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Case 18-1374, Document 69, 11/13/2018, 2432558, Page1 of 69

18-1374
United States Court of Appeals
for the
Second Circuit


IN RE: OCEAN RIG UDW INC.


Debtor.
–––––––––––––––––––––––––––––––––––
TALLY MINDY WIENER,
Appellant,
– v. –
OCEAN RIG UDW INC., IRAKLIS SBAROUNIS, DRILL RIGS HOLDINGS INC.,
DRILLSHIPS FINANCING HOLDING INC., DRILLSHIPS OCEAN VENTURES INC.,
Debtors-Appellees,
SIMON APPELL, FOREIGN REPRESENTATIVE, ELEANOR FISHER,
FOREIGN REPRESENTATIVE,
Debtors.
___________________________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK

BRIEF FOR DEBTORS-APPELLEES

KELSI B. CORKRAN EVAN C. HOLLANDER


ORRICK, HERRINGTON DANIEL A. RUBENS
& SUTCLIFFE LLP EMMANUEL FUA
1152 15th Street NW ORRICK, HERRINGTON
Washington, DC 20005 & SUTCLIFFE LLP
(202) 339-8400 51 West 52nd Street
New York, New York 10019
(212) 506-5000

Attorneys for Debtors-Appellees


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CORPORATE DISCLOSURE STATEMENT

The following individuals and entities directly or indirectly own

the following percentages of equity interests in Debtor-Appellee Ocean

Rig UDW Inc. (UDW): affiliates of Elliott International Capital Advisors

Inc., BlueMountain Capital Management, LLC, Canyon Capital

Advisors LLC, Avenue Capital Group, Pacific Investment Management

Company LLC, and Oz Management LP own approximately 20.24%,

10.78%, 7.74%, 7.61%, 5.47%, and 5.16%, respectively, and Prime Cap

Shipping Inc., a company affiliated with Mr. George Economou,

beneficially owns approximately 9.31%. UDW directly or indirectly

owns 100% of Debtors-Appellees Drill Rigs Holdings Inc., Drillships

Financing Holding Inc., and Drillships Ocean Ventures Inc. No other

publicly held corporation owns 10% or more of any of the Debtors-

Appellees’ stock.

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TABLE OF CONTENTS

Page
CORPORATE DISCLOSURE STATEMENT............................................ i
TABLE OF AUTHORITIES ..................................................................... iv
INTRODUCTION ...................................................................................... 1
COUNTERSTATEMENT OF THE ISSUES ............................................ 4
COUNTERSTATEMENT OF THE CASE................................................ 4
Statutory Background ...................................................................... 4
The Parties ....................................................................................... 6
A Market Downturn Renders The Debtors Insolvent And
Prompts Their Restructuring ................................................. 7
The Debtors Seek Chapter 15 Recognition ................................... 10
The JPLs Determine To Promote The Schemes ........................... 11
The Bankruptcy Court Grants Recognition .................................. 13
The Cayman Court Sanctions The Schemes, And The
Bankruptcy Court Issues An Order Enforcing Them.......... 16
The Restructuring Becomes Final ................................................. 18
The District Court Dismisses Ms. Weiner’s Appeal ..................... 19
SUMMARY OF ARGUMENT ................................................................. 21
STANDARD OF REVIEW....................................................................... 25
ARGUMENT ............................................................................................ 26
I. Ms. Wiener Lacks Standing To Pursue This Appeal........... 26
A. Only those persons aggrieved by a bankruptcy
court’s order have standing to challenge the order
on appeal. ..................................................................... 26
B. As a purported shareholder of an insolvent
company, Ms. Wiener lacked a pecuniary interest
in the Debtors’ restructuring. ...................................... 29

ii
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C. Regardless of the Debtors’ financial condition, the


recognition order did not affect Ms. Wiener’s
pecuniary interests. ..................................................... 36
II. The District Court Did Not Abuse Its Discretion In
Dismissing The Appeal As Equitably Moot. ........................ 44
A. The district court correctly applied the equitable
mootness doctrine to this chapter 15 appeal. ............. 45
B. The district court did not abuse its discretion in
concluding that all relevant factors support the
doctrine’s application. .................................................. 52
CONCLUSION ........................................................................................ 59
CERTIFICATE OF COMPLIANCE

iii
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TABLE OF AUTHORITIES

Page(s)

Cases

In re 60 E. 80th St. Equities, Inc.,


218 F.3d 109 (2d Cir. 2010) ........................................................... 25, 29

In re Agrokor d.d.,
No. 18-12104, __ B.R. __, 2018 WL 5298403 (Bankr.
S.D.N.Y. Oct. 24, 2018) ........................................................................ 50

Allstate Ins. Co. v. Hughes,


174 B.R. 884 (S.D.N.Y. 1994) ............................................ 49, 51, 54, 58

In re Arcapita Bank B.S.C.(c),


Nos. 13 Civ. 5755-56 (SAS), 2014 WL 46552 (S.D.N.Y.
Jan. 6, 2014) ......................................................................................... 48

In re Baker,
604 F.3d 727 (2d Cir. 2010) ................................................................. 25

In re Barnet,
737 F.3d 238 (2d Cir. 2013) ..................................... 1, 26, 27, 28, 40, 41

In re Bear Stearns High Grade Structured Credit Strategies


Master Fund, Ltd.,
389 B.R. 325 (S.D.N.Y. 2008) .............................................................. 50

Bennett v. Jefferson Cty.,


899 F.3d 1240 (11th Cir. 2018) ...................................................... 47, 51

In re BGI, Inc.,
772 F.3d 102 (2d Cir. 2014) ........................... 2, 3, 26, 44, 45, 46, 48, 53

In re BGI, Inc.,
No. 12cv7714 (ALC), 2013 WL 10822966 (S.D.N.Y. May
22, 2013) ............................................................................................... 58

iv
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In re Charter Commc’ns, Inc.,


691 F.3d 476 (2d Cir. 2012) ......................................... 44, 45, 46, 56, 58

In re Chateaugay Corp.,
10 F.3d 944 (2d Cir. 1993) ....................................................... 52, 55, 57

In re Chateaugay Corp.,
988 F.2d 322 (2d Cir. 1993) ................................................................. 58

In re City of Detroit,
838 F.3d 792 (6th Cir. 2016) .......................................................... 47, 48

In re DBSD N. Am., Inc.,


634 F.3d 79 (2d Cir. 2011) ....................................................... 26, 27, 40

In re E.C. Ernst, Inc.,


2 B.R. 757 (S.D.N.Y. 1980) .................................................................. 26

In re Fairfield Sentry Ltd.,


714 F.3d 127 (2d Cir. 2013) ....................................................... 5, 42, 43

In re Fiorano Tile Imports, Inc.,


619 F. App’x 33 (2d Cir. 2015) (summary order) ................................ 58

Freeman v. Journal Register Co.,


452 B.R. 367 (S.D.N.Y. 2010) .............................................................. 29

In re GT Automation Grp., Inc.,


828 F.3d 602 (7th Cir. 2016) ................................................................ 29

In re Gucci,
126 F.3d 380 (2d Cir. 1997) ................................................................. 27

Huebner v. Midland Credit Mgmt., Inc.,


897 F.3d 42 (2d Cir. 2018) ................................................................... 53

In re Johns-Manville Corp.,
843 F.2d 636 (2d Cir. 1988) ............................................... 26, 27, 36, 38

Millea v. Metro-North R.R. Co.,


658 F.3d 154 (2d Cir. 2011) ................................................................. 32

v
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In re Morgan Stanley Info. Fund Sec. Litig.,


592 F.3d 347 (2d Cir. 2010) ................................................................... 9

In re MPM Silicones, LLC,


874 F.3d 787 (2d Cir. 2017) ..................................................... 52, 55, 56

In re Point Center Fin., Inc.,


890 F.3d 1188 (9th Cir. 2018) ........................................................ 27, 28

In re Quigley Co.,
391 B.R. 695 (Bankr. S.D.N.Y. 2008) .................................................. 35

Rajamin v. Deutsche Bank Nat’l Trust Co.,


757 F.3d 79 (2d Cir. 2014) ................................................................... 25

Royal & Sun Alliance Ins. Co. v. Century Int’l Arms, Inc.,
466 F.3d 88 (2d Cir. 2006) ................................................................... 51

In re Technicool Sys, Inc.,


896 F.3d 382 (5th Cir. 2018) ................................................................ 26

In re Transwest Resort Props., Inc.,


801 F.3d 1161 (9th Cir. 2015) .............................................................. 58

Webster v. Fall,
266 U.S. 507 (1925) .............................................................................. 43

In re Zarnel,
619 F.3d 156 (2d Cir. 2010) ........................................................... 25, 27

In re Zenith Elecs. Corp.,


329 F.3d 338 (3d Cir. 2003) ................................................................. 57

Zhang v. Gonzales,
426 F.3d 540 (2d Cir. 2005) ................................................................. 37

Statutes & Rules

11 U.S.C. § 101(15) ....................................................................... 37, 38, 42

11 U.S.C. § 101(41) ................................................................................... 38

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11 U.S.C. § 304.................................................................................... 49, 50

11 U.S.C. § 1101(2) ................................................................................... 46

11 U.S.C. § 1129........................................................................................ 48

11 U.S.C. § 1501(a)(1) ................................................................................. 5

11 U.S.C. § 1504.......................................................................................... 5

11 U.S.C. § 1507.................................................................................... 5, 55

11 U.S.C. § 1508.................................................................................... 5, 51

11 U.S.C. § 1509(b)(2) ........................................................................... 5, 55

11 U.S.C. § 1509(b)(3) ........................................................................... 5, 55

11 U.S.C. § 1515.......................................................................................... 5

11 U.S.C. § 1517........................................................................................ 11

11 U.S.C. § 1517(b)(1) ................................................................................. 5

11 U.S.C. § 1517(d) ................................................................................... 55

11 U.S.C. § 1520.............................................................................. 5, 41, 43

11 U.S.C. § 1520(a) ......................................................................... 5, 39, 42

11 U.S.C. § 1521.......................................................................................... 5

11 U.S.C. § 1521(a) ............................................................................... 6, 55

11 U.S.C. § 1525(a) ..................................................................................... 5

Bankruptcy Rule 8006 .............................................................................. 15

Cayman Islands Companies Law (2016 Revision) § 140(1) .............. 34, 35

Fed. R. Evid. 201......................................................................................... 9

Order 102, Rule 20(4)(e) of the Grand Court Rules 1995 ....................... 12

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Order 102, Rule 20(7) of the Grand Court Rules 1995 ........................... 12

Other Authorities

7 Collier on Bankruptcy (16th ed. 2009) .................................................. 53

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INTRODUCTION

Appellant Tally M. Wiener seeks to overturn a bankruptcy court

order granting recognition in the United States of the Cayman Islands-

based insolvency proceedings of Ocean Rig UDW Inc. (UDW) and three

of its subsidiaries (referred to collectively as Ocean Rig or the Debtors).

Exercising its authority under chapter 15 of the Bankruptcy Code, the

bankruptcy court granted various forms of relief to facilitate the

Cayman proceedings, including recognizing those proceedings as

“foreign main proceedings.” Ms. Wiener, an attorney acting pro se who

purports to be a UDW shareholder, was the sole objector to the Debtors’

motion for recognition of the Cayman proceedings. The bankruptcy

court overruled her objections, and in the absence of any request for a

stay, the restructuring proceeded to its conclusion.

In the district court, Appellees moved for dismissal of Ms.

Wiener’s appeal under two well-settled prudential doctrines. First,

standing to appeal from bankruptcy court orders is limited to persons

“directly and adversely affected pecuniarily” by such an order. In re

Barnet, 737 F.3d 238, 242 (2d Cir. 2013). Second, because “effective

relief on appeal becomes impractical, imprudent, and … inequitable”

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once a restructuring is complete, the doctrine of equitable mootness

requires certain bankruptcy appeals to be dismissed at the outset. In re

BGI, Inc., 772 F.3d 102, 107 (2d Cir. 2014). The district court granted

the motion to dismiss on both independent grounds.

This Court should affirm. First, as for standing, Ms. Wiener’s

status as a putative shareholder in an insolvent company meant that

she lacked a stake in the restructuring, as there was not sufficient

value in the enterprise to make creditors whole. None of Ocean Rig’s

creditors objected to the Debtors’ request for the bankruptcy court to

recognize the Cayman proceedings; indeed, they overwhelmingly

supported that relief. Although Ms. Wiener now purports to contest the

Debtors’ solvency, she fails to identify any clear error in the lower

courts’ factual findings. Moreover, separate and apart from the

Debtors’ financial condition, Ms. Wiener cannot articulate any

connection between the order she challenges and her pecuniary

interests.

Nor has Ms. Wiener identified any error or abuse of discretion in

the district court’s finding that this appeal is equitably moot. Although

the equitable mootness doctrine originated in appeals from orders

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confirming chapter 11 plans, it has since been applied to other contexts,

“without apparent ill effect.” BGI, 772 F.3d at 109. There is every

reason to apply this doctrine to chapter 15 appeals, like this one, that

threaten to upset a completed restructuring that has the imprimatur of

a foreign court. Here, Ms. Wiener never sought to stay the bankruptcy

court’s recognition order, which was a condition precedent to the

consummation of the Cayman restructuring and was relied upon by

creditors, the Debtors, and other stakeholders. Nullifying the chapter

15 proceedings would thus impinge on the rights of third parties who

overwhelmingly supported the restructuring, and risk undoing

compromises essential to the Debtors’ post-restructuring viability. It is

accordingly inequitable for this appeal to proceed.

In sum, because Ms. Wiener cannot show she has any pecuniary

stake in this appeal’s outcome, or that it would be feasible—let alone

equitable—to overturn a condition precedent to a restructuring that has

already been consummated, this Court should affirm the district court’s

dismissal of the appeal.

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COUNTERSTATEMENT OF THE ISSUES

1. Whether the district court correctly found that Ms. Wiener

lacks standing to appeal the bankruptcy court’s order granting

recognition of foreign insolvency proceedings, where she had no

pecuniary interest in the outcome of the foreign restructuring and

cannot articulate any connection between her asserted pecuniary

interests and the injunctions that she challenges on appeal.

2. Whether the district court acted within its discretion in

finding Ms. Wiener’s appeal to be equitably moot where she failed to

seek a stay, the foreign restructuring proceeded to completion, and the

order challenged on appeal has been relied upon by creditors,

shareholders, and other third parties.

COUNTERSTATEMENT OF THE CASE1

Statutory Background

This appeal arises from proceedings under chapter 15 of the

Bankruptcy Code. Chapter 15 aims to “provide effective mechanisms

for dealing with cases of cross-border insolvency, while promoting

1 Citations to “Br.” refer to Ms. Wiener’s opening brief in this appeal,


citations to “A” refer to Ms. Wiener’s Appendix, and citations to “SA”
refer to the Appellees’ Supplemental Appendix.

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international cooperation, legal certainty, fair and efficient

administration of cross-border insolvencies, protection and

maximization of debtors’ assets, and the rescue of financially troubled

businesses.” In re Fairfield Sentry Ltd., 714 F.3d 127, 132 (2d Cir.

2013) (quotation marks omitted); see also 11 U.S.C. §§ 1501(a)(1), 1508,

1525(a). To that end, chapter 15 permits representatives of foreign

debtors to commence an ancillary case in the United States by

petitioning a U.S. bankruptcy court for recognition of insolvency

proceedings taking place abroad. 11 U.S.C. §§ 1504, 1515.

A U.S. bankruptcy court’s decision to grant recognition, in turn,

authorizes various forms of automatic and discretionary relief. Id.

§§ 1520, 1521; see also id. §§ 1507, 1509(b)(2)-(3). As relevant here, an

order granting recognition of a “foreign main proceeding” gives rise to

an automatic stay of all proceedings against the debtor in the United

States, as well as all actions that interfere with the debtor’s property

located within the United States. See Fairfield Sentry, 714 F.3d at 133

(citing 11 U.S.C. § 1520(a)); see also 11 U.S.C. § 1517(b)(1) (defining a

foreign proceeding as a “foreign main proceeding” if it takes place “in

the country where the debtor has the center of its main interests”).

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Moreover, once a recognition order is entered, the court may grant “any

appropriate relief” where necessary to further chapter 15’s purposes

and protect the debtor’s assets. 11 U.S.C. § 1521(a).

The Parties

Ocean Rig Group is an international offshore oil drilling

contractor and owner and operator of drilling rigs. SA236 ¶ 7

(Kandylidis Declaration). Debtor-Appellee Ocean Rig UDW Inc. (UDW)

is the holding company of the Ocean Rig Group and the parent of the

three subsidiary Debtors-Appellees (together with UDW, the Debtors).

SA233 ¶ 3. Iraklis Sbarounis is the Cayman Islands court-appointed

foreign representative of the Debtors for these proceedings, as well as

the successor to the Debtors’ former foreign representatives and joint

provisional liquidators (JPLs), Eleanor Fisher and Simon Appell. SA30

¶ 4 (Sbarounis Declaration).2

2The restructuring was approved by the Cayman court in September


2017, and on October 4, 2017, that court issued orders discharging Ms.
Fisher and Mr. Appell as foreign representatives of the Debtors and
appointing Mr. Sbarounis, the Chief Financial Officer of UDW, as the
Debtors’ successor foreign representative. See SA896-98 (Cayman
Court Discharge and Appointment Order); C.A. Dkt. No. 16 (amended
caption).

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Appellant Tally M. Wiener is an attorney and purported

shareholder of UDW who has represented herself in these proceedings.

SA294 (Amended Objection); SA623 (Recognition Opinion). She claims

to have purchased an undisclosed quantity of shares of UDW at some

point before she filed her objection to the Debtors’ motion for

recognition.3

A Market Downturn Renders The Debtors Insolvent And Prompts


Their Restructuring

By 2017, an unprecedented drop in crude oil prices severely

depressed the off-shore drilling market. SA239-40 ¶ 13. Due to these

market forces and substantial payments coming due under the Debtors’

various debt instruments, the Debtors were unable to remain solvent.

SA240-41 ¶¶ 14-16; SA627-28; SA850 ¶¶ 3-4 (Cayman Court

Judgment). In response to these financial challenges, the Debtors

3Ms. Wiener takes issue with the notion that she is a “purported”
shareholder, claiming that Appellees “admitted she is a shareholder” by
describing her as such in a filing with the Securities and Exchange
Commission. Br. 13 n.6. The district court and bankruptcy court
properly referred to Ms. Wiener as a “purported” or “asserted”
shareholder because she has never “backed up with any evidence” her
assertion that she owns UDW shares. SA622-23; A31. In any event,
there is no need for this Court to resolve that semantic dispute; this
appeal should be dismissed even assuming (as the district court did)
that Ms. Wiener in fact holds UDW shares.

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retained legal and financial advisors in early 2016 to consider

restructuring alternatives. SA241 ¶ 17.

Those efforts culminated in a March 23, 2017 agreement with

creditors to restructure the Debtors’ financial indebtedness through

four Schemes of Arrangement (Schemes) under Cayman Islands law.4

The restructuring agreement was supported by an overwhelming

majority of affected creditors and contemplated a substantial

deleveraging of Ocean Rig through the exchange of more than $3.7

billion of existing financial indebtedness for 100% of the equity in the

reorganized UDW (projected to be worth about $1.831 billion), cash

payments of about $288 million, and new secured debt of $450 million.

Id.; see also SA31-33 ¶¶ 6, 9. The agreement described the anticipated

distributions to be made to affected creditors and made clear that

UDW’s existing shareholders would be effectively wiped out.

To begin the process of obtaining the requisite court approval for

the restructuring, the Debtors filed winding up petitions on March 24,

2017 in the Cayman Islands, where UDW is domiciled. SA850 ¶ 3,

4 A scheme of arrangement is a court-approved compromise between a


company and its creditors or shareholders. See SA266-70 ¶¶ 41-49
(summarizing relevant provisions of Cayman Islands Companies Law).

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SA233-34 ¶ 4. On March 27, 2017, the Cayman court appointed the

JPLs (Ms. Fisher and Mr. Appell) and authorized them to commence

chapter 15 proceedings on behalf of the Debtors, as well as to consider

and (if deemed appropriate by the JPLs) promote the restructuring

agreement as set forth in the Schemes. SA171-231. The next day, the

Debtors publicly disclosed the terms of the restructuring agreement via

a filing with the Securities and Exchange Commission. See Ocean Rig

UDW Inc., SEC Form 6-K, Ex. 99.1 (Mar. 28, 2017), https://www.sec.gov

/Archives/edgar/data/1447382/000091957417003022/d7448127_ex99-

1.htm (contemplating, inter alia, the provision of 100% of the equity of

the reorganized UDW to various groups of creditors, subject to dilution

by shares to be distributed under a management equity plan); see also

SA241-44 ¶¶ 17-22 (describing restructuring agreement).5

5 Appellees respectfully request that the Court take judicial notice of


the SEC filings referenced in this brief for the limited purpose of
establishing that the contents of those filings were publicly disclosed.
See In re Morgan Stanley Info. Fund Sec. Litig., 592 F.3d 347, 354 n.5
(2d Cir. 2010); Fed. R. Evid. 201; see also Br. 13 n.6 (requesting judicial
notice of UDW’s representations in an SEC filing).

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The Debtors Seek Chapter 15 Recognition

In order to stave off disruptive actions threatened by certain hold-

out creditors, see SA250-51 ¶¶ 35-38, the JPLs (in their capacity as the

Debtors’ authorized foreign representatives) promptly commenced

chapter 15 cases for each of the Debtors in the U.S. Bankruptcy Court

in the Southern District of New York on the same day the JPLs were

appointed: March 27, 2017. In the chapter 15 cases, the JPLs sought

recognition of the Cayman proceedings as “foreign main proceedings”

and related relief under the Bankruptcy Code. SA111-52. One of

UDW’s major creditors, Texas-based Highland Capital Management LP

(acting for several managed funds that were significant creditors of

UDW), conducted substantial discovery regarding the recognition

motion and initially indicated that it intended to object to that relief.

Highland ultimately decided not to file an objection, as detailed in a

June 2017 letter to the bankruptcy court. SA289-90.

Although Ms. Wiener was aware of the chapter 15 proceedings

since at least April 2017, SA477 (April 15, 2017 email from Ms. Wiener

to undersigned counsel), she did not participate in any aspect of the

cases, including discovery, until she filed her objection to the

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recognition motion on July 10, 2017, the last possible date to do so. See

SA285-88; SA291-96. In that objection, Ms. Wiener contended, inter

alia, that the Debtors could not meet their burden of proving either that

their “center of main interests” (COMI) was in the Cayman Islands or

that the Debtors maintained an “establishment” in the Cayman Islands

such that the Cayman proceedings could qualify for recognition as

foreign “main” or “nonmain” proceedings under 11 U.S.C. § 1517.

SA294-95.6 Besides Ms. Wiener, no party filed an objection to the

recognition motion.

The JPLs Determine To Promote The Schemes

In May 2017, after thoroughly investigating the Debtors’ financial

condition and the terms of the restructuring agreement as embodied by

the Schemes, the JPLs decided to promote the Schemes. SA552 § 9.3

(Practice Statement Letter). The JPLs then promptly filed the Schemes

with the Cayman court, together with a proposed Explanatory

6On the eve of the recognition hearing, Ms. Wiener filed a letter motion
challenging the venue of the chapter 15 proceedings. SA469-71.

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Statement7 and summonses seeking authority to commence meetings of

creditors for each of the Debtors. SA282-83 ¶¶ 13-14.

In July 2017, the Cayman court authorized the JPLs to convene

creditors’ meetings the following month for the purpose of voting on the

Schemes. Creditors were then provided with the approved Explanatory

Statement, which set forth detailed descriptions of how the Schemes

would operate, including explanations of anticipated distributions,

financial analyses, and valuations, as well as the details of all

management agreements with third parties. SA538 ¶ 24. The

Explanatory Statement made clear what all affected creditors and

significant equity holders recognized and what the Cayman court

ultimately found: that the Debtors were profoundly insolvent prior to

the restructuring. See SA851-52 ¶¶ 9-15; SA32-33 ¶ 9; SA48-65

(Explanatory Statement – Valuation Analysis).8 After the affected

7 An explanatory statement provides creditors or shareholders with


information necessary for them to make an informed decision about the
merits of a scheme. See SA527-29 (Order 102, Rule 20(4)(e), (7) of the
Grand Court Rules 1995).

8The parties filed excerpts of the Explanatory Statement with the


bankruptcy court and district court. As Mr. Sbarounis explained in his
district court declaration (SA32), the entire document is publicly
available on the website of the information agent for the restructuring:

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creditors voted in favor of the Schemes by overwhelming margins,

SA598 ¶ 48, the Cayman court scheduled hearings for September 2017

to consider whether to “sanction” (i.e., approve) the Schemes, SA523-24

¶¶ 23-24.

The Bankruptcy Court Grants Recognition

On August 16, 2017, the bankruptcy court held a hearing on

recognition, during which the parties, including Ms. Wiener, presented

evidence and examined witnesses. Later that month, the court issued

an opinion and order (the Recognition Opinion, SA618-52, and the

Recognition Order, SA653-589) overruling Ms. Wiener’s objections and

granting recognition of the Cayman proceedings, including the Scheme-

https://cases.primeclerk.com/oceanrig/Home-DocketInfo?DocAttribute
=3208&DocAttrName=SCHEMEDOCUMENTS.

9For purposes of clarity, this brief departs from the defined terms the
district court used in its dismissal opinion to refer to the opinion and
order granting the petition for recognition. See A23 (referring to the
bankruptcy court’s August 24, 2017 memorandum opinion on
recognition as the “Recognition Order” and to the accompanying order of
the same date as the “Enforcement Order”). This brief uses the term
“Enforcement Order” to refer to the bankruptcy court’s September 20,
2017 order giving full force and effect to the Cayman Schemes in the
United States (SA875-81), discussed infra at 17, which resolved a
separate motion.

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related proceedings, as “foreign main proceedings.” See SA653-54. 10

The bankruptcy court found, among other things, that venue of the

chapter 15 proceedings was proper in the Southern District of New

York; that Cayman insolvency proceedings “apply the property of the

debtor in satisfaction of its liabilities pari passu and distribute such

property to creditors according to their rights and interests”; that the

Debtors’ COMI was in the Cayman Islands; that the Debtors did not

manipulate their COMI in bad faith by establishing their COMI in the

Cayman Islands prior to the petition date; and that granting

recognition of the Cayman proceedings advanced the public policy

objectives of chapter 15. SA639; SA642-51.11

10As the court’s accompanying opinion explained, the Recognition Order


did not itself give full force and effect to the terms of the Schemes,
which at that point had not yet been presented to the Cayman court for
consideration. See SA652; see also SA613:8-11, 615:18-22.

11Because Ms. Wiener did not provide any documentary evidence of her
alleged shareholder status, the bankruptcy court concluded that she
“failed to establish that she is a party-in-interest with standing to
contest recognition.” SA623. The court nonetheless considered her
objections on the merits “as if she had established her standing to object
to recognition” because of the court’s independent obligation to
determine whether recognition was proper. Id.

14
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By its terms, the Recognition Order became “immediately effective

and enforceable upon its entry.” SA658. Ms. Wiener did not seek a stay

of the Recognition Order in the bankruptcy court, district court, or this

Court. On September 7, 2017, Ms. Wiener filed a notice of appeal from

the Recognition Order and the accompanying Opinion. SA659-63. Her

Bankruptcy Rule 8006 statement identified as issues on appeal the

bankruptcy court’s conclusions regarding venue, her status as a

shareholder, the location of the Debtors’ COMI (including the propriety

of efforts to establish the Debtors’ COMI in the Cayman Islands as part

of the restructuring strategy), the recognition of Cayman Scheme-

related proceedings in addition to the provisional liquidation

proceedings, and whether the Debtors acted in bad faith or violated

public policy. SA882-87 (Statement of Issues).12

12As Ms. Wiener acknowledges, the district court dismissed her appeal
on the basis that she lacked standing and that the appeal was equitably
moot, “without reaching the merits of the appeal.” Br. 12. Accordingly,
the merits of the bankruptcy court’s ruling on recognition are not before
this Court. Ms. Wiener’s brief nonetheless includes several asides
questioning various aspects of the recognition proceedings as well as
certain terms of the Cayman Schemes. See Br. 6-11 & nn.2-4, 6.
Appellees disagree with Ms. Wiener’s characterizations and reserve all
rights to address them in due course if this case is remanded to the
district court for further proceedings on the merits of the bankruptcy
court’s ruling.

15
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The Cayman Court Sanctions The Schemes, And The Bankruptcy


Court Issues An Order Enforcing Them

In September 2017, following a three-day hearing, the Cayman

court issued orders sanctioning the Schemes. SA666-844; see also

SA847-74 (Cayman Court Judgment). The Cayman court determined,

inter alia, that “[t]he restructuring of all four Schemes put together is

the best way of maximising value for the creditors of the Group,” who

“overwhelming[ly] support[ed]” the transaction. SA851 ¶¶ 7-8; SA874

¶¶ 130-31. The Cayman court further found that the alternative to the

Schemes would be liquidation and enforcement of security by creditors,

which “would result in value destruction generally for all creditors.”

SA852 ¶ 11. Neither the Cayman court nor any party to those

proceedings—including Highland, which vigorously contested the

Schemes and whose principal and founder was UDW’s largest

shareholder, see SA275—ever suggested there was sufficient value in

the Debtors to pay creditor claims in full or to support any legal

entitlement to a recovery by UDW shareholders. Ms. Wiener never

participated in the Cayman proceedings.

Once the Schemes were sanctioned by the Cayman court, the

Debtors’ foreign representatives moved in the chapter 15 cases for an

16
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order granting comity and giving full force and effect to the Schemes in

the United States (the Enforcement Motion). SA478-510. Ms. Wiener

had notice of this motion, its objection deadline, and hearing date,

SA602-08, but did not file any objection or appear at the hearing.

Indeed, no party opposed the motion.

At the hearing on the Enforcement Motion, the bankruptcy court

observed that the Cayman court had provided “a very careful,

thoughtful, reasoned decision” in support of its orders sanctioning the

Schemes. SA891:6-10. The bankruptcy court then issued an order

recognizing, granting comity to, and giving full force and effect in the

United States to the Cayman court’s orders and to the Schemes

themselves. SA875-81 (Enforcement Order). The bankruptcy court

found, inter alia, that the enforcement relief requested was “necessary

to effectuate the purpose of chapter 15 and to protect the Debtors, their

assets and the interests of their creditors and other parties in interest.”

SA877 ¶ 6. No party appealed from or sought a stay of the Enforcement

Order, which by its terms became effective immediately.

17
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The Restructuring Becomes Final

Following the bankruptcy court’s entry of the Recognition and

Enforcement Orders, the Schemes became effective on September 22,

2017, while Ms. Wiener’s appeal was still pending in the district court.

A29, 38; SA31 ¶ 8; SA34-46.13 As provided under the Schemes, the

restructuring was consummated through several steps that irrevocably

changed the Debtors’ capital structures and operations. A38; SA32-33

¶ 9. UDW issued shares to creditors representing virtually all of the

equity value of the reorganized Debtors (estimated to have a value of

about $1.831 billion). SA32 ¶ 9(a); SA63.14 Creditors also received

13Recognition of the Cayman proceedings and issuance of the


Enforcement Order were both conditions precedent to the
restructuring’s consummation. See SA675-76 § 4.1(f); SA903-04.

14In connection with the issuance of equity to creditors, and as


authorized by a shareholder vote on April 24, 2017, UDW effectuated a
reverse stock split on September 21, 2017. The reverse stock split
effected an exchange of every 9,200 of existing shares into one share of
the reorganized company (with no fractional shares being issued),
which, when combined with the shares issued to creditors under the
restructuring, resulted in pre-restructuring shareholders’ retaining in
the aggregate a 0.02% equity stake in the reorganized company. SA36
(Restructuring Press Release); SA63; see Ocean Rig UDW Inc., SEC
Form 6-K, Ex. 99.1 (April 24, 2017), https://www.sec.gov/Archives
/edgar/data/1447382/000091957417003579/d7465303_6-k.htm
(announcing shareholder vote authorizing Board to effect reverse stock
split); Ocean Rig UDW Inc., SEC Form 6-K, Ex. 99.1 (Sept. 19, 2017),

18
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approximately $288 million in cash (SA32 ¶ 9(b)) and $450 million of

new secured notes (SA32 ¶ 9(c)). In addition, the reorganized Debtors

also entered into a long-term management services agreement with

TMS Offshore Services Ltd. (SA32 ¶ 9(d)) and a new shareholders’

agreement for UDW (SA33 ¶ 9(e)).15

The District Court Dismisses Ms. Weiner’s Appeal

Although Ms. Wiener noticed an appeal from the bankruptcy

court’s Recognition Order, she did not seek to stay that order, did not

participate in the Cayman proceedings, and did not object to or appeal

from the bankruptcy court’s Enforcement Order. The restructuring

thus proceeded to completion while her appeal remained pending in the

https://www.sec.gov/Archives/edgar/data/1447382/0000919574170
06817/d7655314_ex99-1.htm (announcing reverse stock split).

15On September 4, 2018, third party Transocean Ltd., a publicly traded


company, announced that it had entered into a definitive merger
agreement with UDW through which it will acquire UDW in a cash and
stock transaction valued at approximately $2.7 billion. Subject to the
satisfaction or waiver of certain conditions, the merger is expected to
close in the fourth quarter of 2018. See Transocean Ltd., SEC Form 8-
K, Ex. 99.1 (Sept. 4, 2018), https://www.sec.gov/Archives/edgar/
data/1451505/000145150518000091/c505-20180904ex9912cc652.htm;
Transocean Ltd. & Ocean Rig UDW Inc., Joint Proxy Statement/
Prospectus 7 (Oct. 16, 2018), https://www.sec.gov/Archives/edgar/
data/1451505/000155837018007708/rig-20181016x424b3.htm.

19
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district court. Accordingly, Appellees moved to dismiss Ms. Wiener’s

appeal on two independent grounds: first, because Ms. Weiner lacked

appellate standing as a person aggrieved by the order that she

challenged, and second, because the restructuring’s consummation

rendered the appeal equitably moot. The district court stayed merits

briefing while the motion to dismiss was pending. SA1. Following a

pre-motion conference and full briefing on the motion to dismiss, the

district court dismissed the appeal in a memorandum opinion and order

dated April 5, 2018. A23-41.

As set forth in its dismissal order, the district court granted the

motion to dismiss on both grounds. First, the district court considered

whether Ms. Wiener was an “aggrieved person” whose pecuniary

interests are directly affected by the order on appeal, as is required for

appellate standing. A30. The district court held that Ms. Wiener

lacked standing because, “as a purported shareholder” of an insolvent

company, she “did not stand to lose anything from, and thus had no

pecuniary interest in, UDW’s restructuring.” A32. The district court

also rejected Ms. Wiener’s contention that the decision to permit the

pre-restructuring shareholders to retain a de minimis percentage of

20
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equity for the purpose of enabling UDW to maintain its Nasdaq listing

and avoid the delay and expense of a re-registration process somehow

conveyed “aggrieved person” status upon her. A32-33.

The district court then held that dismissal was independently

warranted on equitable mootness grounds because the Debtors had

already substantially completed their Cayman restructuring and Ms.

Wiener never sought a stay of the Recognition Order. A34. As the court

explained, the equitable mootness doctrine, which originated in

bankruptcy cases filed under chapter 11, has since been applied in cases

under chapters 7, 9, and 13, as well as in a case involving chapter 15’s

predecessor statute. A34-35. The court found that the Debtors’

positions had “comprehensively changed” and their restructuring was

“substantially completed,” thus giving rise to a presumption of

mootness that Ms. Wiener failed to rebut. A38.

SUMMARY OF ARGUMENT

The district court’s judgment should be affirmed because Ms.

Wiener lacks standing and because her appeal is equitably moot.

I.A. Standing to appeal a bankruptcy court order is limited to

persons who are “aggrieved” by that order, meaning that the order

21
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directly and adversely affects that person’s financial interests. This

standard is more stringent than the test for Article III standing. That

is because bankruptcy proceedings affect a multitude of parties, so some

further limitation on standing is needed to ensure that courts are not

deluged with appeals from parties only marginally affected by

bankruptcy court orders.

B. As a purported shareholder in an insolvent company, Ms.

Wiener was not aggrieved by the bankruptcy court’s order granting

recognition. The bankruptcy court, district court, and Cayman court all

determined that the Debtors were profoundly insolvent at the time the

chapter 15 petitions were filed. Ms. Wiener fails to identify any error,

let alone a clear error, in that factual finding. All relevant stakeholders

recognized that the Debtors lacked sufficient value to make creditors

whole, and all provisions of the Scheme were consistent with that

reality. Under Cayman law, like U.S. law, equity holders of an

insolvent enterprise are not entitled to any recovery until creditors have

been paid in full. Because Ms. Wiener stood to gain nothing in these

proceedings, she cannot maintain an appeal that seeks to undermine an

22
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order overwhelmingly supported by the creditors who had an actual

financial stake in the restructuring.

C. Even if her contentions about the Debtors’ financial condition

had merit, Ms. Wiener would still lack standing because she cannot

articulate any connection between the order she challenges and her

pecuniary interests. The Recognition Order did not target Ms. Wiener

or otherwise have anything to do with her; it simply operated to stay

proceedings and other actions adverse to the Debtors and their property

in the United States. The bankruptcy court entered that order after

finding that such relief was necessary to facilitate the Cayman

restructuring, as well as in the interest of the Debtors, their

stakeholders, and the public. Ms. Wiener has not contested any of those

findings, and she cannot explain why the Recognition Order directly

and adversely affects her financial interests. Thus, she is not a person

aggrieved by that order.

II. The doctrine of equitable mootness provides for dismissal of

appeals when appellate relief would unduly disrupt a finalized

restructuring. The district court did not abuse its discretion in

dismissing this appeal as equitably moot.

23
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A. The district court correctly held that equitable mootness

applies to appeals in chapter 15 bankruptcy cases. Although the

doctrine originated in appeals from orders confirming chapter 11 plans,

it has been extended to other contexts. The policies that give rise to the

doctrine—finality, reliance, and equity—apply just as much to

recognition orders under chapter 15 as they do to bankruptcy court

orders entered in other types of proceedings. Moreover, when a

bankruptcy court order is entered in aid of a foreign restructuring that

has become final while an appeal is pending, comity principles heighten

the importance of assessing whether appellate relief would be equitable.

B. The district court acted well within its discretion in

determining this appeal is equitably moot under this Court’s

precedents, which call for a strong presumption of mootness when a

restructuring has been substantially consummated. Here, it is

undisputed that the Cayman restructuring has now been completed for

over a year. The presumption therefore applies, and Ms. Wiener has

not made any meaningful attempt to establish the circumstances

necessary to rebut it. First and foremost, she has never sought a stay

that would preserve the status quo. Moreover, because the Schemes

24
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were expressly conditional on the entry of a Recognition Order, a

successful appeal would call into question numerous transactions on

which third parties have relied, including the Debtors’ issuance of

equity, distributions of cash and notes, and entry into new agreements

with third parties. For these reasons, granting appellate relief here

would be imprudent and inequitable.

STANDARD OF REVIEW

“On appeal from the district court’s review of a bankruptcy court

decision,” this Court “review[s] the bankruptcy court decision

independently, accepting its factual findings unless clearly erroneous

but reviewing its conclusions of law de novo.” In re Baker, 604 F.3d 727,

729 (2d Cir. 2010) (quotation marks omitted). Standing is ultimately a

“legal issue” subject to de novo review, In re Zarnel, 619 F.3d 156, 161

(2d Cir. 2010), but underlying factual findings are reviewable for clear

error.16 This Court “review[s] a district court’s dismissal on grounds of

16 See, e.g., In re 60 E. 80th St. Equities, Inc., 218 F.3d 109, 116 (2d Cir.
2010) (holding that district court and bankruptcy court findings that
bankruptcy estate had insufficient value to pay creditors in full were
“findings of fact” subject to clear error review, and concluding that the
debtor thus lacked standing to challenge the sale of assets); Rajamin v.
Deutsche Bank Nat’l Trust Co., 757 F.3d 79, 85 (2d Cir. 2014) (“If the
court … resolved disputed facts in ruling on standing, we will accept the

25
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equitable mootness for abuse of discretion, under which [this Court]

examine[s] conclusions of law de novo and findings of fact for clear

error.” BGI, 772 F.3d at 107.

ARGUMENT

I. Ms. Wiener Lacks Standing To Pursue This Appeal.

A. Only those persons aggrieved by a bankruptcy court’s


order have standing to challenge the order on appeal.

As the district court correctly held, “[t]o have standing to appeal a

bankruptcy court order, an appellant must be an ‘aggrieved person,’”

such that the specific order in question “‘directly affects [the appellant’s]

pecuniary interests.’” A30 (quoting In re Johns-Manville Corp., 843

F.2d 636, 642 (2d Cir. 1988)). This “aggrieved person” test is “stricter”

than the injury-in-fact test for Article III standing, Barnet, 737 F.3d at

242, in that it requires the appellant’s injury to be both “‘direct[]’ and

‘financial,’” In re DBSD N. Am., Inc., 634 F.3d 79, 89 (2d Cir. 2011). Put

differently, the challenged order “must burden [an appellant’s] pocket

before he burdens a docket.” In re Technicool Sys, Inc., 896 F.3d 382,

court’s findings unless they are clearly erroneous.” (brackets and


quotation marks omitted)); In re E.C. Ernst, Inc., 2 B.R. 757, 760
(S.D.N.Y. 1980) (“Whether an appellant is a ‘person aggrieved’ is a
question of fact ….”).

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386 (5th Cir. 2018). The “stringency” of the “aggrieved person” test is

by design: if not followed, “marginal parties,” Johns-Manville Corp., 843

F.2d at 642 n.3, could mire proceedings in “endless appeals,” Barnet,

737 F.3d at 243, “sound[ing] the death knell of the orderly disposition of

bankruptcy matters,” In re Gucci, 126 F.3d 380, 388 (2d Cir. 1997).17

Thus, although the current Bankruptcy Code does not by its

express terms limit standing to appeal, “for practical reasons this Court

and others have adopted the general rule, loosely modeled on the former

Bankruptcy Act, that in order to have standing to appeal from a

bankruptcy court ruling, an appellant must be ‘a person aggrieved.’”

DBSD, 634 F.3d at 89 (quotation marks omitted). And although this

Court has described that test as “the general rule,” id. (emphasis

added), there is no exception that aids Ms. Wiener. As DBSD

explained, some parties lacking a direct pecuniary interest may have

standing to appeal based on a “public interest,” such as the U.S. Trustee

or SEC. Id. at 89 n.3 (citing Zarnel, 619 F.3d at 162); accord Barnet,

17The Second Circuit is hardly unique in imposing prudential limits on


standing for bankruptcy appeals. “All circuits … limit standing to
appeal a bankruptcy court order to ‘person[s] aggrieved’ by the order.”
In re Point Center Fin., Inc., 890 F.3d 1188, 1191 (9th Cir. 2018).

27
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737 F.3d at 242 n.1. Ms. Wiener does not contend that the “public

interest” test permits her to maintain this appeal, and she cannot point

to any other test this Court has used to assess bankruptcy appellate

standing.

Ms. Wiener’s invocation of a recent Ninth Circuit decision, In re

Point Center Financial, Inc., 890 F.3d 1188 (9th Cir. 2018), only

reinforces the primacy of the “aggrieved person” standard. The Ninth

Circuit allowed the appeal there to proceed where it was undisputed

that the appellants’ “pecuniary interests [were] directly and adversely

affected by the bankruptcy court order in question.” Id. at 1194. The

district court had dismissed the appeal despite that pecuniary interest

because the appellants failed to attend the bankruptcy court hearing on

the motion at issue. The Ninth Circuit reversed, holding that “one need

not have attended and made objections at the hearing to be directly and

adversely affected by a bankruptcy court’s decision.” Id. at 1193. Thus,

Point Center is perfectly consistent with what this Court and the

district court here have held: that a person must be aggrieved by a

bankruptcy court order to have standing to appeal it.

28
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B. As a purported shareholder of an insolvent company,


Ms. Wiener lacked a pecuniary interest in the Debtors’
restructuring.

The district court found that Ms. Wiener, as a “purported

shareholder” of company that was “insolvent,” “did not stand to lose

anything from, and thus had no pecuniary interest in, UDW’s

restructuring.” A31-32. That sound conclusion was itself sufficient to

defeat Ms. Wiener’s appellate standing.18 Ms. Wiener’s arguments to

the contrary misunderstand the applicable law and fall well short of

identifying clear error in the factual findings below.

There is no question that the Debtors were massively insolvent at

the time of the restructuring. Relying on an uncontested declaration of

the Debtors’ foreign representative, the district court found that the

approximately $3.7 billion of debt outstanding at the time of the

18See, e.g., Freeman v. Journal Register Co., 452 B.R. 367, 370-71
(S.D.N.Y. 2010) (where debtors are not “sufficiently solvent to provide
equity holders with a recovery” under a bankruptcy plan, equity holders
lack a “pecuniary interest” in the plan’s confirmation); see also 60 E.
80th St. Equities, 218 F.3d at 115 (chapter 7 debtors have standing to
challenge a sale of their assets “only if there could be a surplus after all
creditors’ claims are paid”); In re GT Automation Grp., Inc., 828 F.3d
602, 605 (7th Cir. 2016) (unsecured creditor lacked standing to appeal
bankruptcy court order when creditor could not demonstrate how it
“would get ‘even a dollar’ from a favorable decision,” where estate’s
assets were insufficient to satisfy other claims that had priority).

29
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restructuring significantly exceeded the Debtors’ total value (estimated

to be approximately $2.6 billion), such that there was “no value left for

[UDW’s] pre-restructuring shareholders.” A31-32; see also SA31 ¶ 6;

SA240-42 ¶¶ 15-16, 19. And the Cayman court, after carefully

considering objections to the Schemes, likewise concluded that the

Debtors were “insolvent,” that the Schemes represented a “fair

allocation” to creditors, and that the “alternative” would “involve

inevitably the liquidation of the [Debtors] and … value destruction

generally for all creditors.” SA850-52 ¶¶ 4, 10-11; SA874 ¶ 130.

Indeed, Ms. Wiener has never disputed that the Debtors’ distributable

value fell well short of satisfying creditors’ claims.

Ms. Wiener maintains, however, that she contested the Debtors’

“cash flow” solvency, positing that the Debtors could have used

available cash or borrowed funds to make two sizeable interest

payments that were due in April 2017, and thereby avoided triggering

cross-default provisions that accelerated the $3.7 billion in debt. See

Br. 20-21. That contention mischaracterizes the declaration of the

Debtors’ then-President and Chief Financial Officer, who explained that

it was not possible for UDW to make an upcoming payment “without

30
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borrowing funds that it [would] be unable to repay.” SA240 ¶ 15. The

bankruptcy court thus concluded that the Debtors “did not expect to

have sufficient cash available to make these payments without further

borrowing,” and that the Debtors thereafter “acted prudently” by

exploring their restructuring options and commencing proceedings in

the Cayman Islands. SA628-29. The district court likewise found that

as of the date the Cayman proceedings were initiated, “UDW was

insolvent and had an upcoming interest payment that it did not have

the money to pay without borrowing funds, which UDW would not have

been able to repay.” A27. Ms. Wiener has come nowhere close to

identifying any clear error in those findings, and her revisionist history

of the Debtors’ solvency should be rejected.

Ms. Wiener then seizes on two Scheme provisions addressing pre-

restructuring shareholders as indicating that the Debtors were solvent.

First, she points to the fact that such shareholders retained a 0.02%

interest in the post-reorganization equity of UDW. Br. 20. But as Ms.

Wiener seems to recognize, that fact had nothing to do with the

intrinsic value of the equity held by UDW’s pre-restructuring

shareholders. The retention of this nominal amount of equity instead

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served a specific purpose wholly unrelated to the Debtors’ solvency: The

Debtors and their creditors decided to provide the pre-restructuring

shareholders of UDW with a 0.02% interest in the reorganized company

in order to enable the company to preserve its Nasdaq listing and avoid

the expense and delay of reapplying for listing on Nasdaq after the

restructuring had been consummated.19 The district court thus

correctly rejected the notion that this de minimis retention of equity by

pre-restructuring shareholders somehow endowed them with a

pecuniary interest in UDW’s restructuring notwithstanding the fact

that creditors were not paid in full. A32.

Similarly misplaced is Ms. Wiener’s argument that the 9.31%

equity stake provided to “management” establishes that shareholders

had a pecuniary interest in the Debtors’ restructuring. Br. 18-20. Ms.

Wiener did not present that argument to the district court: Her

opposition to the motion to dismiss said nothing about the provision of

equity to management. See SA66-90. Thus, she should not be

permitted to advance the argument now. See, e.g., Millea v. Metro-

19See Br. 19 (“Shareholders were diluted to 0.02% as part of trying to


secure continued trading under the ticker symbol ORIG, Ocean Rig
having resisted Nasdaq’s delisting notice.”).

32
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North R.R. Co., 658 F.3d 154, 163 (2d Cir. 2011) (“Arguments raised for

the first time on appeal are deemed waived.”).

In any event, Ms. Wiener’s references to the management equity

plan do nothing to establish that the Debtors were solvent such that

existing shareholders would be entitled to distributions. The

“management” to which Ms. Wiener refers is TMS Offshore Services

Ltd. (TMS), a company in which certain pre-restructuring shareholders

have interests, as the Debtors fully disclosed. See SA92. TMS was

granted a 9.31% equity stake in UDW in accordance with a master

services agreement, which was to be entered into by TMS and the

reorganized UDW upon the consummation of the restructuring.

Explanatory Statement, Part G (Restructuring Documents), at 145.20

The management equity plan reflected a consensual measure to ensure

that the interests of post-restructuring Ocean Rig’s management would

be aligned with the interest of the post-restructuring shareholders in

maximizing the value of the reorganized company. The management

20 Although Ms. Wiener’s brief fails to provide any citations in support


of her contentions about the management equity plan, the terms of the
plan are described in detail in the publicly filed Explanatory Statement
(available at https://cases.primeclerk.com/oceanrig/Home-DownloadPDF
?id1=Njk1Njk2&id2=0). See supra at 11-13.

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equity plan in no way undermined the reality that the Debtors were

deeply insolvent before that restructuring was completed.21

Ms. Wiener further argues that the district court’s analysis is

“inapposite” because it relies on the premise that creditors’ claims must

be satisfied before distributions can be made to equity holders, which

she suggests does not hold true under Cayman law. Br. 18-19. But Ms.

Wiener cites no Cayman law giving shareholders priority over creditors

to the distribution of limited assets. Unsurprisingly, Cayman law does

not diverge from U.S. law in that regard. Instead, Cayman law

provides that each Debtor’s property “shall be applied in satisfaction of

its liabilities pari passu and subject thereto shall be distributed

amongst the members [i.e., shareholders] according to their rights and

interests in the company.” Cayman Islands Companies Law (2016

21 The Debtors’ Boards of Directors deemed this agreement to be


necessary to facilitate Ocean Rig’s continued operations. Explanatory
Statement, supra, Part G (Restructuring Documents), at 146. The
terms of the agreement were “the product of extensive arms-length
negotiations,” were consented to by each creditor that agreed to support
the restructuring, and were approved by the Debtors’ independent
board members. Id. Moreover, the Schemes were ultimately sanctioned
by the Cayman court as the “best way of maximising value for the
creditors of the Group,” SA874 ¶ 130, without any creditor or any other
party having objected to the Scheme provisions regarding the provision
of equity to TMS.

34
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Revision) § 140(1) (emphasis added) (cited in SA641).22 Thus, as set

forth in the declaration of an experienced Cayman insolvency attorney,

the interests of an insolvent Cayman company “are equated to the

interests of the creditors,” and shareholders are not involved in an

insolvent company’s scheme of arrangement. SA265-66 ¶¶ 32, 41

(Reynolds Declaration).

For these reasons, there is no basis to disturb the district court’s

finding that as the shareholder of an insolvent enterprise, Ms. Wiener

failed to satisfy the “person aggrieved” test for appellate standing. And

given Ms. Wiener’s lack of a financial stake in the restructuring, her

challenges also run afoul of the related prudential principle that

appellants may only assert their “own legal rights and interests and not

those of third parties.” A30 (citing In re Quigley Co., 391 B.R. 695, 705

(Bankr. S.D.N.Y. 2008)). The creditors with a stake in this massive

restructuring overwhelmingly supported it, see SA851 ¶ 7; SA865 ¶ 89;

SA874 ¶ 131, and not a single creditor maintained an objection to the

Recognition Order from which Ms. Wiener appeals. When “one

22Ms. Wiener introduced Cayman Islands Companies Law (2016) as an


exhibit during the recognition hearing. See SA385 (Trial Ex. SX-C).

35
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constituency before the court seeks to disturb a plan of reorganization

based on the rights of third parties who apparently favor the plan,”

courts “have been understandably skeptical of the litigant’s motives and

have often denied standing as to any claim that asserts only third-party

rights.” Johns-Manville, 843 F.2d at 644. That caution is fully

applicable to this appeal.

C. Regardless of the Debtors’ financial condition, the


recognition order did not affect Ms. Wiener’s
pecuniary interests.

As discussed above, Ms. Wiener’s status as a purported

shareholder of an insolvent company meant that she lacked the

financial stake in the restructuring necessary to support appellate

standing. In addition to contesting the district court’s finding of

solvency, Ms. Wiener now maintains that the “financial condition of

[the] chapter 15 debtors” is completely irrelevant to appellate standing.

Br. 21. Ms. Wiener’s arguments are misguided, and in fact confirm

deficiencies in her standing that go beyond the fact that she “did not

stand to lose anything from, and thus had no pecuniary interest in,

UDW’s restructuring.” A32.

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Ms. Wiener’s brief devotes two sentences to a new theory of

standing: that “[s]he is a shareholder aggrieved by injunctions to which

she is subject.” Br. 16; see also Br. 14. That contention is flawed for

several reasons. First of all, the argument is unpreserved. Ms.

Wiener’s district court opposition to Appellees’ motion to dismiss

mentioned the Recognition Order injunctions only in passing, see SA71;

SA74, and did not contend that the operation of these injunctions

qualified her as a “person aggrieved” by the Recognition Order.

Because she did not present that argument, the district court did not

address it in its dismissal order. And even in this Court, she does not

develop the point beyond her ipse dixit assertion that she is “aggrieved

by [the] injunctions.” Br. 16; see, e.g., Zhang v. Gonzales, 426 F.3d 540,

545 n.7 (2d Cir. 2005) (deeming argument waived when appellate brief

addressed it in “only a single conclusory sentence”).

In any event, Ms. Wiener’s claim proves entirely too much. The

injunctions in the Recognition Order cover “all entities (as that term is

defined in section 101(15) of the Bankruptcy Code), other than the JPLs

and their expressly authorized representatives and agents.” SA657.

The Bankruptcy Code defines the term “entity” to include “person,”

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which in turn includes “individual[s], partnership[s], and

corporation[s].” 11 U.S.C. § 101(15), (41). Thus, if Ms. Wiener is

“aggrieved” by the fact that she is a “person” subject to an injunction,

every other natural or corporate person currently in existence would

likewise be aggrieved in that same way. The whole point of the “person

aggrieved” standard, however, is to limit the parties who can appeal a

bankruptcy court order to those who are “directly and adversely affected

pecuniarily” by that order. Johns-Manville, 843 F.2d at 641 (quotation

marks omitted). Ms. Wiener has not attempted to—and cannot—make

that showing.

Regardless of the Debtors’ financial condition at the time of the

restructuring, there is simply no connection between the relief granted

by the Recognition Order challenged on appeal and Ms. Wiener’s

pecuniary interests. The Recognition Order did not give effect to the

Schemes, which resulted in the substantial deleveraging of the Debtors,

the distribution of substantial equity to creditors, and the massive

dilution of the Debtors’ pre-reorganization shareholders. The actions

undertaken in connection with the Schemes were given effect in the

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United States via the Enforcement Order, which Ms. Weiner did not

seek to stay or object to.

What the Recognition Order did do was trigger the automatic stay

imposed under 11 U.S.C. § 1520(a), as well as enjoin specified forms of

interference with the Debtors and their property in the United States.23

That relief was premised on factual findings that recognition would be

“in the best interest of the Debtors, their estates, their creditors and

other parties in interest,” as well as “the interest of the public”; that

absent such relief, “the Debtors, their creditors and such other parties

in interest would suffer irreparable injury for which there is no

adequate remedy at law”; and that absent recognition, the Cayman

23In relevant part, the Recognition Order contains injunctions against:


“a) execution against any of the Debtors’ assets; b) the commencement
or continuation … of a judicial, administrative, arbitral, or other action
or proceeding, or to recover a claim, … against the Debtors in the
United States; c) taking or continuing any act to create, perfect, or
enforce a lien or other security interest, set-off, or other claim against
the Debtors or any of their property; d) transferring, relinquishing, or
disposing of any property of the Debtors to any entity … other than the
JPLs; e) commencing or continuing an individual action or proceeding
concerning the Debtors’ assets, rights, obligations, or liabilities to the
extent they have not been stayed pursuant to section 1520(a) of the
Bankruptcy Code; and f) terminating contracts or otherwise
accelerating obligations thereunder; provided, in each case, that such
injunction shall be effective solely within the territorial jurisdiction of
the United States.” SA657.

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restructuring “may be thwarted by the actions of certain creditors.”

SA654; SA656.

As noted, Ms. Wiener’s appeal from the Recognition Order

challenges the bankruptcy court’s conclusions regarding the location of

the Debtors’ COMI, venue, whether the Cayman provisional liquidation

and scheme proceedings otherwise qualify as “foreign main

proceedings,” and whether those proceedings are consistent with public

policy. See Br. 6-7; SA294-96; supra at 15. She has never disputed the

bankruptcy court’s findings that recognition was in the best interest of

the Debtors, creditors, other parties in interest, and the public. She has

not contested that recognition was an essential step in the Debtors’

Cayman restructuring. And she has not explained how she would

“stand[] a reasonable chance of improving [her] position,” DBSD, 634

F.3d at 93, if the Cayman proceedings were not recognized. That

inability to articulate a “direct[]” connection between the order she

challenges and her financial interests, Barnet, 737 F.3d at 243, defeats

her appellate standing, regardless of the Debtors’ financial condition.

This Court’s decision in Barnet, a chapter 15 appeal, illustrates

the fatal disconnect between Ms. Wiener’s objections to the Recognition

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Order and her pecuniary interests. The appellant in Barnet

(Drawbridge) appealed directly to this Court from a bankruptcy court

order granting recognition of an Australian liquidation proceeding. Id.

at 241. After the recognition order was entered, the debtor’s foreign

representatives filed a motion seeking discovery from Drawbridge in

connection with an investigation and pending lawsuit against certain of

Drawbridge’s Australian affiliates. The bankruptcy court granted the

discovery motion while the recognition appeal was pending. Id. This

Court held that Drawbridge lacked standing to appeal from the

recognition order itself because that order “neither name[d] Drawbridge

nor direct[ed] any relief against Drawbridge,” “[n]or [did] Drawbridge

argue that it is affected by the automatic relief provided for in 11 U.S.C.

§ 1520.” Id. at 242. The Court went on to hold that Drawbridge had

standing to appeal from the bankruptcy court’s subsequent discovery

order, which plainly “aggrieved” Drawbridge in that the order was

specifically directed to Drawbridge and authorized discovery from

Drawbridge over Drawbridge’s objection. Id. at 243.

Here, Ms. Wiener stands in the same position as Drawbridge with

respect to the Recognition Order. That order neither names her nor

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directs relief against her. To be sure, Ms. Wiener (like every other

person in the world) counts as an “entity” subject to the injunctive

components of the Recognition Order. But that was also true in Barnet,

where Drawbridge was an “entity” subject to the automatic stay that

took effect upon recognition, but still lacked standing to appeal from

recognition. See 11 U.S.C. § 1520(a) (recognition order operates as a

stay “applicable to all entities”); 11 U.S.C. § 101(15) (the term “entity”

includes “person[s]”). And there is no counterpart here to the later

discovery order in Barnet, which targeted and concededly “aggrieved”

the appellant. Ms. Wiener did not even object to the Enforcement Order

that facilitated the dilution of her alleged holdings of stock pursuant to

the Schemes, nor has she identified any other order that causes her

direct financial injury.

Similarly, although Ms. Wiener portrays In re Fairfield Sentry

Ltd., 714 F.3d 127, as a case supporting her standing to appeal, that

decision only underscores that she is not aggrieved by the Recognition

Order. Standing was not addressed or disputed in Fairfield Sentry, so

that decision certainly does not represent a blanket endorsement of

“shareholder appellate standing to contest chapter 15 … rulings.” Br.

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22; see Webster v. Fall, 266 U.S. 507, 511 (1925) (“Questions which

merely lurk in the record, neither brought to the attention of the court

nor ruled upon, are not to be considered as having been so decided as to

constitute precedents.”); A33. And it is evident why all assumed that

the appellants there (shareholders in Sentry, a Madoff feeder fund) had

standing to challenge the recognition of Sentry’s liquidation proceedings

in the British Virgin Islands: they, unlike Ms. Wiener, could identify a

pecuniary interest that the recognition order directly and adversely

affected.

As this Court’s Fairfield Sentry decision explained, before Sentry

entered liquidation, two shareholders filed a derivative action in New

York state court asserting claims against Sentry’s directors,

management, and service providers. 714 F.3d at 130-31. “Pursuant to

11 U.S.C. § 1520, recognition of the BVI liquidation as a foreign main

proceeding imposed an automatic stay on any other proceedings against

Sentry in the United States — including the derivative action.” Id. at

131. Thus, the shareholder appellants were plainly aggrieved by the

recognition order: It prevented them from pursuing a derivative action

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that, if successful, would have augmented the bankruptcy estate.24

Here, by contrast, Ms. Wiener cannot identify any way in which the

Recognition Order harms her pecuniary interests as a purported

shareholder, let alone the interests of creditors with an actual stake in

the restructuring. That failure requires her appeal to be dismissed.

II. The District Court Did Not Abuse Its Discretion In


Dismissing The Appeal As Equitably Moot.

Equitable mootness is a prudential doctrine under which a court

may dismiss a bankruptcy appeal when, even if “‘effective relief could

conceivably be fashioned, implementation of that relief would be

inequitable.’” BGI, 772 F.3d at 107 (quoting In re Charter Commc’ns,

Inc., 691 F.3d 476, 481 (2d Cir. 2012)). Through this appeal, Ms.

Wiener seeks to upend the Recognition Order, and, in turn, Ocean Rig’s

entire $3.7 billion Cayman Islands-based restructuring. Significantly,

however, Ms. Wiener did not seek a stay of the Recognition Order, and

24 As the district court noted, Fairfield Sentry differs from this case
because Sentry’s shareholders were entitled to the proceeds of the
liquidation—unlike UDW’s shareholders here, who had no prospect of
recovery. A34. Ms. Wiener tries to sow doubt about the extent of
Sentry’s liabilities, but cites no evidence that the liquidation proceeds
were insufficient to make any creditors whole, and cannot explain why
the shareholder appellants would have fought to pursue a derivative
action if they would not have shared in the recoveries.

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during the pendency of her appeal, the Schemes became effective and

fully implemented. Because granting Ms. Wiener the relief she seeks

would “unjustly upset[]” this restructuring, Charter, 691 F.3d at 481,

upon which numerous third parties have relied for over a year and

which a foreign court determined is essential to the Debtors’ continued

vitality, the district court’s dismissal of this appeal on equitable

mootness grounds should be affirmed.

A. The district court correctly applied the equitable


mootness doctrine to this chapter 15 appeal.

In challenging the district court’s dismissal for equitable

mootness, Ms. Wiener principally contends that the doctrine should not

apply to chapter 15 appeals at all. See Br. 26-30, 33-35. She is correct

about the doctrine’s origins: equitable mootness “developed judicially in

response to the particular problems presented by the consummation of

plans of reorganization under Chapter 11.” BGI, 772 F.3d at 107

(quotation marks omitted). But as the district court noted, “[c]ourts

have imported the policy from its origin in Chapter 11 to cases under

Chapters 7, 9, and 13 of Bankruptcy Code.” A35. Moreover, “[t]he

inequity of unwinding a reorganization that has been substantially

completed, and which the appellant failed to seek to stay, applies

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equally in the context of foreign reorganizations as it does to domestic

ones.” A38.

Ms. Wiener first contends that equitable mootness should not

apply outside of chapter 11 because this Court has looked to whether a

reorganization has been “substantial[ly] consummat[ed]” before

applying the doctrine, and “substantial consummation” is a term of art

defined in chapter 11. See Br. 27-28 (citing Charter, 691 F.3d at 482,

and 11 U.S.C. § 1101(2)). That argument overlooks the reality that the

“pragmatic” doctrine of equitable mootness “admits of considerable

flexibility” and “has already been accorded broad reach, without

apparent ill effect.” BGI, 772 F.3d at 107-09. Ms. Wiener has offered

no principled reason to exclude chapter 15 from its ambit.

Notably, in two recent decisions involving municipal bankruptcy

proceedings under chapter 9 of the Bankruptcy Code, the Eleventh and

Sixth Circuits both rejected the notion that the doctrine is unique to

chapter 11. The Eleventh Circuit applied equitable mootness “[b]ecause

the doctrine is driven by its principles rather than any particular

codification or arbitrary limitation,” and because it saw “no respect in

which these principles are bound to come into play any less in the

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Chapter 9 context than in the contexts of Chapters 11 or 13.” Bennett v.

Jefferson Cty., 899 F.3d 1240, 1250 (11th Cir. 2018). As the district

court here appreciated, chapter 15 is no different; the policy concerns

motivating the doctrine “appl[y] equally in the context of foreign

reorganizations.” A38.

The Sixth Circuit, for its part, specifically rejected the notion that

because equitable mootness caselaw refers to “substantial

consummation,” the doctrine is confined to chapter 11 appeals. In a

decision arising from Detroit’s municipal bankruptcy proceedings, the

Sixth Circuit explained that because “equitable mootness is a doctrine

outside of the Code entirely, … [i]t did not require, at conception, any

codified definitions of terms.” In re City of Detroit, 838 F.3d 792, 804

(6th Cir. 2016). Courts have nonetheless incorporated “substantial

consummation” into their equitable mootness doctrine as “a conceptual

means to determine the extent to which the plan ha[d] progressed.” Id.

(quotation marks omitted). Disagreeing that “the use of a codified

definition as an element necessarily places the entire non-Code doctrine

within the exclusive confines of that definition’s particular Code

chapter,” the Sixth Circuit chose to “allow[] the written definition [of

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‘substantial consummation’] to stand on its own terms.” Id. Again, that

reasoning applies squarely to chapter 15. The fact that “substantial

consummation” happens to be defined in chapter 11 is irrelevant; the

key is that the restructuring here has been “consummated” (or

“completed” or “finalized”) under any conceivable definition of that

concept, as Ms. Wiener does not dispute.

Ms. Wiener’s other arguments for chapter 15 exceptionalism fare

no better. She asserts that “Chapter 15 appeals proceed on the merits

where, as here, recognition is at issue.” Br. 28-29. But equitable

mootness was not at issue in Fairfield Sentry, the sole case she cites as

support for this proposition. The recognition determination is certainly

subject to statutory requirements and operates as a “threshold

requirement” for additional relief, Br. 29, yet the same is true of orders

confirming chapter 11 reorganization plans, see 11 U.S.C. § 1129, which

are indisputably subject to dismissal for equitable mootness. BGI, 772

F.3d at 107; see also In re Arcapita Bank B.S.C.(c), Nos. 13 Civ. 5755-56

(SAS), 2014 WL 46552, at *5 (S.D.N.Y. Jan. 6, 2014) (noting that the

doctrine “has been applied in a variety of contexts, including to appeals

from orders addressing settlements injunctive relief, leave to file

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untimely proofs of claim, class certification, property rights, asset sales,

and payment of prepetition wages” (footnotes omitted)).

Ms. Wiener also undertakes a lengthy effort to distinguish then-

District Judge Sotomayor’s application of equitable mootness in Allstate

Insurance Co. v. Hughes, 174 B.R. 884 (S.D.N.Y. 1994), a case decided

under the predecessor to chapter 15 (former 11 U.S.C. § 304), where a

creditor appealed a permanent injunction enforcing provisions of a

foreign Scheme of Arrangement. Ms. Wiener seizes on Judge Koeltl’s

errant description of that decision as a case from this Court, see Br. 25

(citing A35), but the ensuing analysis in his dismissal order in no way

turned on whether Allstate constitutes binding or persuasive authority.

Although Ms. Wiener contends otherwise, Allstate indisputably applied

equitable mootness to an appeal from injunctive relief supporting a

foreign restructuring, as the court held “it would be inequitable … to

hear th[e] appeal; it is moot.” Allstate, 174 B.R. at 891. But cf. Br. 25

(incorrectly asserting that Allstate “did not … dismiss the appeal before

it on mootness grounds”).

Ms. Wiener then points to differences between former § 304 and

the standard for recognition under chapter 15, but those differences

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have nothing to do with the question here: whether equitable mootness

applies to appeals from U.S. bankruptcy court injunctions ancillary to

foreign restructuring proceedings. When it comes to the recognition of

foreign proceedings, chapter 15 certainly reflects a “more rigid …

standard” than that under former section 304, under which “all relief …

was discretionary and based on subjective, comity-influenced factors.”

In re Bear Stearns High Grade Structured Credit Strategies Master

Fund, Ltd., 389 B.R. 325, 332-34 (S.D.N.Y. 2008). The issue here,

however, is not the place of comity in the recognition analysis, but

whether comity should counsel hesitation in permitting appeals that

could unsettle foreign restructurings.

That latter comity consideration applies to chapter 15 just as it

did to former section 304. See In re Agrokor d.d., No. 18-12104, __ B.R.

__, 2018 WL 5298403, at *15 (Bankr. S.D.N.Y. Oct. 24, 2018) (“Many of

the principles—particularly comity—that were applied in ancillary

proceedings under section 304 were carried forward and apply today in

Chapter 15 cases.”). Allstate and the district court here properly

recognized that “concerns of comity” mean that U.S. courts should be

especially reluctant to entertain appeals that could unsettle a

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completed foreign restructuring. Allstate, 174 B.R. at 890; A39. Indeed,

principles of comity are “central to Chapter 15” and Congress’s

instructions for how to interpret that enactment. A39 (internal

quotation marks omitted); see also 11 U.S.C. § 1508; Royal & Sun

Alliance Ins. Co. v. Century Int’l Arms, Inc., 466 F.3d 88, 92-93 (2d Cir.

2006) (finding that “[a] foreign nation’s interest in the ‘equitable and

orderly distribution of a debtor’s property’ is an interest deserving of

particular respect and deference”). Comity thus provides yet another

reason that equitable mootness has at least as much of a place in

chapter 15 appeals as it does in appeals under other chapters of the

Bankruptcy Code. Cf. Bennett, 899 F.3d at 1250 (because “concerns

about finality, reliance and equity will be at play” in both chapter 11

and chapter 9, there is no reason why a creditor “should be able to avoid

equitable mootness merely because the bankruptcy proceedings happen

to be under chapter 9”).25

25Moreover, principles of comity were considered by the bankruptcy


court in determining the scope of relief to be granted in connection with
recognition and in its consideration of issuing the Enforcement Order,
to which Ms. Wiener failed to object. See SA655-56 ¶ J; SA877 ¶ 9.

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B. The district court did not abuse its discretion in


concluding that all relevant factors support the
doctrine’s application.

In dismissing Ms. Wiener’s appeal as equitably moot, the district

court heeded this Court’s prior applications of the doctrine. First, the

district court considered whether the reorganization had been

“substantially consummated,” such that there would be a “strong

presumption” that the appeal is moot. A36; accord, e.g., In re MPM

Silicones, LLC, 874 F.3d 787, 804 (2d Cir. 2017). The district court

recognized that this presumption could be rebutted upon a sufficient

showing of several factors, including whether “the appellant pursued

with diligence all available remedies to obtain a stay of execution of the

objectionable order.” A36 (quoting In re Chateaugay Corp., 10 F.3d 944,

953 (2d Cir. 1993) (Chateaugay II)). The district court found that Ms.

Wiener did not seek a stay of the recognition order and that “the

debtors’ positions have comprehensively changed” as a result of the

restructuring’s finalization “because the debtors have issued new equity

and made cash distributions to creditors and entered into a new secured

debt facility, as well as a long-term management … agreement.” A38.

The district court did not abuse its discretion in applying the

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Chateaugay II framework to the facts of this case and concluding that

the appeal is equitably moot.

On this appeal, Ms. Wiener focuses the bulk of her attention on

the threshold question of whether equitable mootness applies in chapter

15, and only barely addresses the district court’s exercise of discretion

in determining her appeal was moot. Notably, apart from her meritless

argument that “substantial consummation” is a concept unique to

chapter 11, see supra at 45-48, she does not challenge the district court’s

factual finding that the restructuring here “has been substantially

completed” as of September 22, 2017, such that “the debtors’ positions

have comprehensively changed.” A38; see also BGI, 772 F.3d at 110

(“‘Determining whether a plan has been substantially consummated is a

question of fact ….’” (quoting 7 Collier on Bankruptcy ¶ 1101.02[2] (16th

ed. 2009)). Her remaining arguments fail to demonstrate that the

district court’s finding of equitable mootness rested on legal error or fell

outside “the range of permissible decisions.” Huebner v. Midland Credit

Mgmt., Inc., 897 F.3d 42, 53 (2d Cir. 2018).

Ms. Wiener starts by mischaracterizing the district court’s opinion

as “treat[ing] [her] appeal as per se equitably moot without examining

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the actual effects of the requested relief.” Br. 30; see also Br. 35

(faulting district court for “not considering the actual effects of

assessing the appeal on the merits”). The district court did no such

thing. Its holding was grounded in the particulars of this case—

specifically, the facts that the restructuring was consummated in

September 2017, that Ms. Wiener failed to request a stay, and that her

appeal seeks to “unwind[]” that reorganization. A38.

In that regard, the district court was not required to defer to Ms.

Wiener’s unsupported assurances that the relief she requests “does not

disturb the Cayman schemes of arrangement.” SA83. As Appellees

have explained, the entry of a Recognition Order was an express

contractual condition precedent to the Schemes. See SA675-76; SA736-

37; SA773-74, SA813-14 § 4.1; see also Allstate, 174 B.R. at 890 (finding

bankruptcy appeal to be equitably moot after noting that “creditors

approved the Scheme only on the condition that the U.S. Bankruptcy

Court issue [a] permanent injunction,” such that relief modifying the

injunction could “call into question the validity of a Scheme”). Further,

the bankruptcy court’s Enforcement Order premised the relief it

granted upon several statutory provisions, each of which requires a

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grant of recognition in order to be triggered. SA875-81 (citing 11 U.S.C.

§§ 1507, 1509(b)(2)-(3), 1517(d), 1521(a)). In other words, without the

Recognition Order, the bankruptcy court would not have been able to

issue the Enforcement Order, which gave the Schemes full force and

effect in the United States. And without the Enforcement Order, the

Debtors would be at risk of hostile creditor actions in the United States.

Those case-specific realities informed the district court’s sound exercise

of discretion in finding the appeal to be equitably moot.

Ms. Wiener then attempts to downplay the significance of her

failure to seek a stay, which distinguishes this case from the precedents

she accuses the district court of disregarding. See Br. 30 (citing

Chateaugay II and Charter). Chateaugay II makes clear that where (as

here) a restructuring has been substantially consummated, an appeal

should be dismissed as moot unless five specified circumstances “all …

exist,” one of which is the appellant’s having acted diligently to stay the

order on appeal. 10 F.3d at 953.26 And Charter reiterated that “all five

26The remaining four factors are whether: “(i) effective relief can be
ordered; (ii) relief will not affect the debtor’s re-emergence; (iii) relief
‘will not unravel intricate transactions’; [and] (iv) affected third-parties
are notified and able to participate in the appeal.” MPM Silicones, 874
F.3d at 804. Here, Appellees’ motion to dismiss addressed these factors,

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[of the] ‘Chateaugay factors’” must be met to overcome the presumption

of equitable mootness. 691 F.3d at 482. Most recently, in MPM

Silicones, the Court again noted that the five Chateaugay factors must

all be met to rebut the presumption of mootness, and emphasized that

the “chief consideration under Chateaugay II is whether the appellant

sought a stay of confirmation.” 874 F.3d at 804.

Ms. Wiener’s only response is to assert that a stay was

unnecessary because “as a practical matter, the status quo was

preserved pending adjudication [on] appeal,” in that “the injunction[]

challenged on appeal remain[ed] in force during the course of the

appeal.” Br. 31. But the entire point of seeking a stay is to prevent the

injunction challenged on appeal from going into effect. Because Ms.

Wiener took no action to delay the Recognition Order’s effectiveness, the

status quo completely changed: The Cayman court approved the

Schemes, the bankruptcy court issued an Enforcement Order granting

see SA24-26, and the district court ultimately found that it would be
inequitable to “unwind[]” the numerous transactions that took place
when the restructuring became effective, A38. Ms. Wiener alluded to
these factors only obliquely in the district court, maintaining
(incorrectly) that the relief she requests would not disturb the Schemes.
See SA83. Her brief in this Court does not address these factors at all.

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the Schemes full force and effect, the restructuring became effective,

and pursuant to the Schemes, the Debtors canceled existing debt, made

distributions of cash and equity, issued new notes, and entered into

important new agreements. See A39; see also supra at 18-19. Those

developments precluded Ms. Wiener from rebutting the presumption of

mootness not just because she failed to seek a stay, but also because

changed circumstances made it impossible for the court to afford

effective relief without the risk of “unraveling intricate transactions.”

A37 (quoting Chateaugay II, 10 F.3d at 952-53); cf. In re Zenith Elecs.

Corp., 329 F.3d 338, 346 (3d Cir. 2003) (finding no equitable mootness

where the appellant sought to disgorge “$76,500 in professional fees, a

tiny sum in the context of the reorganization of a company valued at

$300 million,” relief that would not cause the reorganization “to

unravel”).

Finally, Ms. Wiener argues that the district court erred by

dismissing the appeal without also ruling on its merits, emphasizing

that the court stayed merits briefing while the motion to dismiss was

pending. See Br. 32-33. She fails to mention, however, that the district

court stayed the merits briefing as an accommodation to her, so that she

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would not have to “worry about filing the initial brief on the appeal”

while she was preparing her opposition to Appellees’ motion to dismiss.

A17. In any event, “[a]s [this Court’s] precedent makes clear, the

doctrine of equitable mootness permits a court to decide whether an

action should be dismissed before reaching the underlying merits of the

appeal.” In re Fiorano Tile Imports, Inc., 619 F. App’x 33, 34 (2d Cir.

2015) (summary order) (citing Charter, 691 F.3d at 484, and In re

Chateaugay Corp., 988 F.2d 322, 325 (2d Cir. 1993)); accord, e.g., In re

Transwest Resort Props., Inc., 801 F.3d 1161, 1167 (9th Cir. 2015); In re

BGI, Inc., No. 12cv7714 (ALC), 2013 WL 10822966, at *10 (S.D.N.Y.

May 22, 2013), aff’d, 772 F.3d 102 (2d Cir. 2014). The fact that district

courts sometimes choose to include alternative holdings on the merits

after finding an appeal to be equitably moot, e.g., Allstate, 174 B.R. at

891, does not mean that courts are obligated to do so.

58
Case 18-1374, Document 69, 11/13/2018, 2432558, Page68 of 69

CONCLUSION

This Court should affirm the district court’s judgment dismissing

the appeal.

Respectfully submitted,

/s/ Evan C. Hollander


Kelsi B. Corkran Evan C. Hollander
ORRICK, HERRINGTON & Daniel A. Rubens
SUTCLIFFE LLP Emmanuel Fua
1152 15th Street NW ORRICK, HERRINGTON &
Washington, DC 20005 SUTCLIFFE LLP
51 West 52nd Street
New York, NY 10019
(212) 506-5000

Counsel for Debtors-Appellees

November 13, 2018

59
Case 18-1374, Document 69, 11/13/2018, 2432558, Page69 of 69

CERTIFICATE OF COMPLIANCE

This brief complies with the type-volume limitation of Local Rule

32.1(a)(4) because this brief contains 11,735 words, excluding the parts

of the brief exempted by Fed. R. App. P. 32(f).

This brief complies with the typeface requirements of Fed. R. App.

P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6)

because this brief has been prepared in a proportionally spaced typeface

using Microsoft Word 2013 in Century Schoolbook 14-point font.

ORRICK, HERRINGTON & SUTCLIFFE LLP

/s/ Evan C. Hollander


Evan C. Hollander
Counsel for Debtors-Appellees