Bradley, in the matter of Astora Women's Health, LLC v Astora Women's Health, LLC

The court was presented with an interim application for a stay pending recognition of a foreign proceeding as a foreign main proceeding, pursuant to the Cross-Border Insolvency Act 2008 (Cth) and the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law (UNCITRAL). The applicant, the Foreign Representative, sought this relief in relation to a United States (US) bankruptcy proceeding involving Astora Women’s Health, LLC. The primary legal issues to be determined were whether the US bankruptcy proceeding was likely to be recognised as a foreign main proceeding at the final hearing, and whether interim relief was necessary to protect the assets of the debtor or the interests of the creditors.

The court considered the likelihood of recognition of the US bankruptcy proceeding as a foreign main proceeding, focusing on the requirements of the Model Law. It was satisfied that the US Chapter 11 proceeding was analogous to an Australian voluntary administration and that there were no grounds under the Model Law to preclude its recognition. The court also examined the necessity of interim relief, noting the material risk that the assets of the company might be diminished. Given the strength of the Foreign Representative’s case for recognition and the urgent need to protect the assets and interests of creditors, the court granted the interim relief sought.

The court's reasoning was grounded in the provisions of the Model Law, particularly Article 19, which allows for provisional relief to be granted where urgently needed to protect the assets of the debtor or the interests of the creditors. The orders made by the court included a stay on any and all execution against the assets of Astora Women’s Health, LLC, and restrictions on the transfer or encumbrance of its assets. The court also directed the Foreign Representative to publish notice of the filing of the application for recognition of the foreign proceeding in specified newspapers and to distribute the notice to known claimants and applicants in related proceedings.

In summary, the court granted the interim relief sought by the Foreign Representative, recognising the likelihood of the US Chapter 11 proceeding being recognised as a foreign main proceeding, and the urgent need to protect the assets and interests of the creditors.