King, in the matter of Zetta Jet Pte Ltd

The case involves an application by a United States Chapter 7 Trustee for recognition in Australia of a foreign non-main proceeding. The applicant, King, seeks recognition of a Chapter 7 bankruptcy proceeding against Zetta Jet Pte Ltd, a defendant, in the United States Bankruptcy Court for the Central District of California. The application was heard in the Federal Court of Australia.

The legal issues before the court were whether the United States Chapter 7 bankruptcy proceeding should be recognised as a foreign non-main proceeding under the Cross-Border Insolvency Act 2008 (Cth) and the UNCITRAL Model Law on Cross-Border Insolvency. The court had to determine the date on which the establishment of the foreign proceeding should be assessed and the implications of such recognition for Australian law.

The court held that the United States Chapter 7 bankruptcy proceeding should be recognised as a foreign non-main proceeding. It found that the date of establishment of the foreign proceeding should be assessed based on the date the Chapter 11 proceeding was filed, rather than the date of conversion to a Chapter 7 proceeding. The court determined that recognising the foreign proceeding would have the same effect as if Zetta Jet had been made the subject of a winding up under Australian law. The court also granted various orders to the Chapter 7 Trustee, including the power to administer and realise Zetta Jet’s assets in Australia and to appoint a local representative.

The court made several orders to facilitate the recognition and enforcement of the foreign proceeding in Australia. These included recognising the foreign proceeding, staying individual actions and proceedings concerning Zetta Jet’s property, suspending the right to transfer or encumber Zetta Jet’s property, and granting the Chapter 7 Trustee powers similar to those of a liquidator under Australian law. The court also imposed specific restraints on Linkage Access Limited concerning the yacht "Dragon Pearl."