Special Financing Inc (LBSF)
Jurisdiction
England and Wales
Judgment Date
17 November 2009
Procedural Posture
Chancery Division Application / Application for Letter of Request to US Bankruptcy Court
Outcome
Application granted in part
Legal Topics
Cross Border Insolvency, Judicial Comity, Anti Deprivation Principle, Ipso Facto Rule, Declaratory Relief, Priority of Claims
Insolvency Conflict of Laws Trusts Cross Border Insolvency Judicial Comity Anti Deprivation Principle Ipso Facto Rule Declaratory Relief +1 more

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Parties

Perpetual Trustee Company Limited

Claimant

BNY Corporate Trustee Services Limited

First Defendant

Lehman Brothers Special Financing Inc (LBSF)

Second Defendant

Procedural Posture

Chancery Division Application / Application for Letter of Request to US Bankruptcy Court

Legal Issues

  1. 1 Whether the English court should send a letter of request to the US Bankruptcy Court regarding proceedings affecting the distribution of collateral held by BNY
  2. 2 Whether the relief sought in the US proceedings risks conflicting with English court orders and the principle of comity

Ratio Decidendi

The court held that while there are real concerns about the scope of relief sought in the US proceedings, it would be inappropriate to send a letter in the detailed terms proposed by Perpetual. However, a more limited letter, as suggested by BNY and clarified by the court, should be sent to Judge Peck. This letter should record the circumstances, clarify that only declaratory relief is sought in the US at this stage, and respectfully invite the US court not to make any order requiring BNY to act with the collateral until further communication between the courts.

Court Disposition

Application granted in part

Orders

  • A limited letter of request, as outlined by the court, to be sent to Judge Peck of the US Bankruptcy Court before the New York hearing.