40 KiB
COMMONWEALTH OF THE BAHAMAS
IN THE SUPREME COURT
Commercial Division
2026/COM/com/00018
IN THE MATTER of Part VIIA of the Companies Act, Ch. 308
AND IN THE MATTER OF 1 BANCO MASTER S.A. 2 BANCO LETSBANK S.A 3 BANCO MASTER DE INVESTIMENTO S.A 4 MASTER S/A CORRETORA DE CAMBIO, TITULOS E VALORES MOBILIARIOS 5 BANCO MASTER MULTIPLO S.A.
AND IN THE MATTER OF THE FOREIGN PROCEEDINGS (INTERNATIONAL
CO-OPERATION) LIQIUIDATION RULES, 2012
RULING
Before: The Honorable Mr. Acting Justice Raynard S Rigby KC
Appearances: Mrs. Sophia Rolle-Kapousouzoglou along with Miss Vonisha Rolle of
Lennox Paton for the Petitioner, EFB Regimes Especias de Empresas Ltda.
Hearing Date: 13 May 2026 Recognition of a Foreign Representative
4 of the Foreign Proceedings (International Co-operation) Rules, 2012
(Rule 3 of the Foreign Proceedings (International Co-operation) (Relevant Foreign Countries) Liquidation Rules, 2016 Meaning of “foreign proceeding" in section 253 of the Companies Act “subject to control or supervision by a
Section 254 of the Companies Act Rule
Schedule
Brazil designated
foreign court”
‘relevant’ country’
Meaning of
By a Petition filed on 4 May 2026 the Petitioner, EFB Regimes Especias de Empresas
Ltda., made an application to the Court pursuant to section 254 of the Companies Act to be recognized as a Foreign Representative in The Bahamas with the right to act on behalf or in the name of five entities: 1 Banco Master S.A., 2 Banco Letsbank S.A(3) Banco Master De Investimento S.A, 4 Master S/A Corretora De Cambio, Titulos E Valores
Mobiliarios, and 5 Banco Master Multiplo S.A.
The application is supported by the following evidence: 1 Verifying Affidavit of Eduardo Felix Bianchini filed on 5 May 2026, 2 the Affidavit of Foreign Law of Henrique Rodriques
Forssell filed on 5 May 2026 as well as his Second Affidavit filed on 15 May 2026; and
3 the Affidavit of Keath Smith filed on 8 May 2026.
HELD: Granting the application by the Petitioner to be recognized as a Foreign
Representative pursuant to Section 254(1)(a) of the Companies Act.
Introduction
- This is a ruling on an application before the Court for the Petitioner, EFB Regimes
Especias de Empresas Ltda., to be recognized as a Foreign Representative in The
Bahamas with the right to act on behalf or in the name of five entities: 1 Banco
Master S.A., 2 Banco Letsbank S.A(3) Banco Master De Investimento S.A, 4
Master S/A Corretora De Cambio, Titulos E Valores Mobiliarios, and 5 Banco Master Multiplo S.A. (“the Banco Master Entities”).
The application is supported by the Verifying Affidavit of Eduardo Felix Bianchini and the Affidavit of Foreign Law of Henrique Rodriques Forssell both filed on 5 May 2026. The Affidavit of Keath Smith filed on 8 May 2026 also aids the application.
On 13 May 2026, the matter came before the Court and the Court directed that a
further or supplemental affidavit of law be filed. The Second Affidavit of Henrique
Forssell was filed on 15 May 2026.
For the reasons which will be outlined below, | hereby grant the application for EFB Regimes Especias de Empresas Ltda. to be recognized as a Foreign Representative
pursuant to section 254(1)(a) of the Companies Act (“Act”).
Factual Background
- On 18 November 2025 the Central Bank of Brazil (‘CBB”) placed Banco Master S.A into liquidation and appointed EFB Regimes Especias de Empresas Ltda. (‘EFB”) as Liquidator. On the same date, three 3 additional entities: 1 Banco Master De Investimento S.A, 2 Banco Letsbank S.A and 3 Master S/A Corretora De Cambio, Titulos E Valores Mobiliarios were declared to be placed in “extrajudicial liquidation” by the CBB. The other company, Banco Master Multiplo S.A., was placed in
extrajudicial liquidation on 17 March 2026.
Banco Master S.A. began operations in Brazil in 1974 under the name Maxima Corretora De Titulos e Valores Mobiliarios. In 1990 it obtained permission from the CBB to operate as a financial institution under the name of Banco Maxima. The
entity experienced financial challenges around the 2000s and arising from the
disqualification of its founders and administrators due to serious violations of
banking and financial regulations, the ownership of the entity was transferred to Daniel Bueno Vorcaro. It appears that Mr. Vorcario had some success but around
2025 matters emerged that led to an investigation by CBB and questions were raised
as to the use of the capital contributions by investors and depositors of the Banco Master Entities.
As may be gleaned from the evidence filed in these proceedings, Banco Master S.A.
ran into financial challenges and its majority shareholder, Daniel Bueno Vorcaro is
suspected of having misapplied the assets of the Banco Master entities. | highlight
paragraphs 6 to 11 of the Affidavit of Eduardo Feliz Bianchini:
- Due to the findings of fact
Investigation,
controllers, and administrators result of serious violations
financial regulations.
controllers transferred majority of the shares of Banco Maxima to Mr. Bueno Vocaro (“Mr Vocaro”) who sought to restructure and revitalize the financial institution. Mr. Vocaro served as the President of Banco shareholder.
arising from the Central
Banco Maxima’s founders,
were disqualified as a of pertinent banking and In 2018, these disqualified control and ownership of a
Daniel
Master and is its majority
- After the Central Bank authorized Mr. Vocaro’s
assumption of control of the bank, Mr. Vocaro began to put his restructuring plan into place. First, Mr Vocaro
changed Banco Maxima’s operational focus and its
corporate name to Banco Master, S.A. Second, Mr.
Vocaro sought to capitalize Banco Master by engaging in a fundraising process whereby investors contributed
capital in exchange for bank deposit certificates (the returns. Mr Vocaro’s restructuring plan appeared to be
“Bank Deposit Certificates”) with above-market, inflated
quite successful, so much so that throughout 2023 and
2024, Banco Master registered record financial results.
- This apparent success evaporated in 2025, after a series of attempts to buy and sell control of Banco Master revealed irregularities in the destination of the investors’ and depositors’ contributed funds. The Central Bank of Brazil initiated a series of investigations which raised
serious questions relating to the application and use of the contributions of capital made by investors and depositors of Banco Master and its affiliates. These
investigations reportedly conclude that at least part of
the capital contributed by investors and depositors of the bank had been illicitly dissipated from Banco Master.
- The Central Bank’s investigations caused an avalanche of news stories in various national and foreign media
outlets, which began to link Mr Vocaro’s life of luxury and extravagances, including the acquisition of properties
and assets in foreign jurisdictions, with potential frauds committed to the detriment of Banco Master's depositors and investors in its Bank Deposit Certificates.
- Based on the Liquidator’s preliminary investigation
into the causes of the failure of Banco Master completed
to date, it is tolerably clear that Mr. Vocaro and others
have misappropriated at least US$1 billion of assets from Banco Master by means of (a) the purchase by Banco Master of financial assets at falsely inflated prices from non-arm’s length sellers, and (b) the making of loans by Banco Master on the basis of falsely inflated collateral to non-arm’s length borrowers.
- On 18 November 2025, Mr Vocaro was arrested by officers of the Federal Police of Brazil at Guarulhos International Airport in Sao Paulo while reportedly on his way to board a private jet headed to Dubai, UAE. This arrest was based on allegations of, in part, the sale by Banco Master S.A. of fraudulently over-valued securities to BRB Banco de Brasilia S.A. (“BRB Banco”) in
exchange for R$12 billion. Mr. Vocaro was bailed on 28
November 2025 subject to certain conditions. On 4 March 2026, he was re-arrested based on, in part, allegations of fraud on Banco Master S.A., bribery, money laundering and threatening violence to certain witnesses and a
journalist. Mr. Vocaro remains in custody during the
pendency of the criminal case that has been brought
against him.
- note the terms of the several Notices issued by the CBB which consequently froze assets of several controlling shareholders and the former administrators of the Banco Master Entities, inclusive of Daniel Bueno Vorcaro.
- The Affidavit of Eduardo Feliz Bianchini also sets out the interests held by the Banco Master Entities in The Bahamas, which includes interest in Liquidity Strategies Fund Ltd., Phoenix Multimarket Fund Ltd., Faex Fund Ltd., PMLS Ltd., Octa Investments Ltd., Sunshine Company Ltd., Golden Star Investment Fund Ltd., Artress Ltd and Mosaic Financial Ltd.
Recognition of a Foreign Representative
- Sections 253 to 255 of the Companies Act set out the material provisions governing the recognition of a foreign representative in The Bahamas. The sections note as follows:
“253. In this Part — "debtor" means a foreign corporation or other foreign
legal entity subject to a foreign proceeding in the country
in which it is incorporated or established;
"foreign proceeding” means a judicial or administrative proceeding in a relevant foreign country, including an
interim proceeding, pursuant to a law relating to
or insolvency in which proceeding the property and affairs of the debtor are subject to control
by a foreign court, for the purpose of reorganisation, rehabilitation, liquidation or bankruptcy
of an insolvent debtor;
“foreign representative” means a trustee, liquidator or
other official appointed in respect of a debtor for the
purposes of a foreign proceeding;
"relevant foreign country” means a country, territory, or jurisdiction designated as a relevant foreign country in rules made under section 252 by the Liquidation Rules Committee for the purposes of this Part.
- 1 Upon the application of a foreign representative
the court may make orders ancillary to a foreign proceeding for the purposes of
(a) recognising the right of a foreign representative to act
in The Bahamas on behalf of or in the name of a debtor and, in the court's discretion, to do so jointly with a
qualified insolvency practitioner; (b) enjoining the commencement or staying the (c) staying the enforcement of any judgment against a
continuation of legal proceedings against a debtor;
debtor;
(d) requiring a person in possession of information relating to the business or affairs of a debtor to be examined by and produce documents to its foreign
representative;
(e) ordering the turnover to a foreign representative of any property belonging to a debtor; and (f) granting such other relief as it considers appropriate.
2 An ancillary order may only be made under subsection against- (a) the debtor itself; or
(b) a person who was or is a relevant person as defined in section 198(1).
3 An ancillary order shall not affect the right of a secured creditor to take possession of and realize or
otherwise deal with property of the debtor over which the
creditor has a security interest.
4 The court shall not make an ancillary order that is
contrary to the public policy of The Bahamas.
- 1 In determining whether to make an ancillary order under section 254, the court shall be guided by matters which will best assure an economic and expeditious administration of the debtor's estate, consistent with (a) the just treatment of all holders of claims against or
interests in a debtor's estate wherever they may be
domiciled;
(b) the protection of claim holders in The Bahamas
against prejudice and inconvenience in the processing of
claims in the foreign proceeding;
| (c) | the | prevention | of | preferential dispositions of property comprised in the debtor's estate; | or | fraudulent |
|---|---|---|---|---|---|---|
| (d) the | distribution creditors substantially | of the in | debtor's estate | accordance with the order | amongst |
prescribed by Part VII; (e) the recognition and enforcement of security interests
created by the debtor; (f) the non-enforcement of foreign taxes, fines and
penalties; and (g) comity.
2 In the case of a debtor which is registered under
section 174, the court shall not make an ancillary order under section 254 without also considering whether it should make a winding up order under Part Vll in respect of its local branch.”
- The procedure for making an application pursuant to section 254(1)(a) of the Act is
set out in Rule 4 of the Foreign Proceedings (International Co-operation) Rules 2012 (“FPICR”) which provides as follows:
“4. Application for declaratory order.
1 An application by a foreign representative made under
section 254(1Xa) of the Act for a declaratory order
recognizing his right to act on behalf of a debtor shall be
made by petition in accordance with RSC Order 9.
2 A petition presented under this rule is required to be
served only on such persons as the Court may direct.
3 A petition under this rule shall state
(a) particulars of the debtor's incorporation;
(b) the nature and place of the debtor's business;
(c) the court or other authority by which the foreign representative was appointed; (d) the powers and duties of the foreign representative under the law of the place of his appointment; and (e) the
reasons for seeking a declaratory order.
4 A petition under this rule shall be verified by an
affidavit sworn by the foreign representative.
5 A certified copy of the order of the court or other
authority by which the foreign representative was appointed shall be exhibited to the verifying affidavit.
6 A petition under this rule shall be supported by an
affidavit of foreign law which explains the powers and duties of the foreign representative under the law of the
place of his appointment. 7 A declaratory order granted under this rule shall be in
Form 1 and shall be gazette”.
- | understand that | must decide whether these proceedings, the subject of the
present application, fulfills the criteria for recognition under the Companies Act and
the relevant Rules. It is question of Bahamian law, the forum of the present
a
application. There elements of foreign law that must be considered on the
are
present application. Under our jurisprudence, questions of foreign law are
questions of fact to be decided on the evidence before the Court. In this regard | have the good fortune of the affidavits of foreign law filed in these proceedings.
- Additionally, | note that Part VIIA of the Companies Act is a product of an
international convention.
- | am satisfied that the present Petition and the filed Affidavits comply with section
4 of the FPICR.
- I note further that Brazil is listed in the Schedule of Designated Relevant Foreign
Countries of the Foreign Proceedings (International Co-operation) (Relevant Foreign Countries) Liquidation Rules 2016.
- | had to consider whether the proceedings in Brazil satisfied the definition of
“foreign proceedings” under section 253 of the Act. The definition requires “...
the property and affairs of the debtor are subject to control or supervision
by a foreign court, for the purpose of reorganisation, rehabilitation, liquidation or bankruptcy of an insolvent debtor”. This issue arose based on
the statements set out at paragraphs 8, 9, 10, 11, 12, 13 and 14 of the Affidavit of
Henrique Forssell. | set out those paragraphs below:
- Article 34 of the 1974 Law provides that the provisions of
the Brazilian bankruptcy law apply extra-judicial liquidations,
where applicable and not inconsistent with that law, with the
liquidator performing the role of a trustee and the Central
Bank of Brazil acting in the role of the bankruptcy judge.”
- The Central Bank may extend the declared extrajudicial liquidation of a financial institution to another company with “integrated activities or common interests” which the 1974
Law defines in Article 51 as “...when the legal entities mentioned in this article are debtors of the entity under intervention or extrajudicial liquidation, or when their partners or shareholders participate in its capital of more than 10% (ten
percent)[]"
- The liquidation process is a collective insolvency
proceeding in nature. It is designed to collect, assess and
resolve claims against the relevant debtor(s), and to realise
assets and make distributions to creditors. It is directed to the administration of an insolvent estate and the treatment of creditor claims generally, rather than the enforcement of individual claims.
- The 1974 Law assigns the Central Bank a supervisory role over the liquidation and the liquidator’s acts, including through administrative review mechanisms. Key decisions taken
during the liquidation, including those affecting creditor
claims, asset realization, and distribution, remain subject to the Central Bank's administrative review and control. For
example, Article 30 provides (as a general rule) for
administrative appeals against a liquidator's decisions to be
taken to the Central Bank, without suspensive effect, within
the statutory timeframe. Furthermore, Article 33 requires a
liquidator to report and render accounts to the Central Bank
whenever he leaves office or whenever requested.
- This supervisory framework reflects the 1974 Law's core
design: extrajudicial liquidation is an administrative proceeding under the Central Bank's authority, not a judicial Central Bank's roe encompasses initiating the regime, appointing and overseeing the liquidator and supervising the
execution of liquidation acts. | have been informed by our
attorneys in The Bahamas, Lennox Patton, that in that
jurisdiction “foreign proceeding” means a judicial or
administrative proceeding in a relevant foreign country, including an interim proceeding, pursuant to a law relating to
liquidation or insolvency in which the property and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganization, rehabilitation, liquidation or bankruptcy of an insolvent debtor.” | verily
believe that there is sufficient control or supervision by the
Brazilian court over the extrajudicial liquidation as an
administrative proceeding to fall within the definition for the reasons set out below.
- Firstly, a liquidator's acts are ultimately subject to judicial
review under Article 5, XXXV of the Brazilian Constitution (i.e. access to the Judiciary for any injury or threat to a right). This
is a general constitutional safeguard applicable to
administrative acts broadly (including administrative acts by
the Central Bank); it does not replace or convert the Central
Bank's statutory supervision into “judicial review” nor does it shift supervision of the liquidation from the Central Bank to the state courts. Secondly, administrative acts relating to
extrajudicial liquidation may fall within the jurisdiction of
Brazil's state or federal courts, depending on the respondent and the relief sought.
- As a practical matter, challenges directed at the Central
Bank (including those that seek to affect the liquidation decree itself or the legality of Central Bank decisions) fall under the
jurisdiction of the Federal Courts pursuant to Article 109, | of
the Federal Constitution (because the Central Bank is a federal autonomous entity). Also, because a liquidator acts as an agent of the Central Bank within this regime, there are
judicial precedents to the effect that challenges to certain
liquidator acts may also be heard by the Federal Courts when framed as actions against the Central Bank/ its agent.
The Second Affidavit of Mr. Henrique Forssell added further clarity to the debtor being subject to the control or supervision of the Brazilian court. | highlight the
salient points which are addressed at paragraphs 8, 9, 17, 18, 19, 20 and 21 of the Second Affidavit:
- My supplemental evidence set out below seeks to support the proposition that the Banco Master liquidation proceedings in Brazil fall under the “control or supervision” of (a) certain
courts in Brazil regarding a designated list of activities,
functions or remedial acts relevant to the administration of the
Estate and/or as an appellate Court, and (b) the Central Bank
of Brazil acting in a manner “equal to” or the same as a
Brazilian Bankruptcy Judge regarding certain other activities,
functions or remedial acts associated with the administration of the Estate. In short, | seek to set out a detailed explanation for why, a matter of Brazilian law and in respect of all aspects of the administration of the Estate, a “Court” or a “Judge” in Brazil either controls or supervises the activities of the
Liquidator.
- Under Brazilian uto the
administration of the Banco Master Estate, the powers
associated with the supervision or adjudication over the activities and conduct of the Liquidator or other
interested parties have been separated between (a) in_Sao Paulo; the Federal Courts of Brazil; and State Courts): and (b) the Central Bank of Brazil operating in its capacity as the “equivalent” of a Bankruptcy Judge.
Pe
- Therefore, a more accurate English language translation of Article 34 of Brazilian Law 6,024/1974 would be as follows:
“Article 34. The provisions of the Bankruptcy Law
(Decree-Law No. 7,661 of June 21, 1945 shall apply to extrajudicial liquidations to the extent applicable and
insofar as they do not conflict with the provisions of this
Law, with the liquidator being treated as the equivalent of
a bankruptcy trustee, and the Central Bank of Brazil
being treated as equivalent to a bankruptcy judge. The judge who would have jurisdiction to process and
adjudicate the bankruptcy of the institution under liquidation shall have jurisdiction over avoidance actions
[meaning claw-back claims] provided for in Article 55 of
that Decree-Law. [Note: The Judge who has jurisdiction to adjudicate claw-back claims is the Judge of the
Bankruptcy Court assigned to a particular case like Banco
Master. In the case of Banco Master this is in fact Judge Alder Batista Oliveira Nobre of the 3 Bankruptcy and Reorganization Court of the Court of Civil Justice of the State of Sao Paulo].
- To restate, when the relevant portion of Article 34 is
translated accurately from the Portuguese into the English language, the Brazilian statutory law has explicitly conferred
upon the Central Bank of Brazil the authority to act as the
equivalent of a Bankruptcy Court Judge for purposes of exercising its supervisory functions and role over the activities
and conduct of the liquidator.
- Also it is important for this Court to understand that
the power to supervise or control the administration of
1"
the Banco Master Estate as embodied in the activities of
the Liquidator, or to make Orders and Decisions at first
instance or as an appellate court, have been separated between (a) traditional courts (as in the Bankruptcy
Court, the Federal Court and State Courts in Brazil), and (b) the Central Bank by means of a menu of powers or
forms of supervisory or adjunctive authority as defined
by statutory law, and as the table exhibited at pages 1-2 shows. Examples of orders of the Bankruptcy Court in Brazil
made thus far in the proceedings granting relief and/or supervising elements of the activites of the administration of the Banco Master Estate
- Example No. 1. Exhibited to this Affidavit at pages 3 to § is a copy of an Order in Portuguese issued at March 2026 by Bankruptcy Court Judge Adler Batista Oliveira Nobre of the
Reorganization of the Central
Paulo (the “Bankruptcy Court”). At pages 6-10 is an official English translation of the Order. This Order was granted the petition of the five banks Banco Master
proceedings. Under this proceedings in Bankruptcy Court register certain pre-cautionary notices over the title to assets held by Pipe Participacoes expected to be made the subject of a prospective claw-back
or fraudulent transfer avoidance claim to be Estate.
5.31 pm on 17
Third Court of Bankruptcy and Judicial Civil Court of the State of Sao on
or companies that make up the
Estate the same Claimants to these
Order made in the foreign main
Brazil (the “Foreign Proceedings”), the
in Sao Paulo authorized the Estate to
Ltda and others which are
brought by the
| 21. | Under | Article | 34 | of | Law | No. | 6,024/1974, | the | Bankruptcy |
|---|---|---|---|---|---|---|---|---|---|
| Court | is | the | Court | that | will contemplated fraudulent transfer avoidance (or claw-back) | have | to | adjudicate | the |
| claim. | In the | translation) at pages 6-10 the Bankruptcy Court cited to | Order exhibited to this affidavit (English |
Article 34 as the jurisdictional basis for conferring the power
on the Court to adjudicate such contemplated claw-back
claim.
- | note that in Atelier Design e Planejamento de Moveis Ltda & Ors
2021/COM/com/00063 the Court recognized Fernando Celso De Aquino Chad as
foreign representative for the purposes of acting in The Bahamas on behalf of or
a
in the of the Millo Group of Companies. In that instance, Mr. Chad was
name
appointed by the Brazilian Court. In the ruling, Senior Justice Indra Charles (as she then was) stated:
6 As | understand it, under Brazilian law, judicial reorganization is the main rescue procedure in Brazil for
a company to restructure its business and debt. It is similar in its effect to Chapter 11 bankruptcy proceedings in the United States of America.
7 On 16 November 2017, Judge Rodrigo Gorga Campos (“Judge Campos”) granted the Order for judicial reorganization of the Millo Group and appointed Mr. Chad
as the judicial administrator. On 21 November 2017, Mr. Chad executed a judicial administrator's commitment
agreement in acceptance of the appointment. On 21
November 2018, Judge Campos determined that the Millo
Group did not comply with the judicial determinations for regular processing of the judicial reorganization and that
the companies demonstrated a total absence of
commercial activity. As a result, Judge Campos ruled that
the judicial reorganization be converted to a full court
supervised bankruptcy. Mr. Chad maintained his position
as the judicial administrator.
- The distinction in the present application is that the Petitioner, EFB, was not
appointed by the Brazilian Court but by the Central Bank of Brazil. Additionally, the
liquidator is a trustee and the Central Bank of Brazil acts as a bankruptcy judge (see paragraph 16 above). | have to consider if the role of the Central Bank of
Brazil as the bankruptcy judge renders the application foul of the meaning of “foreign proceedings” in section 253 of the Act.
- In_the matter of Caledonian Bank Limited (in Official under Supervision of The Grand Court of The Cayman Islands)
2015/COM/com/00034, Acting Justice Brian Moree KC J (as he then was) refused
the application for recognition in The Bahamas of the liquidators of Caledonian
Bank (in official liquidation under the supervision of the Grand Court of the Cayman Islands). His reasoning was principally set out at paragraph 23 of his decision:
“... the Cayman Proceedings nor the Cayman Liquidators
(“the Petitioners”) fall within the
such terms in section 253. Accordingly, regime under sections 253 256 is not currently available
to the Petitioners as the Cayman Islands has not been designated a relevant foreign country by the Rules Committee for the purposes of Part VIIA.
the Cayman “foreign proceedings” within the definition of that term in
section 253 of the Bahamian Act...”
statutory definition of the statutory
Liquidation
On the
...
Proceedings are not
- The instant application is distinguishable from the central feature in Caledonian Bank Limited. | am satisfied that EFB meets the requirements under the Act and the FPICR. | am also satisfied based on the evidence before me that the liquidation bankruptcy proceedings in Brazil are rooted in the principles of collectivism; that
or
is, EFB will realize and collect assets and make equitable distributions to creditors. It also appears evident that the statutory powers of EFB in Brazil as set out and
explained in the Affidavits of Foreign Law are similar to the powers and functions
of a liquidator under section 205 and the Fourth Schedule of the Bahamian
Companies Act.
- On the discreet issue, | am also satisfied that the role of the CBB as the judge” will not and does not shut out debtors, creditors and others in
Brazil from seeking relief from the Brazilian Court. That is, the Courts in Brazil, the
Bankruptcy Courts, Federal Courts and State Courts, maintain supervisory control
over the liquidator and the debtors and the proceedings relating to the liquidation process. This is fully addressed and ventilated in the Second Affidavit of foreign law of Henrique Forssell (see paragraph 17 above). The rationale of the decision
in Atelier Design e Planejamento de Moveis Ltda also informs my finding.
- | am fortified in this view and conclusion because the definition of “foreign
proceedings” in section 253 does not invoke the words “exclusive jurisdiction”
with reference to the “control or supervision by a foreign court”. | construe the
language in the section to require that the debtor must have a right of access to
the foreign court for “the purpose of reorganisation, rehabilitation, liquidation or bankruptcy of an insolvent debtor”. Given the words employed in the section, it is my view that Parliament intended that once the debtor can avail himself of various relief and remedies before the foreign court and the foreign court's function
is to control or supervise the liquidation of the insolvent debtor, the objects of the
Act are satisfied. This follows from my reading of the Second Affidavit of Henrique
Forssell (see paragraph 17 above).
24. Additionally, the definition also requires the collective proceedings to be judicial
administrative ...”. The fact that the CBB is likely to have
or very some
administrative or quasi-judicial function, in my view, does not take it out of the definition under section 253 of the Act.
- | was also assisted in my view by having regard to the Model Law on Cross- Border Insolvency adopted by the United Nations Commission on International Trade Law in 1997. | do not deem the Model Law to be either
persuasive or binding, but | refer to it only to aid the likely intent of the law; primarily
because the definition of “foreign is materially similar to that in the Bahamian Act. The “Digest of Case Law on the UNCITRAL Model Law on Cross-
Border Insolvency” (circa February 2021 highlights the following paragraphs on
the definition, which | find to be helpful.
- The GEI? [para. 74 notes that the MLCBI specifies
neither the level of control or supervision required to satisfy this aspect of the definition nor the time at which
that control or supervision should arise. The GEI indicates that although it is intended that the control or
supervision required under article 2, subparagraph (a),
should be formal in nature, it may be potential rather than actual. The JP [paras. 84-90 also discusses this
requirement.
- Courts have indicated that control or supervision may
be exercised not only directly by the court, but also indirectly by an insolvency representative where, for example, the insolvency representative itself is subject to control or supervision by the court or other regulatory authority. The GE! [para. 74 suggests that mere supervision of an insolvency representative by a licensing authority would not be sufficient.
! “Foreign proceeding” means a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject
to control or supervision by foreign court, for the purpose of reorganization or liquidation;
a
2 Guide to Enactment and Interpretation of the UNCITRAL MLCBI, as revised and adopted by the Commission on 18 July 2013
- Courts have indicated that the requirement for control
and supervision can be met in a variety of situations in
which the courts do not direct the day-to-day operations of the debtor, including where liquidators can proceed with their duties largely without court involvement; where the relevant law gives the court various control and
supervisory roles with respect to liquidation proceedings; where the court may ultimately become
involved because the debtor is found to be insolvent and
the nature of the proceeding has to change; and where
the debtor retains some measure of control over its
assets, albeit under court supervision, such as a debtor
in possession. Cases involving judicial management by a
court on regulatory grounds, for example pursuant to
insurance regulations, and judicial winding-up on just and equitable grounds, have been found to satisfy this
requirement of article 2. It has also been suggested that
if it could be concluded that overall a proceeding was
subject to the control and supervision of the court, it was
irrelevant that the Government of the originating State also had powers in relation to the proceeding. In a case
concerning the insolvency of an insurance company, the recognizing court found that the body with oversight of the insurance industry was a body competent to control or supervise the assets and affairs of the debtor.
- In Re Agrokor DD 2018 2 BCLC 75 the Business and Property Court of England and Wales considered the application of Ante Ramljak, to be recognized as the
foreign representative of Agrokor DD, a company incorporated in Croatia, for
recognition in Great Britain under the Cross-Border Insolvency Regulations 2006,
Sl 2006/1030 of extraordinary administration proceedings being undertaken in Law on Extraordinary Administration Proceeding in Companies of Systemic Importance for the Republic of Croatia passed by the Croatian Parliament on 6 April 2017. The application was opposed by Sberbank, a Russian bank which was
a creditor of the company. In the course of the decision, Judge Paul Matthews made the following helpful statements on the definition of “foreign proceedings”
and more particularly “subject to the control or supervision of the court”:
78 In order to qualify as a foreign proceeding under the
CBIR [Cross-Border Insolvency Regulations 2006], that
proceeding must be such that assets and affairs of the debtor are subject to control or supervision by a foreign court. The applicant says that the Croatian
proceeding satisfies this requirement, whereas the respondent says it does not.
79 In the Guide to Enactment, there is the following
discussion of this criterion:
‘The Model Law specifies neither the level of control or
supervision required to satisfy this aspect of the
definition nor the time at which that control or
supervision should arise. Although it is intended that the
control or supervision required under subparagraph (a) should be formal in nature, it may be potential rather than actual. As noted in paragraph 71, a proceeding in which the debtor retains some measure of control over its
assets, albeit under court supervision, such as a debtor in possession would satisfy this requirement. Control or supervision may be exercised not only directly by the court and also by an insolvency representative where, for example, the insolvency representative is subject to control or supervision by the court. Mere supervision of an insolvency representative by a licensing authority
would not be sufficient.’
From this it is clear that the control or supervision required can not only be potential rather than actual, but can also be indirect rather than direct.
80 In the American case of Re Ashapura Minechem Ltd
2012 480 BR 129, a foreign representative of company successfully petitioned insolvency proceedings
company in India as a foreign main proceeding, and the Bankruptcy Court granted
| enforcing | a | creditor's | arbitration |
|---|---|---|---|
| company. | The | creditor | appealed, but the |
an Indian
for recognition of started voluntarily by the
a stay against an order
award against the
appeal failed.
One of the points dealt with by the court was whether the
company's assets and affairs were subject to the control or supervision of a foreign court.
81 The US District Court hearing the appeal said (at p 138):
‘Supervision or control of the company's affairs is not a
demanding standard. The foreign court need not control
the day-to-day operations of the debtor. It is sufficient, for
instance, that the body monitor compliance with the repayment plan negotiated between the debtor and
creditors. One court has held that the mere fact that a
commission was granted authority from a Spanish court distribution to creditors “plainly demonstrate[d] that the [court] maintains control of [both the debtor's] assets and
affairs.” By contrast, the fact that actions in a foreign court related to the proceeding are typically initiated by interested parties and that liquidators proceed with most of their duties without court involvement was found “not to] undermine the court]'s] supervisory role”.
...
82 Having considered the facts in the case, the court
concluded (at p 144):
‘Given the low legal standard for supervision over a
debtor's affairs, | conclude that Ashapura did meet its
burden of proving that the BIFR had supervision or
control over Ashapura's affairs and assets.’
- | fully agree with the “threshold” test set out in Re Agrokor and was guided by it in
arriving at my decision on the discreet issue.
- | have no reason to conclude that the debtors, the Banco Master Entities, or any creditors, will not have direct access to the Brazilian courts to seek any redress in the liquidation proceedings. The supervisory function of the Brazilian courts appears in my view to not be disturbed or diminished by the role played by the CBB in an administrative capacity. It is clear to me on the evidence that the Brazilian courts have actual control over the proceedings. The contents of the
Second Affidavit of Henrique Forssell (see paragraph 17 above) shows that the administrative role of the CBB does not override the jurisdiction of the Brazilian courts in the liquidation proceedings. The Brazilian courts can hear and determine
disputes in the liquidation/bankruptcy and thereby it is a logical conclusion that the courts in Brazil have control and supervision of the proceedings for the purposes
of section 254 of the Act.
- | am also guided by section 255(1)(g) of the Act. Comity mandates that the Bahamian courts recognize and enforce the judicial acts of other jurisdictions
where such jurisdictions have assumed primary jurisdiction over liquidation
proceedings on a basis consistent with principles applicable under Bahamian law. Comity is important in cross-border proceedings to avoid proceedings.
Those principles that | highlight for this application are the right of Bahamian
a
liquidator to make decisions without the sanction of the Bahamian court. This right
in no way undermines the control and supervision of the Bahamian court of the liquidation proceedings. | find that the role of the CBB serving as a bankruptcy judge will not limit access to the Brazilian courts.
l also find that there are no compelling public policy exceptions to deny the request.
Conclusion
For all of the reasons set out above, the Court exercises its discretion under section
254 of the Act in recognizing EFB Regimes Especias de Empresas Ltda. as a Foreign Representative in The Bahamas for the purposes of acting on behalf of or
in the name of the Banco Master Entities.
DATED this 26 day of May 2026
(ds
a Ah
Raynard
Acting Justice