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    Arguments On Behalf of ALSL: The AA in India For The Recognition of Foreign Proceedings

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    ritvik
    The document makes arguments on behalf of ALSL regarding a USD 100 million loan to its parent company, ACL. It states that an interim trustee filed for recognition of foreign bankruptcy proceedings in an Indian court and requested relief regarding the loan. It argues that ACL is liable for the loan amount as the money was provided to ACL by ALSL from funds ALSL received in a loan from a bank consortium. Precedent from various courts is cited showing that a parent can be held responsible for transactions involving its subsidiary if the parent was sufficiently involved in the decision making. Therefore, cooperation is being sought from ACL regarding the USD 100 million loan.

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    Arguments On Behalf of ALSL: The AA in India For The Recognition of Foreign Proceedings

    Uploaded by

    ritvik
    31 views2 pages
    The document makes arguments on behalf of ALSL regarding a USD 100 million loan to its parent company, ACL. It states that an interim trustee filed for recognition of foreign bankruptcy proceedings in an Indian court and requested relief regarding the loan. It argues that ACL is liable for the loan amount as the money was provided to ACL by ALSL from funds ALSL received in a loan from a bank consortium. Precedent from various courts is cited showing that a parent can be held responsible for transactions involving its subsidiary if the parent was sufficiently involved in the decision making. Therefore, cooperation is being sought from ACL regarding the USD 100 million loan.

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    ALSL

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    The document makes arguments on behalf of ALSL regarding a USD 100 million loan to its parent company, ACL. It states that an interim trustee filed for recognition of foreign bankruptcy proceedings in an Indian court and requested relief regarding the loan. It argues that ACL is liable for the loan amount as the money was provided to ACL by ALSL from funds ALSL received in a loan from a bank consortium. Precedent from various courts is cited showing that a parent can be held responsible for transactions involving its subsidiary if the parent was sufficiently involved in the decision making. Therefore, cooperation is being sought from ACL regarding the USD 100 million loan.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    31 views2 pages

    Arguments On Behalf of ALSL: The AA in India For The Recognition of Foreign Proceedings

    Uploaded by

    ritvik
    The document makes arguments on behalf of ALSL regarding a USD 100 million loan to its parent company, ACL. It states that an interim trustee filed for recognition of foreign bankruptcy proceedings in an Indian court and requested relief regarding the loan. It argues that ACL is liable for the loan amount as the money was provided to ACL by ALSL from funds ALSL received in a loan from a bank consortium. Precedent from various courts is cited showing that a parent can be held responsible for transactions involving its subsidiary if the parent was sufficiently involved in the decision making. Therefore, cooperation is being sought from ACL regarding the USD 100 million loan.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Arguments on behalf of ALSL

    It is respectfully submitted that the instant case presents a situation where the subsidiary
    company seeks cooperation with regards to the amount of USD 100 million loaned to its
    holding company. The amount loaned is claimed to have been paid out of the amount loaned
    by Citi Fin and consortium lenders to ALSL.

     Application made by Kelvin Murray( interim trustee) as a foreign representative to


    the AA in India for the recognition of foreign proceedings

    On initiation of the involuntary bankruptcy proceedings under chapter 1 1of US Bankruptcy


    court U/S 303 of the same, an application was made by Mr Kelvin Murray (interim trustee) as
    a foreign representative to the adjudicating authority for recognition of foreign proceeding with
    reference to Article 15 of UNCITRAL seeking cooperation in regards to the amount of USD
    100 million loaned by ALSL to ACL. Model law, allows foreign representatives and creditors
    ‘direct access ‘to the domestic courts and confers on them ability to participate in domestic
    insolvency proceedings1 with an important objective of expediting cumbersome insolvency
    procedures in freeing them from having to meet formal requirements. Further upon recognition
    of the foreign proceedings interim trustee requests the adjudicating authority to grant any
    appropriate relief under Article 21(1)(g) along with Article 22 providing useful elements to
    guide the courts exercising power under Article 19 and 21 of the same .

     ACL is liable to hold liability for the amount loaned by ALSL paid out of the amount
    loaned by consortium led by Citi Fin Bank

    Courts across jurisdictions have recognized that one corporation may become an actor in a
    given transaction, or in part of a business, or in a whole business, and, when it has, will be
    legally responsible.2 Thus, the “directness” of a holding company’s involvement in the
    transaction in question may be conceived as a sliding scale; if the company has sufficiently
    overwhelmed its subsidiary in taking a certain step or action, such a showing is sufficient to
    create liability.3 The court is required to discern which entity- the parent or the subsidiary- was
    the final decision-maker for the transaction in question.4 Courts will not permit themselves to
    be blinded or deceived by mere forms of law, but regardless of fictions, will deal with the
    substance of the transaction involved as if the corporate agency did not exist and as the justice
    of the case may require.5

    Similarly in the present case, out of the total amount loaned by ALSL from the consortium
    USD 100 million was loaned to ACL indicating to the direct play of ACL in the transaction

    1
    Article 9 of UNCITRAL Model Law on Cross-Border Insolvency, Bar Council of India .v. A K Balaji &
    ors.Civil Appeal nos.7875-7879 of 2005 with civil appeal nos. 7170 of 2005
    2
    8 Esmark Inc. v. National Labor Relations Board, 887 F.2d 739
    3
    Pearson v. Component Technology Corp., 247 F.3d 471; Transamerica Leasing v. La Rep. De Venezuela, 200
    F.3d 843.
    4
    Id.
    5
    Chicago, Milwaukee & St. Paul Railway Company v. Minneapolis Civic & Commerce Association, 247 U.S.
    490 (1918).
    that took place between ALSL and the consortium which needs to be countered with the
    participation in holding the liability.

    Therefore, ALSL seeks cooperation from ACL in relation to the amount of USD 100 million
    loaned.

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