United States District Court, D. New Jersey, Camden Vicinage
IN RE MANLEY TOYS LIMITED, Debtor in a Foreign Proceeding. ASI, INC., Appellant,
FOREIGN LIQUIDATORS, et al., Appellees.
HELLRING LINDEMAN GOLDSTEIN & SIEGAL LLP Richard B.
Honig, Esq. Matthew E. Moloshok, Esq. and WEISBROD MATTEIS
& COPLEY PLLC Stephen A. Weisbrod, Esq. Counsel for
& GREINER PC Stephen M. Packman, Esq. Douglas G. Leney,
Esq. And GOODWIN PROCTOR LLP Daniel M. Glosband, Esq. Counsel
RENÉE MARIE BUMB, UNITED STATES DISTRICT JUDGE.
March 22, 2016, Manley Toys Limited (“the
Debtor”) commenced a creditors' voluntary
liquidation in Hong Kong, pursuant to Hong Kong law. Mat Ng
and John Robert Lees were appointed as liquidators
(“the Liquidators”), and on the same day, the
Liquidators filed a Chapter 15 case and motion in the United
States Bankruptcy Court for the District of New Jersey. The
Bankruptcy Court granted the motion, and recognized the Hong
Kong liquidation as a “foreign main proceeding, ”
11 U.S.C. § 1502(4) (“the Recognition
Decision”). Aviva appealed that decision to this Court,
and this Court recently affirmed the Recognition Decision in
its entirety. See In re Manley Toys Ltd., 597 B.R.
578 (D.N.J. 2019).
presently appeals from the Bankruptcy Court's subsequent
denial of relief from the provisional stay that the
Bankruptcy Court imposed in connection with the Chapter 15
petition. Also before this Court is Aviva's application
to “supplement the record on appeal.” For the
reasons stated herein, the Court will remand the case for
further proceedings consistent with this Opinion.
Court's opinion affirming the Bankruptcy Court's
Recognition Decision should make apparent, this case is
factually, legally and procedurally complex. Thus, the Court
will not repeat the lengthy discussion of the facts set forth
in the previous Opinion which is available at In re
Manley Toys Ltd., 597 B.R. 578 (D.N.J. 2019).
to the instant appeal, on the same day that the Liquidators
filed the Chapter 15 Petition with the Bankruptcy Court, the
Liquidators moved for provisional relief, including a
provisional stay pursuant to 11 U.S.C. §§ 362 and
1519(a). Aviva opposed the motion. After holding a
hearing on the matter, on April 1, 2016, the Bankruptcy Court
granted provisional relief in relevant part as follows:
[p]ursuant to 11 U.S.C. §§ 362 and 1519(a)(1), all
persons and entities are stayed, without limitation, from the
commencement or continuation of any and all litigation by,
against or with respect to the Debtor, including, but not
limited to, the litigation identified in the Verified
Petition (the “Litigation Claims”) and any other
actions, motions, discovery, trials and proceedings, and
including the enforcement of any claims, causes of action,
judgments, writs of execution, levies, garnishments or
attempt of enforcement or relief against the Debtor, or
against any property of the Debtor, in the United States and
from any act to obtain possession of, exercise control over,
transfer, dispose of or encumber property of the Debtor in
the United States, including, but not limited to, the U.S.
Assets, or take any other actions with respect to assets of
the Debtor, absent Court approval. For purposes of this
Order, the term “US Assets” shall mean all of the
Debtor's assets of any kind in the United States.
(Bankruptcy Docket 16-15374-JNP (“Bankr.
Docket”), Docket No. 18)
September 13, 2016, Aviva moved the Bankruptcy Court for
relief from the Provisional Stay Order. (Bankr. Docket No.
144) The Bankruptcy Court held a hearing on September 27,
2016, and on October 25, 2016 entered an order in part
granting and in part reserving decision on Aviva's
motion. (Id. at Docket No. 159) Most relevantly to
the instant appeal, in the Order, the Bankruptcy Court
reserved decision on “whether Aviva may seek injunctive
sanctions against Manley for violating the Minnesota Federal
Court's post-judgment discovery orders or to compel
compliance with such orders, ” and “whether the
Liquidators are estopped from arguing that this Chapter 15
proceeding or the Hong Kong ‘liquidation' prohibit,
limit or otherwise affect such alter ego claims.”
(Bankr. Docket No. 159, p. 4 of 5)
noted by the Bankruptcy Court, “[t]hereafter between
October 2016 and May 2017, . . . several additional briefs
[were filed] on the matter.” In re Manley Toys
Ltd., 2018 WL 1071167 at *1 (Bankr. D.N.J. Feb. 23,
2018). As set forth in the Bankruptcy Court's
opinion addressing the remainder of Aviva's Stay Relief
Motion, the relief Aviva sought was multifaceted and broad.
The Bankruptcy Court ultimately granted in part and denied in
part the remainder of Aviva's motion. Id.
timely appealed the Bankruptcy Court's Stay Relief Order
to this Court on February 28, 2018. On March 12, 2019--over a
year after the appeal was filed-- Aviva sought relief from
this Court to “supplement the record on appeal.”
Specifically, Aviva has asked this Court to consider two
exhibits: (1) a February 18, 2019 letter from Liquidator Matt
Ng notifying creditors, including Aviva, of a “Proposed
Settlement” between the Debtor and Toy Quest Ltd.; and
(2) Aviva's written objection to the Proposed Settlement,
dated March 1, 2019.
response to Aviva's application, this Court issued an
Order to Show Cause “why this Court, sitting as an
appellate court reviewing the Bankruptcy Court's
decision, has jurisdiction to consider evidence that was not
before the Bankruptcy Court when it rendered that
decision.” (District Court Docket 18-2836, Docket No.
35; District Court Docket 18-2838, Docket No. 33) Both ...