GENESIS ASIA PACIFIC PTE. LTD. & Anor

Facts

Genesis Asia Pacific Pte Ltd (GAP), a Singapore company, is a wholly-owned subsidiary of Genesis Global Holdco, LLC (Holdco). Holdco and Genesis Global Capital, LLC (GGC) were incorporated in Delaware. The group is involved in cryptocurrency dealings, including lending and borrowing, spot trading, derivatives and custody services. After turmoil in the cryptocurrency market, including the collapse of FTX, the three companies began restructuring proceedings under Chapter 11 of the US Bankruptcy Code. On 26 January 2023 the US Bankruptcy Court for the Southern District of New York authorised GAP to act as foreign representative of all three companies to seek recognition of the Chapter 11 proceedings abroad.

In Originating Applications Nos 400, 402 and 403 of 2023, the companies applied to the General Division of the High Court under the UNCITRAL Model Law on Cross-Border Insolvency, as enacted by s 252 of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA), to have the Chapter 11 proceedings recognised so as to head off enforcement action in Singapore. After the hearing on 6 July 2023 the court recognised the proceedings as foreign main proceedings for Holdco and GGC and as foreign non-main proceedings for GAP, but reserved its decision on whether to recognise GAP's appointment as foreign representative and called for further submissions.

Issues

1. Whether a corporate entity can be recognised as a foreign representative under Art 2(i) of the Model Law.
2. Whether a debtor such as GAP can be its own foreign representative for the purposes of the Model Law.
3. Whether any safeguard was needed to manage the risk of conflict of interest.

Holding

The High Court granted the applications, recognising GAP's appointment as the foreign representative of each of the three companies, subject to a reporting requirement. Directions were to be given for a further hearing to settle the orders, including the terms of the reporting requirements.

Reasoning

The court accepted that Singapore insolvency practitioners must be natural persons, but held that this did not decide who may be a foreign representative. Art 2(i) refers to a person or body, and the Interpretation Act 1965 defines person to include companies and other bodies of persons. Nothing in the Model Law or the IRDA confines the term to individuals, and the foreign representative's functions, mainly applying to the court for assistance, can be performed by a company. Other provisions of the Model Law use persons in a way that must cover corporations, the UNCITRAL 2013 Guide says the definition is broad enough to include debtors in possession, and US decisions had recognised firms and artificial bodies as foreign representatives. The court acknowledged that accountability is harder to fix on an entity than on an individual, but held that close court monitoring could manage that risk.

On the second issue, a debtor acting as its own representative may face a conflict between its own interests and its duty to act for creditors. US decisions and the 2013 Guide showed that the definition was built to include debtors in possession and imposes no requirement of disinterestedness. Singapore's own restructuring regime under the IRDA lets a company keep its management in control while under a moratorium, without an independent officer, so there was no policy reason to refuse a foreign debtor-in-possession arrangement.

To manage the risk of conflict, the court imposed a reporting regime by letter: the foreign representative must periodically update the court on its restructuring and disclose developments affecting, or with a real prospect of affecting, Singapore creditors, so that the court can intervene or withdraw its assistance if needed.

From the judgment