In a matter of first impression, the Bankruptcy Court for the Southern District of New York (the “Court”) in In re Fairfield Sentry Ltd. was confronted with the issue of whether the tolling provisions of section 108 of the Bankruptcy Code (the “Code”) are automatically available to Foreign Representatives in chapter 15 cases. As written, section 108(a) of the Code gives trustees, rather than Foreign Representatives, a minimum two-year extension from when the order for relief is entered to commence claims in the interest of the debtor’s estate. However, in In re Fairfield Sentry Ltd., the Court looked to relevant sections of the Code and the Model Law on Cross-Border Insolvency4 (the “Model Law”), as well as extant case law, to hold that Foreign Representatives in chapter 15 cases are also entitled to section 108’s tolling provisions.
To appreciate the effect In re Fairfield Sentry Ltd. may have on chapter 15 cases, one must first understand the relevant terminology and procedures of chapter 15. Therefore, Part I of this memorandum will give a brief overview of the provisions of chapter 15 relevant to In re Fairfield Sentry Ltd. Next, Part II will explain the facts and procedural posture of the case, while Part III will identify six reasons supporting the Court’s holding and rationale. Finally, Part IV will explore some policy implications and practical considerations resulting from In re Fairfield Sentry Ltd.