Andrew Lawrence Hosking and Bruce Mackay, in their v. TPG CAPITALMANAGEMENT, L.P., f/k/a TPG CAPITAL, L.

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re:
HELLAS TELECOMMUNICATIONS
(LUXEMBOURG) II SCA,
Debtor in a Foreign Proceeding.
FOR PUBLICATION
Chapter 15
Case No. 12-10631 (MG)
ANDREW LAWRENCE HOSKING and BRUCE
MACKAY, in their capacity as joint compulsory liquidators
and duly authorized foreign representatives of HELLAS
TELECOMMUNICATIONS (LUXEMBOURG) II SCA,
Plaintiffs,
-against-
TPG CAPITAL MANAGEMENT, L.P., et al.,
Defendants.
Adv. Proc. No. 14-01848 (MG)
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANTS’ FORUM NON
CONVENIENS MOTION AND STAYING THE ACTION ON CERTAIN CONDITIONS
A P P E A R A N C E S:
CHADBOURNE & PARKE LLP
Attorneys for Plaintiffs as against
All Defendants except Defendant Deutsche Bank AG
1301 Avenue of the Americas
New York, New York 10019
By: 	Andrew Rosenblatt, Esq.
Howard Seife, Esq.
Robert M. Kirby, Esq.
Marc D. Ashley, Esq.
SCHWARTZ SLADKUS REICH GREENBERG ATLAS LLP
Attorneys for Plaintiffs as against
Defendant Deutsche Bank AG
270 Madison Avenue
New York, New York 10016
By: 	Alan A.B. McDowell, Esq.
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KASOWITZ, BENSON, TORRES & FRIEDMAN LLP
Attorneys for the TPG Defendants
1633 Broadway
New York, New York 10019
By: 	Paul M. O’Connor, III, Esq.
Andrew K. Glenn, Esq.
ROPES & GRAY LLP
Attorneys for Defendant Apax Partners, L.P.
1211 Avenue of the Americas
New York, New York 10036
By: 	Robert S. Fischler, Esq.
Stephen C. Moeller-Sally, Esq.
CAHILL GORDON & REINDEL LLP
Attorneys for Defendant Deutsche Bank AG
80 Pine Street
New York, New York 10005
By: 	Charles A. Gilman, Esq.
Kevin J. Burke, Esq.
Philip V. Tisne, Esq.
Frederick W. Vaughan, Esq.
LATHAM & WATKINS LLP
Attorneys for the TCW Defendants
355 South Grand Avenue
Los Angeles, California 90071
By: 	Wayne S. Flick, Esq. (pro hac vice)
Amy C. Quartarolo, Esq. (pro hac vice)
MARTIN GLENN
UNITED STATES BANKRUPTCY JUDGE
The adversary proceeding in this chapter 15 case was filed on March 13, 2014. Based on
the Court’s prior rulings (discussed below), much has changed since the adversary proceeding
was initially filed. Originally, the complaint asserted New York law avoidance claims and an
unjust enrichment claim against U.S.-based and foreign-based defendants. The Court dismissed
the New York law avoidance claims against the U.S.-based defendants and dismissed the action
against the foreign-based defendants based on a lack of personal jurisdiction. The Court then
permitted the complaint to be amended to allege avoidance claims under the law of the United
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Kingdom (“U.K.”), where the foreign debtor’s recognized foreign main insolvency proceeding is
pending. In the opinion permitting the complaint to be amended, the Court also rejected
defendants’ argument that the proposed amendment to the complaint was futile because the case
would be subject to dismissal based on forum non conveniens. At that time, there was no
avoidance action pending in the U.K. and only one of the defendants in this action acknowledged
or consented to jurisdiction in the U.K. Thus, there was no adequate alternative forum to
adjudicate the claims against the remaining defendants in this action. That all changed when, on
November 26, 2015, the Plaintiffs filed an avoidance action in the U.K., asserting the same U.K.
avoidance claims included in the First Amended Complaint (as defined below), against the nine
defendants previously dismissed from this action based on lack of personal jurisdiction (the
“U.K. Action”). On January 19, 2016, the named Defendants (as defined below) filed a forum
non conveniens motion. Each defendant has consented to jurisdiction in the U.K. Action, and
also agreed that all of the discovery taken in this action could be used in the U.K. Action.
The question for this Court now is whether the changed circumstances support granting
the Defendants’ forum non conveniens motion. In other words, should the Plaintiffs now be
required to add the U.S.-based defendants to the U.K. Action, and to litigate all of their claims
against all defendants in one forum?
While the Court previously concluded that it could adjudicate the U.K. law claims against
the defendants in this case, it is important to recognize the role a bankruptcy court properly plays
in a chapter 15 case. This case is ancillary to the foreign main proceeding pending in the U.K.
This Court is supposed to provide assistance and cooperation to the U.K. court; the Court may
also administer assets of the foreign debtor located within the U.S. But this Court, a U.S.
bankruptcy court, should not supplant the U.K. court on matters properly pending before the
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U.K. court, particularly when issues of unsettled U.K. law are involved, as is the case here.
When the Court previously rejected the first forum non conveniens argument in permitting
amendment of the complaint to add the U.K. law claims, there was no pending avoidance action
in the U.K.
The Court concluded that the defendants failed to satisfy an essential requirement of the
doctrine, namely that the U.K. was an adequate alternative forum because each defendant was
either amenable to service of process in the U.K., or alternatively, that each defendant consented
to personal jurisdiction in the U.K. That has now changed. The Plaintiffs filed the U.K. Action,
and defendants have consented to jurisdiction in the U.K. Quite clearly, there is now an
adequate alternative forum—indeed, as explained below, a superior forum—to adjudicate all of
the claims against the named defendants in this adversary proceeding. Having the U.K. law
claims against all defendants—U.S.-based and foreign-based—resolved in one proceeding is
clearly superior; it avoids the risk of inconsistent results and it leaves the U.K. law claims to be
resolved by U.K. courts. If the Plaintiffs prevail on their avoidance claims in the U.K., where the
foreign main insolvency proceeding is pending, the relief sections of the U.K.’s Insolvency Act
1986 appear to provide discretion to a U.K. court to tailor relief in a way that this Court could
not do. See Insolvency Act 1986 § 425.
Several matters are pending before the Court and are ready for decision. The Defendants
filed a memorandum in support of their motion to dismiss the First Amended Complaint based
on forum non conveniens (the “Forum Non Conveniens Motion,” ECF Doc. # 255). The Forum
Non Conveniens Motion is supported by the declaration of Paul M. O’Connor III (ECF Doc. #
256). The Plaintiffs filed a memorandum of law in opposition to the Forum Non Conveniens
Motion (the “Opposition,” ECF Doc. # 282). The Opposition is supported by the declaration of
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Marc D. Ashley (the “Ashley Declaration,” ECF Doc. # 283) and the declaration of John
Rothwell Verrill (the “Verrill Declaration,” ECF Doc. # 284). The Defendants also filed a
response to the Opposition (the “Reply,” ECF Doc. # 296). Additionally, the Defendants filed a
motion seeking authorization to file certain unredacted papers under seal (the “Seal Motion,”
ECF Doc. # 285).
In response to an issue raised by the Court, whether Defendants’ jury demand should be
stricken, Plaintiffs and Defendants argue that the parties are entitled to a jury trial in a U.S. court.
The Defendants filed Defendants’ Memorandum of Law in Support of Their Right to Trial by
Jury (the “Defendants’ Jury Demand Mem.,” ECF Doc. # 274). The Plaintiffs filed Plaintiff’s
Memorandum of Law in Response to Order to Show Cause Why Defendants’ Jury Trial Demand
Should Not Be Stricken (the “Plaintiffs’ Jury Demand Mem.,” ECF Doc. # 273). In response, the
Defendants 1 filed Defendants’ Reply in Further Support of Their Right to Trial by Jury (the
“Defendants’ Jury Demand Reply,” ECF Doc. # 280).
Finally, pending before the Court is the Plaintiffs’ motion to certify a defendant class (the
“Class Certification Motion,” ECF Doc. # 308). The Class Certification Motion is supported by
the Plaintiffs’ memorandum of law (the “Class Certification Memorandum,” ECF Doc. # 309)
and the declaration of Marc D. Ashley (the “Ashley Declaration II,” ECF Doc. # 310).
1 	The “Defendants” are TPG Capital Management, L.P., f/k/a TPG Capital, L.P., David Bonderman, James
Coulter, TPG Advisors IV, Inc., TPG GenPar IV, L.P., TPG Partners IV, L.P, T3 Advisors II, Inc., T3 GenPar II,
L.P., T3 Partners II, L.P., T3 Parallel II, L.P., TPG FOF IV, L.P., TPG FOF IV-QP, L.P., TPG Equity IV-A, L.P.,
f/k/a TPG Equity IV, L.P., TPG Management IV-B, L.P., TPG Coinvestment IV, L.P., TPG Associates IV, L.P.,
TPG Management IV, L.P., TPG Management III, L.P., Bonderman Family Limited Partnership, Bondo-TPG
Partners III, L.P., Richard Schifter, William S. Price III, Dick W. Boyce, Kevin R. Burns, Justin Chang, Jonathan
Coslet, Kelvin Davis, Andrew J. Dechet, Jamie Gates, Marshall Haines, John Marren, Michael MacDougall,
Thomas E. Reinhart, Todd B. Sisitsky, Bryan M. Taylor, Carrie A. Wheeler, James B. Williams, John Viola
(collectively, the “TPG Defendants”), Apax Partners, L.P. (“Apax New York”), Deutsche Bank AG (“Deutsche
Bank”), TCW/Crescent Mezzanine III, LLC, TCW/Crescent Mezzanine Trust III, TCW/Crescent Mezzanine
Partners III Netherlands, L.P., TCW/Crescent Mezzanine Partners III, L.P., also known as TCW/Crescent
Mezzanine Fund III, LP, and TCW Capital Investment Corporation (collectively, the “TCW Defendants”).
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Additionally, the Defendants filed a motion seeking authorization to file certain unredacted
papers under seal (the “Class Seal Motion,” ECF Doc. # 311). The Defendants responsive
papers to the Class Certification Motion are due on or before August 22, 2016 and the Plaintiffs’
reply is due on or before September 12, 2016. (See Eighth Case Management and Scheduling
Order, ECF Doc. # 303.)
For the reasons explained below, the Forum Non Conveniens Motion is GRANTED.
Ordinarily, granting a forum non conveniens motion results in dismissal of the action. During
the Hearing (as defined below) on the pending motions, the Court raised the question whether, in
the event that the Court grants the Forum Non Conveniens Motion, the parties would consent to
the entry of an order staying the action rather than dismissing it pending the conclusion of the
U.K. Action. If the U.K. Action results in a judgment against the U.S.-based defendants, the stay
may be lifted for any proceedings seeking enforcement of the judgment. A stay would also make
it unnecessary to resolve at this time the belatedly-filed Class Certification Motion.
Additionally, because a stay is an interlocutory order, the Court may enter the order while
avoiding the constitutional issue of whether a bankruptcy judge has the authority to enter an
order dismissing the action on forum non conveniens grounds.2 Granting a stay of this adversary
2 	This adversary proceeding raising foreign law claims is a related-to action rather than a core proceeding.
The Court may enter a final order or judgment in a related-to proceeding, or with respect to so-called Stern claims,
only with the consent of the parties. 	See Wellness Int’l Network Ltd. v. Sharif, 135 S. Ct. 1932 (2015). 	The
Defendants have not consented to the entry of final orders or judgment. 	The Court is not aware of any cases
resolving whether a bankruptcy judge may enter a final order or judgment without consent dismissing a related-to
action based on forum non conveniens. There is a split of authority about whether a motion to remand an action
raising state law claims to state court is a “core” proceeding, on which a bankruptcy court may enter a final order
remanding a case to state court, or whether the referenced “proceeding” is the underlying lawsuit subject to a
remand motion. See Bayerische Landesbank v. Deutsche Bank AG (In re Residential Capital, LLC), 488 B.R. 565,
571–72 (discussing split in authority). 	Because a remand order—like a dismissal order based on forum non
conveniens—terminates the proceeding as far as the federal court is concerned, the argument is that it is a “final
order” in a related-to action that, absent consent, must be entered by a district court. A stay order, on the other hand,
is an interlocutory order (since the stay may be lifted). Bankruptcy judges may enter interlocutory orders without
consent and without preparing proposed findings of fact and conclusions of law. See O’Tool v. McTagart (In re
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proceeding should in all events be subject to the conditions described below that include, among
other things, that the Defendants (i) consent to jurisdiction in the U.K. court, (ii) waive service of
process (or consent to their counsel accepting service of process) in the U.K. Action, and (iii)
consent to the use of all discovery taken in this action in the U.K. Action (subject, of course, to
the authority of the U.K. court to decide on all questions of admissibility of evidence).
Defendants’ counsel agreed to these conditions during the Hearing and in letters filed with the
Court after the Hearing.3 (See ECF Doc. # 313.)
I. 	GENERAL BACKGROUND
A. 	Procedural Background
Hellas Telecommunications (Luxembourg) II SCA (“Hellas II” or the “Debtor”) was a
Greek telecommunications company. The Debtor is in the process of being wound up in
England, and the joint compulsory liquidators appointed by the U.K. court (the “Foreign
Representatives” or the “Plaintiffs”) sought and obtained recognition of the English liquidation
proceeding as a foreign main proceeding from this Court on March 14, 2012.
On March 13, 2014, the Plaintiffs filed an adversary proceeding complaint (the
“Complaint”) seeking to avoid and recover an initial transfer made by Hellas II to its parent
Trinsum Grp., Inc.), 467 B.R. 734 (Bankr. S.D.N.Y. 2012). Appellate review of an interlocutory order is available,
with leave of the district court, under 28 U.S.C. § 158(a)(3). Id. at 740 n.8.
3 	The issue raised sua sponte by the Court about whether Defendants’ jury demand should be stricken
(because, it appears, that the First Amended Complaint seeks equitable relief) is moot in light of the Court’s ruling
on the Forum Non Conveniens Motion.
This Opinion also does not address the merits of the Plaintiffs’ Class Certification Motion, which is not yet
fully briefed, and, in any event, is unnecessary to decide in light of the Court’s ruling on the Forum Non Conveniens
Motion.
Finally, the Seal Motion is DENIED. 	The unredacted papers filed in support of the Forum Non
Conveniens Motion contain facts relevant to understanding the Court’s decision; also, the Court concludes that the
unredacted papers do not contain material satisfying the requirements of Bankruptcy Code § 107(b). The unredacted
papers shall be filed on ECF within seven days of the entry of this Opinion.
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entity in the amount of approximately €1.57 billion and to avoid and recover approximately
€973.7 million of subsequent transfers allegedly made to several named defendants and an
unnamed class of transferees (together, the “Original Defendants”). Through the Complaint, the
Plaintiffs asserted actual and constructive fraudulent transfer causes of action under the New
York Debtor and Creditor Law (“NYDCL”) against each of the Original Defendants, and an
unjust enrichment claim under unspecified law against the Original Defendants affiliated with
the private equity firms Apax Partners LLP (“Apax Partners”) and TPG Capital Management,
L.P. (“TPG Capital”).
The Original Defendants moved to dismiss the Complaint on various grounds, including
lack of standing, lack of subject matter jurisdiction, lack of personal jurisdiction, and failure to
state a claim. On January 29, 2015, the Court granted in part and denied in part the motions to
dismiss. See Hosking v. TPG Capital Mgmt., L.P. (In re Hellas Telecomms. (Lux.) II SCA), 524
B.R. 488, 497 (Bankr. S.D.N.Y. 2015) (“Hosking I”). The Court dismissed the Complaint for
lack of personal jurisdiction as to Apax Partners and the foreign-based Original Defendants
affiliated with Apax Partners and TPG Capital. See id. at 512. However, the Court concluded
that it could exercise personal jurisdiction over each of the other Original Defendants. See id. at
513. The Court dismissed the Plaintiffs’ NYDCL fraudulent transfer claims for lack of standing.
See id. at 529 & n.41. Only the unjust enrichment claim survived against the U.S.-based
Original Defendants affiliated with Apax Partners and TPG Capital. See id. at 529.
On February 13, 2015, the original TPG and Apax defendants filed a motion seeking
limited reargument on their motion to dismiss the unjust enrichment claim, arguing that the
Court should reconsider Hosking I and dismiss the unjust enrichment claim because the opinion
did not address their argument that the unjust enrichment claim is barred by section 546(e) of the
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Bankruptcy Code. On March 9, 2015, the Court issued an opinion granting the original TPG and
Apax Defendants’ motion for limited reargument in order to address the section 546(e)
argument, but denying their motion to dismiss the unjust enrichment claim, holding that such
claim is not preempted by section 546(e) as a matter of law. See Hosking v. TPG Capital Mgmt.,
L.P. (In re Hellas Telecomms. (Lux.) II SCA), 526 B.R. 499, 515 (Bankr. S.D.N.Y. 2015)
(“Hosking II”).
On March 19, 2015, the Plaintiffs filed motion for leave to amend, and thus to file, a first
amended complaint (the “Motion to Amend,” ECF Doc. # 151) to: (1) join additional proposed
defendants (the “Proposed Defendants”); (2) withdraw the unjust enrichment claim against Apax
NY; (3) remove TCW Asset Management Company (“TCW Asset”) and TCW Group Inc.
(“TCW Group”) as defendants; and (4) plead new causes of action sounding in fraudulent
transfer under U.K. and Luxembourg law (the “Additional Claims”)4 against several of the
Original Defendants and the Proposed Defendants. Through the First Amended Complaint, the
Plaintiffs sought to assert an unjust enrichment claim against the TPG Capital Defendants, the
TPG Advisors IV Defendants, and the T3 Advisors II Defendants under New York law or, in the
alternative, U.K. or Luxembourg law. The defendants objected to the Motion to Amend.
The Court issued an opinion granting in part and denying in part the Motion to Amend on
August 19, 2015. See Hosking v. TPG Capital Mgmt., L.P. (In re Hellas Telecomms. (Lux.) II
SCA), 535 B.R. 543, 553 (Bankr. S.D.N.Y. 2015) (“Hosking III”). Specifically, the Court did
4 	The Additional Claims include: (1) an actual fraudulent transfer claim under section 423 of the U.K.’s
Insolvency Act 1986 (the “U.K. Insolvency Act”) against all Defendants except Apax NY (the “Section 423
Claim”); (2) a fraudulent trading claim under section 213 of the U.K. Insolvency Act against all Defendants except
for the TPG Affiliate Defendants and the Transferee Class (the “Section 213 Claim”); and, (3) in the alternative to
the Section 423 Claim and the Section 213 Claim, an actual fraudulent transfer claim under Article 1167 of the
Luxembourg Civil Code and Article 448 of the Luxembourg Commercial Code against all Defendants except Apax
NY (the “Article 1167 Claim”). (First Am. Compl. at 4.)
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not permit the Plaintiffs to assert their claims under Luxembourg law, but the Court granted the
Motion to Amend in all other respects. Importantly, the Court held that this Court could
adjudicate the claims under Sections 213 and 423 of the U.K. Insolvency Act. Additionally, the
Court included a lengthy discussion of the forum non conveniens argument. See Hosking III at
589–93. The defendants argued that amendment of the complaint to assert U.K. law claims
would be futile because the amended complaint would have to be dismissed on forum non
conveniens grounds. The Court rejected the defendants’ arguments that forum non conveniens
would require dismissal, but the Court concluded that dismissal might be appropriate if “the
Plaintiffs commenced a similar action in the U.K. against the Original Defendants that were
dismissed for lack of personal jurisdiction in Hosking I.”5 Id. at 593 n.38.
B. 	The First Amended Complaint6
On August 20, 2015, the Plaintiffs filed the amended complaint (the “First Amended
Complaint,” ECF Doc. # 189). The causes of action that the Plaintiffs assert in the First
Amended Complaint arise from the events that transpired after TPG Capital and Apax Partners
acquired TIM Hellas. In March 2005, in preparation for the acquisition of TIM Hellas, TPG7
and Apax8 allegedly organized a group of entities under Luxembourg law, including: Hellas,
Hellas I, Hellas Telecommunications (Luxembourg) III, S.à.r.l. (“Hellas III”), Hellas
5 	The discussion in footnote 38 focused on defendant Deutsche Bank A.G., which admitted that it was
subject to personal jurisdiction in the U.K. At that time, none of the U.S.-based defendants agreed or consented to
jurisdiction in the U.K.
6 	The following facts are summarized from the First Amended Complaint.
7 	“TPG” refers collectively to all of the entities and individuals named as defendants and defined below as
the TPG Capital Defendants, the TPG Advisors IV Defendants, the T3 Advisors II Defendants, and the TPG
Affiliate Defendants, plus non-party TPG Capital, LLP. (First Am. Compl. ¶ 21.)
8 	“Apax” refers collectively to defendant Apax Partners, L.P., plus all of the non-party entities and
individuals defined below as Apax Partners, Martin Halusa, and the Apax Europe VI Entities. (Id. ¶ 22.)
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Telecommunications IV, S.à.r.l. (“Hellas IV”), Hellas Telecommunications (Luxembourg) V
SCA (“Hellas V”), and Hellas Finance. (See First Am. Compl. ¶ 113.) Each of the foregoing
entities, and Hellas II, which was organized in 2003 and had remained dormant as a “shelf
company” until the contemplated acquisition of TIM Hellas (collectively, the “Hellas Entities”),
had its registered offices at 8-10, rue Mathias Hardt, Luxembourg. (Id.) Hellas II and Hellas
Finance were wholly owned by Hellas I, which in turn was wholly owned by Hellas. (Id. ¶ 114.)
Hellas, the ultimate parent of the Hellas Entities, was wholly owned by eight investment funds
(the “Sponsors”). (Id.)
In June 2005, the Sponsors acquired approximately 80% of the equity in TIM Hellas, a
Greek telecommunications services provider, through a special purpose vehicle (“Troy GAC”) in
a leveraged buyout transaction. (See Id. ¶¶ 114–16.) The purchase price for the acquisition was
approximately €1.114 billion, plus (i) €166.0 million to pay the existing debt of TIM Hellas and
(ii) €69.9 million for transaction costs. (Id. ¶ 116.) This acquisition was primarily financed with
€1.195 billion in debt incurred by the Hellas Entities, including short-terms loans of
approximately €863 million and €143 million borrowed by Hellas II’s indirect subsidiaries,
Hellas V and Hellas III, respectively. (Id.) Allegedly, TPG and Apax, through the Sponsors,
contributed approximately €211 million of the total financing. (Id.) In November 2005, the
Sponsors acquired the remaining shares of TIM Hellas through Troy GAC for an additional
€263.5 million. (Id. ¶ 118.) The acquisition was again principally funded by debt issued by the
Hellas Entities. (Id.) Subsequently, the Sponsors’ equity interests in TIM Hellas were cancelled,
and TIM Hellas merged into Troy GAC; the surviving entity became a wholly owned subsidiary
of Hellas II. (Id. ¶ 119.)
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In mid-June 2005, Hellas issued 490,000 convertible preferred equity certificates
(“CPECs”) to the Sponsors with a par value of €49 million. (Id. ¶ 124.) At the same time,
Hellas I—the direct subsidiary of Hellas and direct parent of Hellas II—issued 490,000 CPECs
to Hellas, and Hellas II issued an equivalent number of CPECs9 to Hellas I. (Id.)
TPG and Apax allegedly used Hellas and its related entities to acquire Q-Telecom, a
business unit of a large mobile network operator in Greece, in a stock purchase deal that closed
on January 31, 2006. (Id. ¶ 131.) The acquisition was principally financed with debt issued by a
subsidiary of Hellas II and cash contributed by certain other Hellas II subsidiaries. (See id. ¶
132.) In exchange for the transfer of €28.3 million from the Sponsors to Hellas, Hellas issued an
additional 282,681 CPECs to the Sponsors.10 (Id. ¶ 133.)
The Plaintiffs allege that by early 2006, TPG and Apax decided to withdraw the funds
that they had contributed to the TIM Hellas and Q-Telecom acquisitions. (Id. ¶ 135.) On or
around April 12, 2006, Hellas Finance issued €500 million of Floating Rate Senior PIK Notes
due 2014 (the “Original PIK Notes”), guaranteed by Hellas I. (Id.) Deutsche Bank, as one of the
underwriters, received approximately €4.17 million in fees. (Id.) Approximately, €376.6 million
of the €500 million was transferred to the Sponsors on or about the same day. (Id.) The
Plaintiffs allege that of the approximately €376.6 million transferred to the Sponsors, €43.5
million passed through Hellas II to redeem CPECs held at par by its parent Hellas I. (Id. ¶ 135.)
In turn, Hellas I paid €43.5 million to redeem CPECs held at par by its parent Hellas, and Hellas
paid €43.5 million to redeem CPECs held at par by the Sponsors. (Id.) On or about the same
9 	The Plaintiffs contend that CPECs were subordinate to all other present or future obligations of Hellas II,
accrued no interest, and would mature, at par value, 30 years after their issue date. (Id. ¶ 125.) The holder of the
CPECS had no right, at any time, to demand conversion or redemption of the CPECs. (Id.)
10 	Cash was allegedly transferred from Hellas to Hellas I, and then to Hellas II; in exchange, corresponding
CPECs were then issued up the corporate structure from Hellas II to Hellas I, and then to Hellas. (See id. ¶ 133.)
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date, April 12, 2006, all outstanding CPECs underwent a 1-100 split by agreement of the
Sponsors and Hellas. (Id. ¶ 137.)
The Plaintiffs allege that TPG and Apax “put in motion plans to dispose of [Hellas II]’s
subsidiaries in a sale to a third party” no later than June 2006. (Id. ¶ 139.) However, the sale
process purportedly did not generate interest at the prices sought by TPG and Apax, and
subsequently “they instead took steps to extract those returns from [Hellas II] under the guise of
a purported ‘refinancing’ of its debt.” (Id. ¶ 146.)
In December 2006, through a multi-step transaction (the “December 2006 Transaction”),
(i) Hellas II issued €960 million and $275 million of Floating Rate Subordinated Notes due 2015
(the “Sub Notes”); 11 (ii) Hellas Finance and certain subsidiaries of Hellas issued additional series
of notes, the proceeds of which were transferred or loaned to Hellas II; and (iii) Hellas II
transferred a total of approximately €1.57 billion to its parent, Hellas I, of which approximately
€978.7 million was paid to redeem CPECs issued by Hellas II. (Id. ¶ 160.) Subsequently, Hellas
I paid approximately €973.7 million to Hellas to redeem CPECs issued by Hellas I, and Hellas
then paid the Sponsors approximately €973.7 million to redeem CPECs issued by Hellas (the
“December 2006 CPEC Redemption”). (Id.) The remaining portion of the €1.57 billion
transferred from Hellas II to Hellas I was allegedly used to retire other outstanding debt issued
by the Hellas entities and to pay costs associated with the December 2006 Transaction.12 (Id.)
The Sub Notes, as well as (i) €97.25 million of Senior Secured Floating Rate notes due
2012 and (ii) €200 million of Floating Rate Senior PIK Notes due 2015, were issued on
11 	The Sub Notes were marketed and sold to, as well as ultimately purchased by, investors located in
jurisdictions including New York and elsewhere in the United States. (Id. ¶¶ 163–64.) The offering memorandum
provides that New York law governed the Sub Notes and the indenture for the Sub Notes. (Id. ¶ 165.)
12 	Specifically, the proceeds were used to retire the €500 million Original PIK Notes and interest, plus
approximately €48.8 million in transaction costs associated with the December 2006 Transaction.
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December 21, 2006. (Id. ¶ 167.) The Plaintiffs contend that later on December 21, 2006, Hellas
II paid €978,659,712 in proceeds from the December 2006 Transaction to Hellas I to redeem
27.3 million CPECs at €35.82 per CPEC, Hellas I then paid €973,657,610 to Hellas (after
payment of approximately €5 million in advisor fees) to redeem 27.4 million CPECs at €35.57
per CPEC, and Hellas then paid the €973,657,610 it had received from Hellas I to the Sponsors
to redeem 27.4 million CPECs at €35.57 per CPEC. (Id. ¶ 168.)
In February 2007, TPG and Apax sold Hellas and its subsidiaries to Weather Investments
S.p.A., later renamed WIND Telecom S.p.A. (“Weather Investments”), a stock corporation
organized under the laws of Italy. (Id. ¶ 192.) Weather Investments purchased 100% of the
equity of Hellas for €500 million, €6,435,736 of which was allocated toward the purchase of the
remaining CPECs previously issued by Hellas to the Sponsors at the par value of €1 per CPEC.
(Id. ¶ 195.) Hellas II’s financial statements for the year ending December 31, 2007 indicated that
its debt-service obligations grew and resulted in a net financial loss of more than €259.5 million;
its “leverage remained high at 12.4x EBIT, while its cash interest coverage declined to 1.2x
EBIT.” (Id. ¶ 198.) On or about June 5, 2008, Apax Partners paid €500 million to Weather
Investments for a 5% equity stake in Weather Investments. (Id. ¶ 199.) Additionally, Hellas II
“paid a minimum of €1.22 million in additional ‘consulting fees’ to Hellas I and, directly or
indirectly, Hellas I then paid approximately those same amounts to TPG and Apax (the
“Consulting Fees Transfer”).” (Id. ¶ 191.)
In 2009, Hellas II began considering a potential restructuring of its capital structure. (See
id. ¶ 201.) On November 26, 2009, the High Court of Justice of England and Wales approved
placing Hellas II into administration in England and appointed joint administrators (the
“Administrators”). (Id.) On December 1, 2011, the U.K. court discharged the Administrators
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and ruled instead that Hellas II should be wound-up through a compulsory liquidation. (Id.
¶ 202.) The Plaintiffs were thereafter appointed as joint compulsory liquidators. (Id. ¶ 18.)
The Plaintiffs allege that Hellas II was insolvent at the time of the December 2006 CPEC
Redemption and that the Defendants received portions of the proceeds of such transaction from
one or more Sponsors. (See, e.g., id. ¶ 182.) The Plaintiffs assert the following causes of action:
1. 	Actual fraudulent transfer against the Transferee Defendants (as defined in the
First Amended Complaint), the Transferee Class (as defined in the First Amended
Complaint), and TPG Capital pursuant to Section 423 of the U.K. Insolvency Act.
In support, the Plaintiffs argue that (i) the December 2006 CPEC Redemption was
a dividend or distribution to shareholders devoid of any consideration; and (ii) the
Consulting Fees Transfer was made without fair or adequate consideration,
including because TPG and Apax provided no “consulting” or “management”
services of value to Hellas II or its subsidiaries. (Id. ¶¶ 205–11.)
2. 	Fraudulent Trading against the TPG Capital Defendants, the TPG Advisors IV
Defendants, the T3 Advisors II Defendants, Apax New York, and Deutsche Bank
pursuant to Section 213 of the U.K. Insolvency Act. 	In support, the Plaintiffs
allege that Hellas II, by and through its sole manager Hellas and the members of
the Board of Managers of Hellas, carried on business with a fraudulent purpose
including the intent to defraud the actual or potential creditors of Hellas II and in
particular the holders of the Sub Notes, when it executed the December 2006
CPEC Redemption and the Consulting Fees Transfer. (Id. ¶¶ 212–16.)
3. 	Unjust Enrichment against the TPG Capital Defendants, the TPG Advisors IV
Defendants, and the T3 Advisors II Defendants pursuant to New York Law or, in
the alternative, English or Luxembourgish law. The Plaintiffs allege that TPG has
been unjustly enriched through its receipt and retention of the proceeds from the
December 2006 Transaction, the December 2006 CPEC Redemption, and the
Consulting Fees Transfer. (Id. ¶¶ 217–21.)
In response to the First Amended Complaint, various defendants moved to dismiss the
First Amended Complaint. 13 On February 1, 2016, the Defendants moved to withdraw the
reference and transfer this action to the district court.
13 	Specifically, the following motions were filed seeking to dismiss the First Amended Complaint: (A)
Motion to Dismiss of TCW/Crescent Mezzanine III, LLC, TCW/Crescent Mezzanine Trust III, TCW/Crescent
Mezzanine Partners III Netherlands, L.P., TCW/Crescent Mezzanine Partners III, L.P., and TCW/Capital Investment
Corp. (the “TCW Motion,” ECF Doc. # 200), which was joined by the TPG Defendants (the “TPG Joinder” ECF
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On February 4, 2016, the Court entered an order denying the TCW Motion, the TPG
Joinder and the DB Motion. On March 31, 2016, this Court entered a written memorandum
opinion and order denying the TPG Personal Jurisdiction Motion (“Hosking IV,” ECF Doc. #
297). Accordingly, the Forum Non Conveniens Motion remains pending before the Court.
C. 	The Luxembourg Action
The Plaintiffs also commenced an action against Hellas I in Luxembourg (the
“Luxembourg Action”). In the Luxembourg Action, the court held that the Plaintiffs did not
establish under Luxembourg law that Hellas II was entitled to a judgment against Hellas I. (Case
No. 12-08686 (S.D.N.Y.), ECF Doc. #161 (citing to Stamell Decl. ¶ 5).) The Plaintiffs appealed
the Luxembourg decision, and a second trial on the facts and the law will be held in the future.
(Id. at n.6.)
D. 	The U.K. Action
On November 26, 2015, the Plaintiffs commenced the U.K. Action, asserting Section 213
and Section 423 claims solely against the nine dismissed defendants—namely Apax Partners
LLP, Apax Partners Europe Managers Ltd., Apax Europe VI GP Co. Ltd., Apax Europe VI-A,
L.P., Apax Europe VI-1, L.P., Apax Europe VI GP, L.P., Apax WW Nominees Ltd., Martin
Halusa, and TPG Capital LLP (collectively, the “U.K. Respondents”). (Verrill Dec. ¶¶ 3–4 &
Exs. 1-2.) The Plaintiffs stated therein that they commenced the U.K. Action “on a protective
basis to prevent the potential accrual of limitation defenses,” and with the intent to “apply for a
stay of this [U.K. Action] including in light of the advanced proceedings in the pending US
Action.” (Id. ¶ 3, Ex. 2 ¶ 58.)
Doc. # 230); (B) Motion by Deutsche Bank AG to Dismiss the First Amended Complaint (the “DB Motion,” ECF
Doc. # 205); (C) Motion of Certain TPG Defendants to Dismiss the First Amended Complaint for Lack of Personal
Jurisdiction (the “TPG Personal Jurisdiction Motion,” ECF Doc. # 211); and (D) the Forum Non Conveniens
Motion.
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On December 16, 2015, Plaintiffs completed service of process on the U.K. Respondents
with the exception of those four entities with their registered office in Guernsey—namely Apax
Europe VI GP Co. Ltd., Apax Europe VI-A, L.P., Apax Europe VI GP, L.P., and Apax Europe
VI-I, L.P. (together, the “Guernsey Respondents”). (Verrill Dec. ¶ 5.) On January 7, 2016,
Registrar Clive Jones entered an ex parte order (the “January 7 Order”) granting the Plaintiffs
permission to serve the Guernsey Respondents out of the jurisdiction. On January 12, 2016, the
Plaintiffs served all four Guernsey Respondents pursuant to the January 7 Order. (Verrill Dec. ¶
5.)
The January 7 Order granted the Guernsey Respondents permission to apply to set aside
or vary the January 7 Order by no later than 4:00 p.m. on January 28, 2016. (Id. ¶ 6.) On
January 28, 2016, the four U.K. Respondents with their registered office in Guernsey moved to
set aside the ex parte order of the Registrar (analogous to a magistrate judge) that had granted
Plaintiffs permission to serve them out of the U.K. jurisdiction (the “U.K. Application”). (Id.)
On March 16, 2016, the U.K. court issued a decision declining to set aside the January 7 Order
and dismissing the U.K. Application. (Case No. 12-08686 (S.D.N.Y.), ECF Doc. # 160-7 ¶ 120.)
On July 14, 2016, this Court held a hearing regarding the Forum Non Conveniens Motion
(the “Hearing”). Subsequent to the Hearing, the Plaintiffs filed papers in the U.K. court asking
that, if their request for a stay pending determination of this proceeding is denied, that the U.K.
court grant a temporary stay of the U.K. Action until December 1, 2016. (ECF Doc. # 315, 323-
1.) The U.K. court denied the request and instead entered a temporary stay until October 3, 2016
to allow the U.K. court to receive this Court’s decision on the Forum Non Conveniens Motion.
(ECF Doc. # 323-2.) Additionally, the U.K. court scheduled a case management conference to
be held on October 17, 2016. (Id.)
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II. 	THE PARTIES’ ARGUMENTS
A. 	The Motion
The Defendants argue that this Court should dismiss this adversary proceeding because
the Plaintiffs recently commenced the U.K. Action.14 (Forum Non Conveniens Mot. at 1.)
Specifically, the Defendants argue that each factor that courts in this circuit consider in
determining whether to dismiss an action on forum non conveniens weighs in favor of dismissal
of the First Amended Complaint.15 (Id. at 7.)
First, the Defendants argue that—in light of the commencement of the U.K. Action—the
Plaintiffs’ choice of forum should be entitled to little, if any, deference. (Id. at 8.) The
Defendants contend that there is simply “no reason” for this Court to apply any presumption in
favor of the New York forum. (Id.)
Second, the Defendants argue that the U.K. is an adequate alternative forum because (1)
the Defendants are subject to jurisdiction in that forum and (2) that forum permits litigation of
the subject matter of the dispute. (Id. at 9–10.) Specifically, the Defendants contend that they
are subject to jurisdiction in the U.K. because all of the Defendants consented to jurisdiction
there. (Id. at 9.) Moreover, the Defendants argue that the U.K. court permits litigation of the
claims under Sections 213 and 423 of the U.K. Insolvency Act and recognizes an unjust
enrichment claim. (Id. at 10.)
Third, turning to the public interest factors, the Defendants argue that those factors also
weigh in favor of dismissal of the First Amended Complaint. (Id.) The Defendants argue that
14 	The Defendants contend that the TPG and Apax entities dismissed from this case on personal jurisdiction
grounds have been served with pleadings commencing the case in the U.K.
15 	As discussed earlier, all parties have consented to the entry of a stay of this action, rather than dismissal, in
the event the Forum Non Conveniens Motion is granted.
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the U.K. has the greatest interest in having its substantive law govern because, among other
things, (i) the First Amended Complaint alleges that the signatories to the redemption agreement
at issue were all located in the U.K. and Italy, (ii) the initial transfer of funds was made between
English bank accounts, (iii) a substantial portion of the Sub Notes was held by U.K. custodians,
and (iv) the actions relating to the December 2006 CPEC redemption were taken to a
considerable extent by entities located in the U.K. (Id. at 11.)
Moreover, the U.K. has an interest in determining what res judiciata or collateral
estoppel effect to give its European Community sister state’s judgment in the Luxembourg case.
(Id. at 12.) Additionally, the Defendants contend that dismissal of this action will allow the
Plaintiffs’ claims to go forward in a single forum and, as such, preserve judicial resources
because the U.K. Action and this action are duplicative in every material aspect given that the
two actions involve the same claims, the same underlying transaction, the same evidence, and the
same witnesses. (Id. at 11–13.)
Fourth, the Defendants argue that the private interest factors also weigh in favor of
dismissal of the Amended Complaint. The Defendants contend that they have consented to the
use of the fact discovery conducted, as of the date of the Forum Non Conveniens Motion, in this
case, subject to the same objections to admissibility that would be applicable in this Court. (Id.
at 14.) Additionally, the Defendants point to the fact that the Plaintiffs are unable to proceed in
this action against the defendants that were named in the U.K. Action and were previously
dismissed from the action for lack of personal jurisdiction. (Id.) The Defendants also argue that
a large number of key witnesses reside and/or work in the U.K. and that this fact should weigh in
favor of dismissal of the First Amended Complaint because the adjudication of these claims will
require the testimony of these foreign witnesses. (Id. at 15–16.)
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B. 	The Opposition
In the Opposition, the Plaintiffs argue that (i) the Defendants have failed to satisfy their
burden of establishing that an alternative adequate forum exists and (ii) the balance of the private
and public interest factors weigh against the alternative forum. (Opp’n at 9.)
1. 	The Law of the Case Doctrine Applies
First, the Plaintiffs argue that this Court’s prior ruling in Hosking III—holding that the
Plaintiffs’ choice of forum is entitled to substantial deference—should stand. Accordingly,
pursuant to the law of the case doctrine, the Court should not revisit the first step of the forum
non conveniens analysis. (Id.)
2. 	Defendants Have Failed to Demonstrate That the U.K. is an Adequate
Alternative Forum
Despite the fact that all of the Defendants consented to jurisdiction in the U.K., the
Plaintiffs argue that dismissal of this case would prejudice the Plaintiffs because there are
approximately 600 U.S. members of the Transferee Class that have not consented to jurisdiction
in the U.K. (Id. at 2, 10.) The Plaintiffs argue that the Defendants have failed to show that any
of the members of the Transferee Class would be subject to U.K. personal jurisdiction, and that
the fact that the First Amended Complaint fails to name the members of the Transferee Class
should not change the result. (Id. at 10–11.) The Plaintiffs contend that those individuals are not
named because they are so numerous that joinder of all of them would be impracticable. (Id.)
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3. 	Defendants Have Failed to Demonstrate That the Public and Private Interest
Factors Favor Dismissal of This Case
The Plaintiffs argue that the Defendants’ arguments regarding the alleged inconvenience
and judicial waste of litigation in two forums should be discounted because the Defendants chose
to delay this Motion “for over 20 months while pursuing discovery and dispositive motion
practice in this Court.” (Id.) They further contend that this delay is a factor that the Court
should consider and weigh in favor of denying the Forum Non Conveniens Motion. (Id. at 11–
12.)
Moreover, the Plaintiffs argue that the Defendants have exaggerated and failed to
substantiate the difficulties posed by foreign witnesses and documents. (Id.) The Plaintiffs point
to the fact that discovery is essentially complete, as the Defendants have produced over one
million pages of documents and 16 current or former employees for videotaped deposition. (Id.
at 13.) The sixteen witnesses are widely dispersed in multiple jurisdictions including four in the
United States, eleven in the U.K., and one in India. (ld.) The Plaintiffs note that the Defendants
do not claim that any of the sixteen employees would be unavailable to testify in the United
States. (Id.) Moreover, the Plaintiffs argue that there is no single forum in which all likely
witnesses could be compelled to testify. (Id. at 15.) Accordingly, the Plaintiffs contend that the
Defendants have failed to show that the location of witnesses will pose a significant obstacle.
(Id. at 13)
Additionally, the Plaintiffs argue that a “local” dispute does not exist in this case. (Id. at
15.) On the contrary, this action seeks to recover from hundreds of U.S. transferees’ proceeds
generated from an international transaction through which British, Italian, German, and
American executives of TPG, Apax, and DB caused Hellas II, a Luxembourg entity, to raise
funds from investors across the world under the imprimatur of U.S. law, and then to distribute
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those proceeds through wire transfers in the U.K., Belgium, Luxembourg, and the U.S. to the
detriment of creditors worldwide. (Id. 15–16.)
The Plaintiffs argue that the applicability of U.K. law alone does not warrant dismissal.
(Id. at 17.) Instead, the Plaintiffs contend that the “need to apply foreign law is not alone
sufficient to dismiss under the doctrine of forum non conveniens.” (Id. at 17 (citing to R.
Maganlal & Co. v. M.G. Chem. Co., 942 F.2d 164, 169 (2d Cir. 1991); Rahl v. Bande, 328 B.R.
387, 411 (S.D.N.Y. 2005)).) As such, the Plaintiffs urge this Court to apply U.K. law to
adjudicate the issues in this case. (Id. at 18.)
The Plaintiffs point to the fact that the U.K. Action was only filed against the U.K.
Respondents (e.g., nine defendants), as compared to this action that is asserted against the
Defendants (e.g., over forty defendants). (Id. at 2.) The Plaintiffs contend that the defendants in
the U.K. Action chose to seek dismissal from this action on personal jurisdiction grounds and
then rejected the Plaintiffs’ offer to enter into a tolling agreement to defer any U.K. litigation.
(Id. at 3.)
Moreover, the Plaintiffs argue that there are no grounds to conclude that this Court is less
qualified than a U.K. court to understand the Luxembourg panel’s decision. (Id. at 18.) The
Plaintiffs contend that the Luxembourg decision does not “raise[] serious questions regarding
[whether] Plaintiffs are collaterally estopped from pursuing [their] Section 213 and Section 423
claims.” (Id. at 19 (citing to Forum Non Conveniens Mot. 3.) The Plaintiffs allege that the
Luxembourg litigation asserted illegal dividend claims under Luxembourg companies law, and
not fraudulent transfer claims. (Id.)
Finally, the Plaintiffs argue that the U.K. Action is not duplicative because the Plaintiffs
are the only parties in common to both actions. (Id. at 20.)
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4. 	Dismissal of This Action at This Stage Would Severely Prejudice the
Plaintiffs16
The Plaintiffs argue that dismissal of over forty named Defendants “and class
representatives” from this action would result in dismissal with prejudice of the Plaintiffs’
Section 423 claim as against the Transferee Class. (Id. at 22.) Moreover, the Plaintiffs contend
that—even if the Court grants the Plaintiffs leave to amend to name the U.S. Transferee Class
members as individual defendants—granting the Forum Non Conveniens Motion would
prejudice the Plaintiffs because it would force Plaintiffs to start over in this Court, and require
Plaintiffs and the U.S. Transferee Class members to litigate here without TPG, Apax, or DB.
(Id.)
Moreover, the Plaintiffs contend that dismissal in favor of the U.K. Action would be
prejudicial because the parties through their U.S. counsel have briefed and argued nine motions
to dismiss, reviewed 1.5 million pages of documents, conducted videotaped depositions of
nineteen witnesses, answered hundreds of interrogatories and requests for admission, and served
16 	In addition to the arguments enumerated herein, Plaintiffs’ counsel argued at the Hearing that the Court
should deny the Forum Non Conveniens Motion because the Plaintiffs did not have the financial resources to
prosecute these actions in the U.K. and, as such, the Plaintiffs would be forced to withdraw the U.K. Action. (Hr’g
Tr. 38:7–39:7.) In support, Plaintiffs’ counsel cited Murray v. British Broad. Corp., 81 F.3d 287 (2d Cir. 1996). In
Murray, the Second Circuit held that the financial hardship of a plaintiff, who was a New York resident, “may not
be considered in determining the availability of an alternative forum but must be deferred to the balancing of
interests relating to the forum’s convenience.” Id. at 292–93 (emphasis in original). 	In turning to the balancing of
the interests, the Second Circuit determined that (i) the unavailability of contingent fee arrangements in England was
of little weight because the availability of such arrangements in the United States is based on a policy decision and
that decision “was not designed to suck foreign parties disputing foreign claims over foreign events into American
courts” and (ii) considering the plaintiff’s financial information and creditworthiness, the Second Circuit was
unpersuaded by the argument that the plaintiff’s financial condition posed insurmountable barriers to litigation in
England. 	Id. at 294. 	The Second Circuit ultimately affirmed the lower court’s dismissal of the action on the
grounds of forum non conveniens. In this case, the foreign Plaintiffs’ argument, raised for the first time during the
Hearing, regarding their financial condition was made without any evidentiary support. 	In light of the lack an
evidentiary record, the Court finds this argument unpersuasive. 	Moreover, even if this statement had sufficient
evidentiary support, in light of the other factors that favor granting a forum non conveniens motion, the Court would
still reach its same conclusion, that the Forum Non Conveniens Motion should be granted. Additionally, Plaintiffs’
counsel has failed to provide any case law involving a forum non conveniens motion where the plaintiff was foreign
and attempted to argue that financial hardship should preclude granting a forum non conveniens motion.
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extensive expert reports. (Id.) The Plaintiffs argue that the amount of time and effort that has
been expended by the parties in this case “greatly increases” the presumption against dismissal.
(Id. at 23.) The Plaintiffs argue that there is no guarantee that the U.K. court would agree to
allow the fact discovery conducted to date in the United States to be used in the U.K. Action.
(Id. at 24.)
C. 	The Reply
1. 	The U.K. is an Adequate Alternative Forum
The Defendants argue that the class allegations are irrelevant because the members of the
speculative defendant class are not named defendants, and in any event, the class allegations are
peripheral to this action. (Reply at 1, 2.) The Defendants argue that the Plaintiffs have been
indifferent to the class allegations until being faced with the Forum Non Conveniens Motion and
that indifference reflects the following scenario: in the event that the Plaintiffs are successful on
their Section 423 claims against the named defendants, they expect to obtain full recovery from
those defendants, and, conversely, to the extent that the Plaintiffs are unsuccessful in avoiding
the transfers to the named defendants, they would not be able to pursue claims against
subsequent transferee members of the putative class. (Id. at 3.)
The Defendants also argue that it is highly doubtful that the Court will certify a defendant
class in this case, because the members of the class are expected to assert individual defenses
and, as such, common issues would not predominate. (Id.)
As an alternative, the Defendants assert that this Court may preserve those claims in the
event that it decides that the claims against the named Defendants should be heard in the U.K.
(Id. at 1.) Specifically, the Defendants argue that the Court can sever those claims (and stay
them) pursuant to Second Circuit authority. (Id.) Alternatively, even if the Court decides not to
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sever and preserve the claims, the Plaintiffs would be free to pursue individual claims against the
members of the speculative defendant class. (Id. at 1–2.)
2. 	Balancing of the Public and Private Interests Weighs in Favor of Dismissal
The Defendants reargue the importance of the existing U.K. Action. (Id. at 4–5.) The
Defendants contend that Plaintiffs’ argument—that the U.K. defendants are not the same as the
Defendants in this action—is of no moment because proceeding with both actions creates the
possibility that associated parties will be subject to conflicting rulings and judgments regarding
the same issues and transaction. (Id. at 5.)
Additionally, the Defendants contend that two trials regarding the same claims, brought
by the same Plaintiffs, concerning the same transaction and evidence, would be inherently
inefficient and wasteful, and it would impose unwarranted burdens and expense on Defendants.
(Id.)
3. 	Plaintiffs, Not Defendants, Are Guilty of Undue Delay
The Defendants argue that the undue delay in bringing the Forum Non Conveniens
Motion was caused by the Plaintiffs. The defendants in the U.K. Action were dismissed from
this action in January 2015. (Id. at 6.) As of November 13, 2015, the Plaintiffs remained non-
committal whether they would sue in the U.K. (Id. at n.10.) The Defendants received the U.K.
filing in mid-December, and it was only then that they were able to file the Forum Non
Conveniens Motion. (Id. at 7.)
4. 	The Applicability of U.K. Law Weighs in Favor of Dismissal
The Defendants recognize that this Court is capable of interpreting and applying U.K.
law. However, the Defendants contend that there is no sound reason for this Court to do so.
(Id.) The Defendants further argue that if this action remains pending before this Court, this
Court will need to resolve a difficult issue of apparent first impression under U.K. law, i.e.,
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whether a U.S. court is authorized to grant relief under Section 423 of the U.K. Insolvency Act.
(Id. at 7–8.)
5. 	Dismissal Would Not Unduly Prejudice Plaintiffs
The Defendants contend that in a multiple defendant case like this one, a court may, upon
motion or “on its own,” sever claims, pursuant to FED. R. CIV. P. 21, against one or more
defendants, and grant a forum dismissal as to other defendants. (Id. at 8 (citing to Erausquin v.
Notz, Stucki Mgmt. (Bermuda) Ltd., 806 F. Supp. 2d 712, 723 (S.D.N.Y. 2011) (severing claims
against one defendant in order “to facilitate a forum non conveniens dismissal” as to other
defendants) (internal citations omitted)).)
The Defendants argue that, in this case, the absent members of the putative class are
“only indirectly connected to the [alleged] manipulations which form the subject matter of [this]
action,” and the allegations against putative class members are peripheral. (Id. at 9 (citing
Wyndham Assocs. v. Bintliff, 398 F.2d 614, 618 (2d Cir. 1968)).) Thus, if the Court concludes
that the claims against the putative class are worthy of being preserved in the context of a forum
non conveniens dismissal of the named Defendants, the Court could sua sponte sever the claims
against members of the putative class—and then stay the claims pending the U.K. court’s
decision. (Id.)
The Defendants argue that their agreement that all discovery taken in this action may be
used in the U.K. Action disposes of the Plaintiffs’ argument that dismissal would prejudice them
insofar as they would have to restart discovery. (Id. at 10.)
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III. 	DISCUSSION
A. 	Preliminary Issues
1. 	Law of the Case Doctrine
Courts have discretion to reconsider or modify their interlocutory orders. United States v.
Uccio, 940 F.2d 753, 758 (2d Cir. 1991). An “interlocutory order,” as opposed to a final order,
does not completely resolve all of the issues pertaining to a discrete claim. See, e.g., Shimer v.
Fugazy (In re Fugazy Exp., Inc.), 982 F.2d 769, 776 (2d Cir. 1992). The principle of the law of
the case doctrine is essentially that “where litigants have once battled for the court’s decision,
they should neither be required, nor without good reason permitted, to battle for it again.”
Zdanok v. Glidden Co., Durkee Famous Foods Div., 327 F.2d 944, 953 (2d Cir.1964). The
discretion to reconsider or modify an interlocutory order is informed by the law of the case
doctrine. Uccio, 940 F.2d at 758. The decision whether or not to apply law of the case is, in
turn, informed principally by the concern that disregard of an earlier ruling not be allowed to
prejudice the party seeking the benefit of the doctrine. (Id.)
Courts apply the law of the case doctrine “[over] the concern that disregard of an earlier
ruling [will] prejudice the party seeking the benefit of the doctrine. In this context, ‘prejudice’
does not mean harm resulting from the failure to adhere to the prior decision; ‘rather, it refers to
a lack of sufficiency of notice’ or a lack of sufficient ‘opportunity to prepare armed with the
knowledge that [the prior ruling is not deemed controlling].’” Id. (internal citations omitted). In
other words, “the law of the case is a discretionary doctrine that need not be applied when no
prejudice results from its omission.” First Nat’l Bank of Hollywood v. Am. Foam Rubber Corp.,
530 F.2d 450, 453 n.3 (2d Cir. 1976). The doctrine is “admittedly discretionary and does not
limit a court’s power to reconsider its own decisions prior to final judgment.” Virgin Atl.
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Airways, Ltd. v. Nat’l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992); see also Arizona v.
California, 460 U.S. 605, 618 (1983) (law of case doctrine “does not limit the tribunal’s power”).
If the law of the case doctrine applies, “[c]ourt[s] will adhere to prior rulings in a given
case absent cogent or compelling reasons to deviate.” Uccio, 940 F.2d at 758 (internal
quotations and citations omitted). The three primary reasons justifying a reconsideration include,
“an intervening change of controlling law, the availability of new evidence, or the need to correct
a clear error or prevent manifest injustice.’” Virgin Atlantic Airways, Ltd., 956 F.2d, at 1255
(quoting 18B CHARLES ALAN WRIGHT , ARTHUR R. M ILLER, EDWARD H. COPPER, ET AL .,
FEDERAL PRACTICE AND PROCEDURE § 4478 (2d ed.)). In general however, issues that were
justifiably not seen at an earlier time, including events or evidence, “may be seen as creating new
issues that have not been decided and thus lie outside the law of the case.” WRIGHT § 4478.
In this case, the Plaintiffs argue that this Court’s prior ruling in Hosking III should stand
and the Court should not revisit the first step of the forum non conveniens analysis. While the
Court previously held that the Plaintiffs’ choice of forum was entitled to substantial deference,
now there is justification for the Court to reconsider whether the Plaintiffs’ choice of forum
merits a substantial degree of deference. Now, in light of the Plaintiffs’ commencement of the
U.K. Action, it is appropriate for the Court to evaluate the deference that should be afforded to
the Plaintiffs’ choice of forum. In Hosking III, this Court declined to decide whether forum non
conveniens dismissal of DB would be appropriate, deferring such a decision to a later time “if,
for instance, the Plaintiffs commenced a similar action in the U.K. against the Original
Defendants that were dismissed for lack of personal jurisdiction.” Hosking III at 593 n.38.
Since the entry of Hosking III, the Plaintiffs have commenced the U.K. Action, fulfilling the
scenario envisioned by the Court. Accordingly, in light of the changed circumstances—which
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the Court previously previewed—the Court, in its discretion, declines to apply the law of the
case doctrine in light of the U.K. Action.
2. 	The Purpose of Chapter 15
It is important to recognize the role of this Court in a chapter 15 case, as a gating issue,
before diving into the forum non conveniens analysis. Congress enacted chapter 15 of the
Bankruptcy Code in 2005, as part of the Bankruptcy Abuse Prevention and Consumer Protection
Act of 2005 (Pub. L. No. 109–8, 119 Stat. 23), to foster international cooperation and comity,
and provide greater certainty and more efficient administration of cross-border cases. Chapter 15
implemented the Model Law on Cross–Border Insolvency (the “Model Law”) promulgated by
the United Nations Commission on International Trade Law (“UNCITRAL”). In interpreting
chapter 15, section 1508 requires the Court to “consider its international origin, and the need to
promote an application of [the] chapter that is consistent with the application of similar statutes
adopted by foreign jurisdictions.” 11 U.S.C. § 1508. The House Report contemplates courts
looking to the UNCITRAL guide to enactment of the Model Law and the reports cited therein to
aid the courts in achieving a uniform interpretation of chapter 15. 	H.R. Rep. No. 109–31, pt. 1,
109–10, 2005 U.S.C.C.A.N. 88, 172–73 (the “House Report”). Chapter 15 cases are “generally
intended to be supplementary to cases brought in a debtor’s home country.” 8 C OLLIER ON
BANKRUPTCY ¶ 1501.01 (15th ed. 2015) (citing to the House Report).)
Chapter 15 contains an express statement of purpose: “[t]he purpose of [the] chapter is to
incorporate the Model Law on Cross-Border Insolvency so as to provide effective mechanisms
for dealing with cases of cross-border insolvency,” with the express objectives of, among other
things, cooperation between “the courts and other competent authorities of foreign countries
involved in cross-border insolvency cases.” 11 U.S.C. § 1501. The chapter expressly applies
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where “assistance is sought in the United States by a foreign court or a foreign representative in
connection with a foreign proceeding.” Id. (emphasis added).
This case is ancillary to the foreign main proceeding pending in the U.K. Here, as
demonstrated by the chapter 15 petition for recognition of the foreign proceeding and the verified
petition that were contemporaneously filed with the Court, the Plaintiffs sought recognition of
the U.K. proceeding as it was “consistent with the goals of international cooperation and
assistance to foreign courts which is embodied in Chapter 15 of the Bankruptcy Code.” (Case
No. 12-10631, ECF Doc. # 2 at 12 (emphasis added).) Indeed, the Plaintiffs sought recognition
because “the [U.K.] Proceeding, with the assistance of this Court, offer[ed] the best means to
liquidate the Company’s assets and achieve a global, equitable resolution of the Company’s
liabilities.” (Id. at 13 (emphasis added).)
In light of the origin and purpose of chapter 15, and as evidenced by the Plaintiffs’
original request for recognition, the function of this Court is to provide assistance to the U.K.
court. Additionally, the Court may also administer assets of the foreign debtor located within the
U.S. However, this Court will not supplant the U.K. court on matters properly pending before
the U.K. court, particularly when issues of unsettled U.K. law are involved, as is the case here.
The U.K. court is in a better position to interpret and apply U.K. law to the complex facts raised
by this case—that is certainly true, in the circumstances here, where (i) the U.K. Action is
already pending, (ii) the U.K. court recently denied Plaintiffs’ motion to stay the U.K. Action
even if this case proceeds in this Court (see Judgment, dated 19th July 2016 (ECF Doc. # 323-2,
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¶¶ 41, 44)), and (iii) all of the named Defendants have consented to jurisdiction in the U.K.
court.17
B. 	Forum Non Conveniens
The doctrine of forum non conveniens “is a discretionary device permitting a court in rare
instances to ‘dismiss a claim even if the court is a permissible venue with proper jurisdiction
over the claim.’” Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 100 (2d Cir. 2000) (citation
omitted). Whether to dismiss an action on forum non conveniens grounds is a decision that “‘lies
wholly within the broad discretion of the [] court’ and should be reversed only if ‘that discretion
has been clearly abused.’” Peregrine Myanmar Ltd. v. Segal, 89 F.3d 41, 46 (2d Cir. 1996)
(quoting Scottish Air Int’l, Inc. v. British Caledonian Grp., PLC, 81 F.3d 1224, 1232 (2d Cir.
1996)).
A motion to dismiss on forum non conveniens grounds may be made at any time. 14D
CHARLES ALAN WRIGHT , ARTHUR R. M ILLER, EDWARD H. COPPER, ET AL ., FEDERAL PRACTICE
AND PROCEDURE § 3828 (4th ed. 2016); cf. Jacobs v. Felix Bloch Erben Verlag fur Buhne Film
und Funk KG, 160 F. Supp. 2d 722, 742 (S.D.N.Y. 2001) (“[T]he caselaw seems to be clear that
forum non conveniens motions are not governed by the same time constraints imposed by Rule
17 	In Hosking III, the Defendants argued that the Court should abstain from deciding the U.K. law claims
based on international comity. The Court rejected this argument, concluding that federal law “does not authorize
permissive abstention of this Adversary Proceeding.” 535 B.R. at 588. The Court followed the Fifth Circuit’s
decision in Firefighters’ Ret. Sys. v. Citco Grp. Ltd. 788 F.3d 425, 431 (5th Cir. 2015), determining that the
exclusionary language in the first clause of 28 U.S.C. § 1334(c)(1) (“Except with respect to a case under chapter 15
of title 11, nothing in this section prevents a district court . . . , in the interest of comity with State courts or respect
for State law, from abstaining from hearing a particular proceeding arising under title 11 or arising in or related to a
case under title 11.” (emphasis added)), applies to an adversary proceeding as well as the main case so that a
bankruptcy court may not permissively abstain from hearing an adversary proceeding related to a case under chapter
15. Hosking III, 535 B.R. at 589. The Court then separately rejected the Defendants’ forum non conveniens
argument. Id. at 589-93. No cases have held that the exclusionary language in section 1334(c)(1) precludes
consideration of forum non conveniens. The Court concludes that section 1334(c)(1) does not stand as an obstacle to
application of forum non conveniens, which is analyzed in the next section of this Opinion. The policies animating
chapter 15 support having the U.K. court, where the main insolvency proceeding is pending, resolve the U.K. law
issues in this case.
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12(h) of the Federal Rules of Civil Procedure on personal jurisdiction and venue motions.”
(citations omitted)). However, in evaluating whether a plaintiff’s choice of forum was
convenient, the court may consider the defendant’s delay in bringing a motion to dismiss on the
basis of forum non conveniens. See Genpharm Inc. v. Pliva-Lachema a.s., 361 F. Supp. 2d 49,
59 (E.D.N.Y. 2005) (citation omitted).
In the Second Circuit, courts apply a three-step process to determine whether to dismiss
an action for forum non conveniens. Wilson v. Eckhaus, 349 F. App’x 649, 650 (2d Cir. 2009)
(noting that the Second Circuit adopted a “three-step inquiry” to analyze forum non conveniens
dismissal); see Iragorri v. United Techs. Corp., 274 F.3d 65, 73–74 (2d Cir. 2001) (en banc)
(adopting a three-step process for determining whether forum non conveniens dismissal is
appropriate).
 	First, the court must “determine[] the degree of deference properly accorded the
plaintiff’s choice of forum.” 	Norex Petroleum Ltd. v. Access Indus., Inc., 416
F.3d 146, 153 (2d Cir. 2005) (citing Iragorri, 274 F.3d at 73).
 	Second, “after determining whether the plaintiff’s choice is entitled to more or
less deference,” the court must determine “whether an adequate alternative forum
exists.” Iragorri, 274 F.3d at 73; see Wiwa, 226 F.3d at 100 (citing Piper Aircraft
Co. v. Reyno, 454 U.S. 235, 254 n.22 (1981); Gulf Oil Corp. v. Gilbert, 330 U.S.
501, 506–07 (1947)).
 	Third, the court must “then balance a series of factors involving the private
interests of the parties in maintaining the litigation in the competing fora and any
public interests at stake.” Wiwa, 226 F.3d at 100 (citing Gilbert, 330 U.S. at 508–
09).
“The defendant has the burden to establish that an adequate alternative forum exists and
then to show that the pertinent factors ‘tilt[] strongly in favor of trial in the foreign forum.’”
Wiwa, 226 F.3d at 100 (quoting R. Maganlal & Co., 942 F.2d at 167); see Iragorri, 274 F.3d at
74–75 (stating that “[a] defendant does not carry the day simply by showing the existence of an
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adequate alternative forum. The action should be dismissed only if the chosen forum is shown to
be genuinely inconvenient and the selected forum significantly preferable.”).
1. 	Degree of Deference to the Plaintiffs’ Choice of Forum
A plaintiff’s choice of forum is generally entitled to great deference. Allstate Life Ins.
Co. v. Linter Grp. Ltd., 994 F.2d 996, 1001 (2d Cir. 1993) (citations omitted); Gilbert, 330 U.S.
at 508 (“[U]nless the balance [of the factors] is strongly in favor of the defendant, the plaintiff’s
choice of forum should rarely be disturbed.”). Where a plaintiff has brought an action in its
home forum, courts give the plaintiff’s choice of forum substantial deference “because it is
presumed to be convenient.” Iragorri, 274 F.3d at 71 (citing Piper, 454 U.S. at 255–56). A
foreign plaintiff’s choice of the United States as a forum is entitled to less deference because “it
‘is much less reasonable’ to presume that the choice was made for convenience.” Id. (quoting
Piper, 454 U.S. at 256). “In such circumstances, a plausible likelihood exists that the selection
was made for forum-shopping reasons . . . .” Id. Even if forum-shopping reasons did not inform
the foreign plaintiff’s decision to file an action in a U.S. court, “there is nonetheless little reason
to assume that it is convenient for a foreign plaintiff.” Id.
In determining the degree of deference to be afforded to a foreign plaintiff’s choice of a
U.S. forum, courts consider various factors to ascertain whether the plaintiff’s forum choice was
motivated by convenience or instead by the desire to forum shop. See Norex, 416 F.3d at 155
(citing Iragorri, 274 F.3d at 72). The following factors are generally considered relevant in
determining whether the plaintiff’s choice of forum was motivated by genuine convenience: “[1]
the convenience of the plaintiff’s residence in relation to the chosen forum, [2] the availability of
witnesses or evidence to the forum district, [3] the defendant’s amenability to suit in the forum
district, [4] the availability of appropriate legal assistance, and [5] other reasons relating to
convenience or expense.” Id. (quoting Iragorri, 274 F.3d at 72). “Circumstances indicative of
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forum shopping . . . include ‘[1] attempts to win a tactical advantage resulting from local laws
that favor the plaintiff’s case, [2] the habitual generosity of juries in the United States or in the
forum district, [3] the plaintiff’s popularity or the defendant’s unpopularity in the region, or [4]
the inconvenience and expense to the defendant resulting from litigation in that forum.’” Id.
(quoting Iragorri, 274 F.3d at 72).
In this case, there is little reason to find that the United States is a convenient forum for
the foreign Plaintiffs. First, turning to the Plaintiffs’ motives in their choice of forum, it is
difficult to argue that Plaintiffs’ decision was motivated by genuine convenience, as the United
States is not a convenient forum for the Plaintiffs, who reside in the U.K. In fact, the U.K. is the
most convenient forum for the Plaintiffs. Second, it is arguable that the circumstances in this
case may be “indicative of forum shopping.” Id. Despite the fact that the Plaintiffs have
recognized that “England has the greatest interest in seeing its law applied to the claims alleged
in the First Amended Complaint,” the Plaintiffs remain steadfast in their pursuit of an action in
the United States.18 Hosking III at 574. It is conceivable that the Plaintiffs are fighting to keep
this case in the United States because they seek a “tactical advantage resulting from local laws”
or they are hopeful of an advantage given the degree of unpredictably associated with an
American court’s interpretation of U.K. law. Norex, 416 F.3d at 155 (citing Iragorri, 274 F.3d at
72.) Indeed, when this case was initially filed, the Complaint asserted New York law claims
exclusively. Only after the New York law avoidance claims were dismissed did Plaintiffs seek
to amend the Complaint to add the U.K. law claims. If the New York law avoidance claims had
survived, the analysis of the forum non conveniens motion would be quite different. In light of
18 	“While this Court is not necessarily convenient in relation to England, the Plaintiffs’ residence, the
Plaintiffs’ counsel is located in New York.” See Hosking III at 592 (emphasis added).
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these factors, and the fact that the Defendants have consented to jurisdiction in the U.K., the
Court gives little deference to the Plaintiffs’ chosen forum. It is evident that the U.K. is the most
convenient forum and, as such, the United States is a less convenient forum than the U.K. 19
2. 	Existence of an Adequate Alternative Forum
“An alternative forum is ordinarily adequate if the defendants are amenable to service of
process there and the forum permits litigation of the subject matter of the dispute.” In re
Arbitration Between Monegasque De Reassurances S.A.M. v. Nak Naftogaz of Ukraine, 311 F.3d
488, 499 (2d Cir. 2002) (citing Piper, 454 U.S. at 254 n.22). A court cannot dismiss an action on
forum non conveniens grounds unless it “satisf[ies] itself that the litigation may be conducted
elsewhere against all defendants.” PT United Can Co. Ltd. v. Crown Cork & Seal Co. Inc., 138
F.3d 65, 73 (2d Cir. 1998) (citing Blanco v. Banco Indus. de Venezuela, S.A., 997 F.2d 974, 981
(2d Cir. 1993)). “If there is no adequate alternative forum, the inquiry ends, and the motion to
dismiss is denied.” Id. (citing Piper, 454 U.S. at 254 n.22). A defendant’s agreement to submit
to the jurisdiction of the foreign forum will generally satisfy the requirement that the defendant
be amenable to process there. See DiRienzo v. Phillip Servs. Corp., 232 F.3d 49, 57 (2d Cir.
2000), vacated in part on other grounds, 294 F.3d 21 (2d Cir. 2002).
a. 	Jurisdiction Over the Named U.S. Defendants
The Defendants have agreed to submit to the jurisdiction of the U.K. court. Therefore,
the Defendants have established an adequate alternative forum. Cf. Rio Tinto PLC v. Vale S.A.,
Case No. 14 Civ. 3042 (RMB), 2014 WL 7191250, at *13 (S.D.N.Y. Dec. 17, 2014) (“The Court
finds that England is not, in this instance, an adequate alternative forum to New York because, as
19 	As discussed above, the purpose of chapter 15 is advanced by having the U.K. court resolve the U.K. law
issues in this case. This weighs against giving deference to the Plaintiffs’ (Foreign representatives appointed by the
U.K. court) choice of a New York forum for the U.K. law claims.
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noted, Defendants . . . , who reside in the United States, may not be amenable to service of
process by English courts.”).
b. 	The Defendant Class
While Plaintiffs included defendant class allegations in the original complaint and in the
First Amended Complaint, they waited until the Defendants filed their Forum Non Conveniens
Motion to move for class certification. At this time, the “defendant class” is purely speculative.
Moreover, it is unlikely that certification of a defendant class is proper under the facts and
circumstances of this case, even if the adversary proceeding were going to be litigated in this
Court. Rule 23 requires a class certification motion “at an early practicable time”; this class
certification motion was filed two years after the adversary proceeding was filed and it seems
intended to throw a roadblock in the way of the Forum Non Conveniens Motion, but it is, at
most, a minor speed bump, easily disposed of. Accordingly, the Court concludes that the Class
Certification Motion will not affect the result of the Forum Non Conveniens Motion.
Defendant class actions are authorized by the language of Federal Rule of Civil
Procedure 23(a), stating “one or more members of a class may sue or be sued.” While most class
actions involve a class of plaintiffs, Rule 23 does not differentiate on its face between plaintiff
and defendant classes. 7A CHARLES ALAN WRIGHT , ARTHUR R. M ILLER, EDWARD H. COPPER, ET
AL ., FEDERAL PRACTICE AND PROCEDURE § 1770 (3d ed. 2016). For any class to be certified, the
four Rule 23(a) requirements—numerosity, commonality, typicality, and adequate
representation—must be met, and at least one subsection of Rule 23(b) must be satisfied. While
Rule 23(a) expressly authorizes defendant classes, it does not necessarily follow that they are
permitted under all three subsections of Rule 23(b). And even if they are permitted, defendant
classes are rarely certified. See J AMES WAGSTAFFE , PRACTICE GUIDE : FEDERAL CIVIL
PROCEDURE BEFORE TRIAL (nat’l ed. 2016) Ch. 10-C. While a defendant class could be certified
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under Rule 23(b)(3), defendant classes are rarely certified under this subsection because any
member of the class can exercise the right to opt out to avoid being bound to an unfavorable
judgment under this subsection. WAGSTAFFE , 10:914.
Because the Forum Non Conveniens Motion is being granted, no “class representatives”
remain in this case, making class certification unavailable. In any event, the stay of this action
pending resolution of the U.K. action makes it unnecessary to decide the class certification
motion.
3. 	The Balancing of Public and Private Factors
In determining whether the doctrine of forum non conveniens should be applied, a court
should also consider “factors of public interest” and the “private interest[s] of the litigant.” Gulf
Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947). A balancing of the “private and public interest
factors [must] tilt[] heavily in favor of the alternative forum.” Abdullahi v. Pfizer, Inc., 562 F.3d
163, 189 (2d Cir. 2009); see also Alfadda v. Fenn, 159 F.3d 41, 45–46 (2d Cir. 1998). “The
public interest factors include: (1) settling local disputes in a local forum; (2) avoiding the
difficulties of applying foreign law; and (3) avoiding the burden on jurors by having them decide
cases that have no impact on their community.” Maersk, Inc. v. Neewra, Inc., 554 F. Supp. 2d
424, 454 (S.D.N.Y. 2008) (citations omitted). “The private interest factors include: (1) the
relative ease of access to evidence; (2) the cost to transport witnesses to trial; (3) the availability
of compulsory process for unwilling witnesses; and (4) other factors that make the trial more
expeditious or less expensive.” Id. at 453–54 (citations omitted).
As detailed below, the balancing of the public and private factors weighs in favor of the
alternative forum.
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a. 	The Public Factors
i. 	Settling Local Disputes in a Local Forum
This case involves events and transactions that implicate various countries across the
world, including the U.K. and the United States. The December 2006 CPEC Redemption
involved an alleged international transaction through which executives—of British, Italian,
German, and American entities—caused Hellas II, a Luxembourg entity, to raise funds from
investors across the world, and then to distribute those proceeds through wire transfers in the
U.K., Belgium, Luxembourg, and the United States.
While it is evident that, at a minimum, the U.S. has a connection to and an interest in this
dispute, several factors support the conclusion that a local dispute exists in the U.K. For
example, the First Amended Complaint alleges that (i) the signatories to the Redemption
Agreement were located in England and Italy when it was executed; (ii) the initial transfer was
made between English bank accounts and was principally funded from the proceeds of the Sub
Notes, a substantially greater proportion of which was held by U.K. custodians than by
Luxembourg custodians; and (iii) a substantial number of the actions relating to the December
2006 Transaction were taken by entities and individuals located in countries outside
Luxembourg, including the U.K. Hosking III at 576. Moreover, this Court previously held
that—as between New York, Luxembourg and the U.K.—the U.K. had the “greater interest in
having its substantive law govern the Plaintiffs’ claims.” Id. at 575. Perhaps most importantly,
the Hellas II compulsory liquidation proceeding is being conducted in the U.K. court.
In summary, given the international nature of the alleged transaction, there is no “local
dispute” to a single jurisdiction in this case. Rather, this case involves an alleged international
transaction that implicated numerous countries. As between the U.K. and United States, the
interest in having local disputes settled locally weighs in favor of the U.K and especially given
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the U.K.’s greater interest in having its substantive law govern the Plaintiffs’ claims.
Accordingly, an English court would have an inherent and stronger local interest in the matter
than an American court.
ii. 	Difficulties Applying Foreign Law
One of the factors that courts consider in evaluating dismissal based on forum non
conveniens is the applicability of foreign law. In weighing this factor, courts take the numerous
problems associated with the applicability of foreign law into consideration. Ocean Shelf
Trading Inc. v. Flota Mercante Grancolombiana S.A., 638 F. Supp. 249, 253 (S.D.N.Y. 1986).
Forum non conveniens dismissal is appropriate in cases where U.K. law is the primary applied,
where English courts have a stronger local interest in the matter than do American courts, and
where key witnesses may only be available in the alternate forum. See Pollux Holding Ltd. v.
The Chase Manhattan Bank, 329 F.3d 64, 75–76 (2d Cir. 2003). However, it is well-established
that “the need to apply foreign law is not alone sufficient to dismiss under the doctrine of forum
non conveniens.” R. Maganlal & Co., 942 F.2d at 169 (holding that the district court improperly
granted dismissal based on the need to apply Indian law when the primary issue of the case
involved U.S. contract law).
The weight that a court should give to the applicability of foreign law depends on the
facts of the case and the ease of applying foreign law. See Rahl v. Bande, 328 B.R. 387, 405–06
(S.D.N.Y. 2005). American courts are generally equipped to interpret foreign law without
creating a heavy burden on the judicial process. See Nat’l Union Fire Ins. Co. of Pittsburgh v.
BP Amoco P.L.C., 03 Civ. 0200 (GEL), 2003 WL 21180421, at *10 (S.D.N.Y. May 20, 2003).
“Because federal courts must often apply foreign law, and the means of pleading and proving
foreign law are provided in the Federal Rules of Civil Procedure, interpreting the contracts
according to [foreign] law, and instructing a jury on that law if this case should go to trial, are
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not burdens heavy enough to weight the balance of convenience strongly in favor of dismissing
the action.” Id. The ability of U.S. courts to apply foreign law is especially relevant to U.K. law,
which is generally amenable to interpretation by a U.S. court. See Gross v. BBC, 386 F.3d 224,
233–34 (2d Cir. 2004) (“[T]here are few if any countries in the world whose body of law is more
amenable to application in the [U.S.] than Great Britain’s. . . . and we do not believe application
of such law creates a burden on the court.”).
However, when foreign law remains unsettled and could cause significant difficulty in
interpreting the law, this should be a “powerful factor weighing in favor of dismissal.” LaSala v.
UBS, AG, 510 F. Supp. 2d 213, 233–34 (S.D.N.Y. 2007) (dismissing the case when legal experts
disagreed about critical points in the application of Swiss law in addition to other factors that
weighed in favor of dismissal). Difficult conflicts of law in the application of foreign law is a
significant factor that weighs in favor of dismissal. See Stewart v. Adidas A.G., No. 96 CIV.
6670 (DLC), 1997 WL 218431, at *7 (S.D.N.Y. Apr. 30, 1997). This factor is only strengthened
by a U.S. court’s weak interest in adjudicating the claim. Id. In Stewart, apart from the
difficulty of applying unsettled foreign law, the New York court had “very little interest in
adjudicating [the] claims,” and the actions forming the complaint took place largely outside of
the U.S. and involved foreign law. Id. When strong problems with interpreting unsettled foreign
law arise and there is a weak connection to the chosen forum, dismissal for forum non
conveniens may be appropriate.
In this case—while the application of U.K. law alone is not dispositive of the issue and
while this Court is able to interpret U.K. law—there are strong factors that weigh in favor of
dismissal for forum non conveniens. It is preferable to allow the U.K. court to decide a matter of
its own law, especially when the issue would be a matter of first impression. Apart from the
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difficulty of applying unsettled U.K. law, similar to Stewart, this Court has “very little interest in
adjudicating [the U.K.] claim,” and the actions forming the First Amended Complaint largely
took place outside of the United States. Stewart, WL 218431, at *7.
iii. 	Avoiding the Burden on Jurors by Having Them Decide
Cases That Have No Impact on Their Community
When a court has very little interest in adjudicating the claims primarily due to the
removed location of events and the applicability of foreign law, this could create an unnecessary
burden on jurors. Id. In Stewart, the court held that it “would be simply unfair to impose the
burden of service on a New York jury because of the attenuated contact of New York to the
controversy.” Id. The parties did not address this prong of the analysis. If the Plaintiffs’ claims
come to trial in the U.K., the trial will be to the court without a jury, despite the expressed desire
of Plaintiffs and Defendants for a jury trial if the trial is in the United States.
b. 	The Private Factors
i. 	Extensive U.S. Discovery
In analyzing a forum non conveniens motion, the weight given to the extent of discovery
already conducted in the proceedings has not been considered “by the Supreme Court in its
jurisprudence because it does not appear to have been present in [the] cases before it.” Lony v.
E.I. Du Pont de Nemours & Co., 935 F.2d 604, 614 (3d Cir.1991). However, Courts have held
that the extent of discovery is a relevant factor that should be considered when assessing a forum
non conveniens motion. Alfadda v. Fenn, 159 F.3d 41, 48 (2d Cir. 1998) (stating that
“[a]lthough an issue of first impression in this Court, the Third, Fifth, and Tenth Circuits have
concluded that the extent of completed discovery in the American forum is a relevant—but not
necessarily dispositive—consideration in assessing convenience.”); see also 14D CHARLES ALAN
WRIGHT , ARTHUR R. M ILLER, EDWARD H. COOPER, ET AL ., FED. PRAC. & PROC. J URIS. § 3828,
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n.33 (4th ed. 2016) (“When extensive discovery already has occurred in current forum, forum
non conveniens dismissal is less appropriate.”). Importantly, it is arguable that a party may be
“deemed to have waived its right to raise a forum non conveniens defense if it has availed itself
of rights conferred by the New York courts by, for example, engaging in discovery.” 3 Robert L.
Haig, N.Y. PRAC., COM. LITIG. IN NEW YORK STATE COURTS § 20:4 (4th ed. 2015).
The weight that courts will give to this factor varies based on the facts and circumstances
of each case. In Bank of Crete v. Koskotas, the plaintiff, a Greek bank, sued the defendant, a
Greek citizen, in New York and the court denied the defendant’s motion to dismiss for forum
non conveniens. No. 88 Civ. 8412 (KMW), 1991 WL 280714, at *5 (S.D.N.Y. Dec. 20, 1991).
In addition to holding that the defendant failed to establish that Greece was a more convenient
forum, the court highlighted the lateness of the motion and extensive discovery that had already
occurred. Id. The court stated that lateness of the motion and extensive discovery “weigh
heavily against granting the [forum non conveniens] motion.” Id. at *6. Specifically, the court
stated that:
In light of the extensive discovery that had occurred in [the] case . . . the
presumption against dismissal [] is very high. 	This is particularly true
where . . . other issues in the case have been hotly litigated by the parties
in oral arguments and hearings, resulting in the court becoming familiar
with the parties and the substantive issues in the case . . . . [T]he defendant
would have to meet a heavy burden to prevail in [the] forum non
conveniens motion.
Id. at *5.
In Alfadda, the plaintiffs, Saudi investors, sued the defendant, a French bank, in New
York and also in France. Alfadda, 159 F.3d at 43–45. In 1992, the defendants moved for
dismissal for forum non conveniens in the district court. Id. at 45. The court denied the motion
and the parties conducted significant discovery for three years. Id. In 1994, the Tribunal
Correctionnel in Paris acquitted the defendants, and the Court of Appeals for Paris later affirmed
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the acquittal. Id. at 44. Then, in 1996, the defendants again moved to dismiss the case in the
district court on forum non conveniens, and this time, court granted the motion. Id. at 45. On
appeal, the Second Circuit affirmed the lower court’s ruling, asserting that the public and private
interest factors “weigh heavily in favor of France,” and that the extent of discovery and
investment of financial resources, “does not sufficiently tip the scales . . . especially since
plaintiffs are free to use the existing discovery material to whatever extent the French tribunal
will permit.” Id. at 48.
The extent of discovery was again considered in Alnwick v. European Micro Holdings,
29 Fed. Appx. 781, 782 (2d Cir. 2002). There, the plaintiffs, New York residents, chose to sue
European defendants in New York and the district court granted dismissal for forum non
conveniens. Id. On appeal, Second Circuit reversed and remanded, concluding that, “‘whenever
discovery in a case has proceeded substantially so that the parties already have invested much of
the time and resources they will expend before trial, the presumption against dismissal on the
grounds of forum non conveniens greatly increases.’ Accordingly, the [d]istrict [c]ourt should
inquire as to the current, advanced state of discovery and make appropriate findings with respect
thereto.” Id. at 783 (quoting Lony v. E.I. DuPont de Nemours & Co., 935 F.2d 604, 614 (3d
Cir.1991)) (motion denied on remand); accord Bank of Crete, S.A. v. Koskotas, No. 88 Civ. 8412
(KMW), 1991 WL 280714, at *5 (S.D.N.Y. Dec. 20, 1991).
Here, the extent of discovery factor should carry little weight. The Defendants did not
wait for extensive discovery to be conducted before raising the forum non conveniens argument.
Rather, the Defendants previously argued that leave to amend the Complaint to assert U.K. law
claims should be denied based on forum non conveniens; the Court rejected that argument, and
the parties continued taking discovery that had started when only New York law claims were
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asserted in the Complaint. The Plaintiffs then filed the U.K. Action, and the Defendants moved
to dismiss based on forum non conveniens. To date, this Court has only heard and ruled on
preliminary motions and has yet to hear the issues on their merits. Similar to Alfadda, the
Plaintiffs are also free to use the existing discovery material to whatever extent the U.K. court
will permit.
ii. 	The Delay in Bringing the Forum Non Conveniens
Motion
While delay in bringing a forum non conveniens motion is a factor to be considered in the
Court’s evaluation of whether the forum was convenient, there is “no time limit on when a
motion to dismiss on the ground of forum non conveniens can be made.” See Genpharm Inc. v.
Pliva-Lachema a.s., 361 F. Supp. 2d 49, 59 (E.D.N.Y. 2005) (citations omitted); Breindel &
Ferstendig v. Willis Faber & Dumas Ltd., No. 95 CIV. 7905 (SHS), 1996 WL 413727, at *3
(S.D.N.Y. July 24, 1996) (stating that the time constraints established by Fed. R. Civ. P 12(h) are
not applicable to forum non conveniens and do not constitute a waiver of the right to move to
dismiss, but would be considered as a factor in evaluating convenience). Dismissal based on
forum non conveniens may be inappropriate, despite a favorable outcome of weighing the private
and public factors, when defendant raises the issue at a late stage in the action and the parties
have engaged in voluminous discovery prior to such move to dismiss on forum non conveniens.
Bank of Crete, S.A., 1991 WL 280714, at *4–5. As such, “[a] doctrine designed for convenience
and the fair treatment of parties should not be available—by dint of strategic timing—to create
an overwhelmingly burdensome shift of venue for a plaintiff in good faith pursuing costly
litigation in a proper forum.” Id.
The Plaintiffs argue that the Defendants have implicitly conceded the issue of forum non
conveniens by delaying the Forum Non Conveniens Motion “for over 20 months while pursuing
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discovery . . . in this Court.” (Opp’n at 11.) However, this is not a case where the Defendants
unreasonably delayed bringing a forum non conveniens motion in order to take advantage of
voluminous discovery. The Plaintiffs initiated the U.K. Action in December 2015 and it was
only at that time that the U.K. became a viable alternative option. The Defendants filed the
Forum Non Conveniens Motion in January 2016. As such, the Defendants moved to dismiss on
forum non conveniens promptly after the U.K. became a viable alternative option for this action.
The Defendants also tried to previously argue that the First Amended Complaint would
ultimately be dismissed under the doctrine of forum non conveniens. Importantly, although the
Court disagreed with the result at that time, the Court left open the possibility that dismissal on
forum non conveniens grounds could be granted later if “Plaintiffs commenced a similar action in
the [U.K.] . . . .” Hosking III at 593 n.38. Accordingly, this factor weighs in favor of dismissal
on forum non conveniens.
iii. 	Location of Documents and Witnesses
The location of documents and witnesses is an important factor that courts consider in
determining whether to dismiss an action for forum non conveniens. For example, courts take
into consideration the inability to compel critical third-party witnesses to testify in a forum or to
compel the production of documents from third parties. See Reers v. Deutsche Bahn AG, 320 F.
Supp. 2d 140, 162 (S.D.N.Y. 2004). In Fitzgerald v. Texaco, the court held that the U.K.
presence of key witnesses weighed in favor of dismissal. 521 F.2d 448, 451–52 (2d Cir. 1975).
The court in that case evaluated the fact that it, as an American court, had “no power to subpoena
any of [the U.K.] witnesses.” Id. at 451. Moreover, the court considered that it was “unlikely
that many [of the foreign witnesses] would be willing to travel to New York to testify” because
“the cost, in any event, would be prohibitively great [and] [t]hose witnesses who reside in
England are subject to the compulsory process of her courts; and the others, if willing to testify,
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could do so there at reasonable expense.” Id. at 451–52. “[T]here is no fixed tipping point at
which . . . costs become so great as to warrant dismissal. Instead, the Court should apply a
comparative approach that evaluates, on the one hand, the costs that defendant would incur in the
present forum, versus the costs plaintiffs would incur in the foreign forum.” Strategic Value
Master Fund, Ltd. v. Cargill Fin. Servs., Corp., 421 F. Supp. 2d 741, 767 (S.D.N.Y. 2006)
(citing Iragorri, 274 F.3d at 74).
The Defendants argue that (i) the majority of the documents that have been produced
were collected in the U.K.; (ii) fourteen of the eighteen depositions were conducted in the U.K.;
(iii) the majority of the witnesses expected to be called at trial are individuals that reside in the
U.K; and (iv) nearly all of the key witnesses reside and/or work in the U.K. (Forum Non
Conveniens Mot. at 14–16.) In support of their position, the Defendants consent to the use of
fact discovery conducted to date in the U.K. Action. (Id.) In response, the Plaintiffs argue that
the Defendants have failed to establish that the location of documents and witnesses poses a
significant obstacle because (1) the Defendants are sophisticated financial institutions for whom
producing documents or witness poses no special inconvenience and (2) it is unclear whether any
of the witnesses would be unavailable to testify at trial in the United States. (Opp’n at 12–13.)
Given the sophistication of the global institutions involved in the case, this factor is neutral.
Moreover, as detailed below, the Defendants have consented to use all reasonable efforts to
produce for trial in the U.K. Action those U.S.-resident witnesses who are their current or former
employees.
iv. 	Judicial Economy
Numerous courts have found that the “public interest factors often favor dismissal where
there is a parallel litigation arising out of the same or similar facts already pending in the foreign
jurisdiction.” Argus Media Ltd. v. Tradition Fin. Servs. Inc., No. 09 CIV. 7966 (HB), 2009 WL
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5125113, at *6 (S.D.N.Y. Dec. 29, 2009). In this case, it is evident that it would be inefficient
and wasteful for two trials—involving the same claims, involving the same Plaintiffs, regarding
the same transaction and evidence—to go forward.
IV. 	CONCLUSION
Applying the Second Circuit’s three-part test, the Court concludes that (1) the Plaintiffs’
choice of forum should be given little, if any, deference because this case involves foreign
Plaintiffs and the United States is clearly an inconvenient forum; (2) the U.K. is an adequate
alternative forum as it pertains to the named U.S.-Defendants and the named defendant class is
not relevant; and (3) the balancing of the private and public factors weighs in favor of dismissal.
A local dispute does not appear to exist in this case. This Court should avoid interpreting and
applying U.K. law when a U.K. court can do so in the U.K. Action, which challenges the same
transaction and has the same defendants. The Defendants have agreed that U.S.-discovery may
be used in the U.K. Action. But the decision whether or how the U.S.-discovery may be used in
the U.K. Action is, of course, subject the control of the U.K. court, just as it would be subject to
evidence rules and court procedures if the action proceeded in this Court. There is a strong
interest in avoiding parallel trials and possibly conflicting decisions if the two pending cases,
involving the same facts and legal issues, proceed to judgment in the two different courts.
At the Hearing, the Court requested that the Defendants agree that granting the Forum
Non Conveniens Motion would be subject to certain conditions. On July 18, 2016, Plaintiffs’
counsel filed a letter with the Court (ECF Doc. # 314) enumerating certain conditions that they
believed should be required of the Defendants. On July 19, 2016, the Defendants filed a
response to the Plaintiffs’ conditions (the “Defendants’ Letter,” ECF Doc. # 316). The following
conditions represent the “Conditions” that are mandated by this Court, as a prerequisite to the
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stay of this action. By the Defendants’ Letter and verbal responses of Defendants’ counsel at the
Hearing, the Defendants have agreed to all of the Conditions set forth herein:
1. 	All Defendants must agree to consent to the jurisdiction of the U.K. court;
2. 	All Defendants must agree to accept service of process through their counsel and
waive any objections to the manner or validity of service of process;
3. 	Only with respect to the specific claims that are currently asserted against each
Defendant in this adversary proceeding, each Defendant must agree to waive and
not assert any statute of limitations defense(s) not already ripe as of the date each
defendant was named as a defendant in this adversary proceeding;
4. 	All Defendants and their affiliates in the U.K. Action must agree that, subject to
the practice and procedures of the U.K. court, they will not object to the use in the
U.K. Action of all discovery produced in the adversary proceeding, i.e., (a) all
factual discovery, notwithstanding the Confidential Agreement or otherwise, and
(b) all expert reports and discovery;
5. 	All Defendants and their affiliates in the U.K. Action must agree to waive and not
assert any challenges and/or defenses relating to the absence from the U.K. Action
of the putative Transferee Class members; and
6. 	All Defendant and their affiliates in the U.K. Action must agree to use all
reasonable efforts to produce for any trial in the U.K. Action those U.S.-resident
witnesses who are their current or former employees.
For the foregoing reasons, the Forum Non Conveniens Motion is GRANTED. The
adversary proceeding is STAYED on the conditions set forth above.
Plaintiffs’ counsel shall file a written status report with the Court within 14 days after the
Defendants have become respondents in the U.K. Action (or, in separate proceedings, if the U.K.
court requires). (See Judgment, dated 19th July 2016 (ECF Doc. # 323-2, at ¶ 49) (“That raises
the prospect of a significant number of additional respondents to these proceedings or . . . of
separate proceedings, but ones which would ideally in terms of orderly case management be
directed to be heard at the same time as the present proceedings.”).) The status report should
address Defendants compliance with the Conditions set forth above.
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IT IS SO ORDERED.
Dated: 	August 22, 2016
New York, New York
_____Martin Glenn____________
MARTIN GLENN
United States Bankruptcy Judge
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