Krys Speaks to NYU Law School Students

Business BVI–Local insolvency practitioner Kenneth M. Krys provided law students at New York University Law School with a foreign representative‟s perspective on Chapter 15 of the US Bankruptcy Code and the US Bankruptcy Court‟s interpretation of the UNCITRAL Model Law, with specific insight into two of the leading cases, SPhinX and Fairfield.

Krys, who recently participated in a Bankruptcy Litigation Roundtable presented by the Institutional Investor Educational Foundation, was invited by the roundtable moderator, retired Chief Judge Arthur Joseph Gonzalez, who now teaches, to share with NYU law students his “foreign” experience with the U.S. bankruptcy laws and the issue liquidators in offshore financial centers have in obtaining recognition pursuant to Chapter 15 of the US Bankruptcy Code.

“I was honored to be invited to NYU to provide first hand insight into my experiences in seeking Chapter 15 recognition”, says Mr. Krys, founder and CEO of KRyS Global. “Our firm has been involved in two of the most often quoted cases in Chapter 15 and I was pleased to be able to share the dynamics I had to address when making those applications.”

SPhinX, a hedge fund group suffered heavy losses in excess of $263 million and was the first Chapter 15 application opposed under the U.S. Bankruptcy Code. The application was made in August 2006, one year after Chapter 15 had been enacted, and Krys was successful in getting foreign non-main recognition. Part of the debate was whether the liquidators were acting in bad faith when seeking the Chapter 15 in attempting to set aside a preference
settlement executed before their appointment. In 2007 applications by liquidators of Bear Stearns and Basis Yield failed to get any recognition in the United States. Then in 2010 the liquidators of Fairfield Sentry, a fund liquidated in proceedings in the British Virgin Islands, sought bankruptcy protection in the U.S. under Chapter 15. The liquidators were successful in getting foreign main recognition. The order approving recognition gave further clarity to what was necessary, to demonstrate that the center of main interest was outside the U.S.

Having Mr. Krys speak to the NYU law students was a special event for the students. “My class in Cross-Border Insolvency at NYU School of Law was thrilled today to have the opportunity to discuss cross-border issues with a person who has played a significant role in cross-border litigation”, said the former judge, “These cases have been at the center of the interpretation of the principles of recognition under Chapter 15 of the United States Bankruptcy Code”.

Krys is a Chartered Accountant, Chartered Financial Analyst, Certified Fraud Examiner, Certified Anti-Money Laundering Specialist, Certified Specialist in Asset Recovery and Chartered Business Valuator. He serves on the American Bankruptcy Institute‟s Caribbean Insolvency Symposium Board of Advisors and is a member of INSOL International, The International Association for Asset Recovery, and the Restructuring and Insolvency Specialist Association (BVI) Limited.