### INTHE UNITED S TATESCOU RT OFAPPEALS FORTHEFIFTH CIRCU IT

N o. 09- 20288 In th e M a tt e ro f: YU VA L RA N , D ebtor

Z U R IE L LAV IE , Appe l l ant
v. Y U VA LRA N , A pp el l ee

A p p ea lf

rom the U n i tedS tates D i stri ct C ou rt f or th e Sou t h ern D i st ri ctof T exas B ef ore S T E W A R T , D E N N IS, an d H AY N E S , C i rcui tJu dg es . C A R L E . ST E W A R T , C i rcui tJu dg e: I n a m at t erof

f i r sti m pre ss i on be f

or e thi s c our t , Zuri el Lavi e (“ Lavi e” ) , an Is rael iban kru ptcy r eceiver, app eal s th e di st ri ctcourt ’ s den i alof hi s pet i t i on f

or recogni t i on un der C h ap t er 15 of the B an kru ptcy C ode of an ong oi n g, i n vol u n t ary b a n k ru p tcy p roce ed i n g p en d i n g inIsrae l , f or d eb tor Y u va lR a n (“R a n ”) . In pa r t i c ul ar , t he pe t i t i o n s o ugh tr e c o gnit i o n o f t he I s r ae l ib ank r upt c y pr o c e e di ng United States Court of App eals

Fifth Circuit 

### F I L E D May 27, 2010 Lyle W . Cayce Clerk Case: 09-20288 Document: 00511124097 Page: 1 Date Filed: 05/27/2010N o. 09- 20288

2 a s afo r e ig n m a in o rn o n m a in p r o c e e d in g . If g r a n te d , th a t r e c o g n itio n w o u ld h ave en t itl e d Lavi e t o t h e prot ect i on s of a vari et y of

B an kru ptcy C ode p rovi si on s. F o rth e r e a s o n s d is c u s s e db e lo w , w e a ff ir m t h e d is t r ic tc o u r t ’s d e n ia l o f L a v ie ’s petit i on f

or r ecognit i on un der C h ap t er 15 of th e B an kru ptcy C ode. I . F A CT UA L A ND P ROC E DUR A L B A CK GRO UND Ra n w as aw e l l

- kno w n I s r ae l ib us i ne s s m an andpr o m o t e rw he n he en coun t ered f

i n an ci ald if

f i cul t i es i n the l ate 19 90’ s. In fact , he w as a di rect or or sha rehol der i n al m ostone h u n dred Isr ael icom p a n ies , som e of t h em pub l i c l y- t r ad e d. The l ar ge s t c o m pa ny i n w hi c h Ran had a c o nt r o l l i ng i n t erest w a s Is ra e l C re d it L in e s S u p p lem e n ta ryF in a n cia l S e rv ice s L td . (“C re d it L in e s”), ap u b l i cc o mp a n yt h a twa s c o - f o u n d e db yR a n a n df o rwh i c h h e s e rv e da s C EO . C r e d it L in e s ra is e dm illio n s o f d o l l a r s fr o m in v e s to r s a n do w n e din te r e s ts in n u m e r o u s o th e rco m p a n ie s . Itis n o w inliq u i d a t i o n th r o u g h a n Is r a e li ban kru ptcy proc eedi n g, an d i t s r eceiver ha s asser t ed cl aim s aga i n stR an f or m i l l i on s of

dol l ars i n dam ages. O n Ju n e 16, 199 7 , a n in v o l u n t ary ban kru ptcy proceedi n g w as com m en ced aga i n stR an , i n t h e I sraeli D i st ri ctC ou rtof T el Aviv-Ja ffa . L a vie w a s i n i ti a l l y a p p oin tedas tem p ora ryre ceive r o f R a n ’ s as sets an d l ater , on N ovem ber 28, 199 8, L avie w as app oi n t ed p erm an en trec eiver. I n A pril1997, be f or e the i nvol untary bankr upt c y proce edi ng w as com m en ced, R an l ef

tI sraelan d h as nev er r et u rned . A f t er l eaving, R an m oved t o H ou st on , T exas, i n M ay or Ju n e of 199 7, w h ere he an d h i s fam i l y h ave si n ce r e s i de d c o nt i nuo us l y. Ran ’ s wif ea n df iv ec h il dr e n a r e U ni t e d St at e s c i t i z e ns , a nd Ran i s al e ga lpe r m ane ntr e s i de nto f t he U ni t e d St at e s a nd i s c ur r e nt l y s e e ki ng U n i t ed S t ates cit i zensh i p. R an an d h i s w i fe o w n a hom e i n H ou st on an d are both em p l oy ees of

a f urni t ure c om pany i n t he ar ea. Af t erl eavi ng I sr ael , R an t e m po r ar i l y as s i s t e d i n c o l l e c t i ng de bt s o w e d t o Cre ditLi ne s , b utc e as e d d o i ng sowhe n r e c eiver shi p and l i qui dat i on pr oc ee di ngs bega n f orC r editLi nes i n 1998. Case: 09-20288 Document: 00511124097 Page: 2 Date Filed: 05/27/2010N o. 09- 20288

3 C u rrently, R an carr i e s out n o bu si n ess act ivi t y i n I srael , an d h as not don e so s in c e 1 9 9 8 . O n D e c e m b e r1 1 , 2 0 0 6 , n e a r lyad e c a d e a fte rR a n a n d h is fa m ily em i grated f

rom I sraelan d m ore th an ei gh tyears af t er bei n g ap poi n t ed receiver o f R a n ’ s e s ta te , L a v ie file dap e tit io n s e e k i n gr e c o g n itio n o f th e Is r a e li ban kru ptcy proc eedi n g as a f orei gn m ai n or n on m ai n proceedi n g u n der C h ap t er 15 of t h e B an kru p t cy C ode i n t h e U . S . B an kru ptcy C ou rtf or th e Sou t h ern D i s t r i c to f

Te xa s . O n M ay 22 , 20 07 , t he Bankr upt c y Cour tde ni e d the pe t i t i o n. T h e B an kru ptcy C ou rt ’ s or der w as t h e subj e ct o f tw o app eal s t o t h e di st ri ct c o ur t , t h e f

i r s tr e s ult i ng i n ar e m andf o ra ddit i o nalf

i ndi ngs a nd the s e c o nd r e s u ltin gina n o r d e ra ffir m in gth e d e n ia l o f L a v ie ’ s p e tit io n fo r r e c o g n itio n . T h is a p p e a l fo llo w e d . I I . DI S CU S S I ON A . St andard of

R evi ew
“W e r evi ew a di st r i c tc our t ’ s af f i r m anceof

a ba nkrupt c y c our tdec i si on by ap plyi ng t he s am e s t and ar d of re vi e w t o t he bank r upt c y c o ur tdec i s i o n t hatt he d i stri ct cou rt ap p l i ed . ” In reMart i n ez , 5 6 4 F . 3 d7 1 9 , 7 2 5 -26 (5th C i r. 20 0 9 ). “W e t hus g e ne r all y r e vi e w fac t ualf i ndi ngs f

o rc l e are r r o ra nd c o nc l us i o ns o f l aw de n ov o.” I d. at726 ( quot i ng In reO C A , I n c. , 5 5 1 F .3d3 5 9 , 3 6 6 ( 5 t h C ir . 2 0 0 8 )) (i n t e r n a l q u o t a t io n m a r k s o m it t e d). W h il e a d e t e r m in a t io n o f w h e t h e rR a n ’s bankrupt c y pr oc ee di ng i s a f or ei gn m ai n ornonm ai n pro c ee di ng i s i nhere nt l y a fac t - dr ive n i nquir y, t he fac t s i n t hi s ca s e ar e noti n di s put e and t he appe alt o t he d is tr ic t c o u r t w a s d e n o v o , a s is t h e a p p e a l t o t h is co u r t. S e e, e . g . , I n reB e ls o me , 4 3 4 F .3 d7 7 4 , 7 7 6 (5 th C ir . 2 0 0 5 ); seealso , W i l l i am H . S chrag, W i l l i am C . H eu er, & R o b e r t E . C o r te s , C ross - B order I n sol venci es an dCh ap t er 15:R ece n tU. S . Case L aw D et erm i n i ng W h et h er a F

oreign Proceed ingI s “ Main” or”

Non m ain” or Nei t h er , 1 7 J . B ANKR . L . & P RA C . 5 , a r t . 4 (Aug. 2 00 8) (no t i ng t hat“ [t] he Case: 09-20288 Document: 00511124097 Page: 3 Date Filed: 05/27/2010N o. 09- 20288

4 d eterm i n a ti on of w h eth er a f ore i gn pr o c e e d i n g is ‘ m a i n ’or ‘ n on m a i n ’i s fa ctd r iv e n ”). B . C h ap t er 15’ s Fram ew ork Th e Bank r upt c y Abu sePre vent i on and C ons um er Prot ec t i on A c t of 2005 (“ BA PC PA” ) e nac t e d Chap t e r1 5 o f t he Bankr upt c y Code , “ so as t o pr o vi de ef fec t ive m ec hani sm s f ordeali ng w i t h ca se s of c r os s- bor deri n solve ncy. ” 11 U . S. C. § 1 5 0 1 ( a ) . I tr e p l a c e df o r m e rS e c t i o n 3 0 4 o f t h e Ba n k r u p t c yCo d e a nd

“i nco r por at e[ s] t he M ode lLaw on Cros s- B ord er I nso lvenc y” dr af t ed by U N C ITRA L , th e U n itedN a tion s C o m m iss ion on I n t erna ti on alT rade L aw , w h ich i n t u rn, i s based u pon t h e E u ropean U n i on C o n v e n t i on on Insolven cy P r o c e e d in g s (th e “E U C o n v e n tio n ”). S ee1 1 U .S .C . § 1 5 0 1 (a) e ts e q. ; seea lso I n re Tr i
- Cont i ne n t al Exch. Lt d. , 3 49 B. R. 6 27 , 6 33
- 34 ( Bankr . E. D . Cal . 2 00 6) . The s ta tu t o r yi n t e n t t o co n fo r m A m e r ic a n la w w ith in te r n a tio n a l la w is e x p lic it in t h e t ext of

Secti on 150 1( a) , an d als o i s expressed i n Secti on 150 8, w h i ch st ates t hat“ [i] n i nt er pre t i ng t hi s c hapt er , t he c our ts hal lc ons i derit s i nt er nat i onal o r i gi n, a nd t he ne e d t o pr o m o t e an ap pli c at i o n o f t hi s c hap t e r t hat i s c o ns i s t e nt w i th th e a ppl i c at i on o f s i m i l ars t at ut es adopt ed byf or ei gn j uri sdi c t i ons . ” 11 U .S .C . § 1 5 0 8 ; seealso H o us e Rep o r to n t he Bankr upt c y Abus e Pr e ve nt i o n a nd C o n su m e r P ro te ctio n A ct o f 20 0 5 , H .R . R e p . N o . 1 0 9 -3 1 , p t. I, at 1 0 5 (20 0 5 ), r e p r i n t e di n 200 5 U . S . C . C . A . N . 88, 169 (“ [ C h ap t er 15] i n corporat es th e M odel L aw on C ross - B order I n solven cy t o encou rage cooperati on betw een t h e U n i t ed S ta te s a n dfo r e ig n co u n tr ie s w ith re s p e c t t o tr a n s n a tio n a l in s o lv e n c yca s e s . . .

. [her ei naf

ter “H ou se R epo r t” ] ; 8 A LANN . R ES NI CK& H ENRYJ . S OMMER, C OLL I ER ON B ANKRUP T CY § 150 1. 01 (15t h ed. rev. 200 8) ( exp l ai n i n g t h e basi s f or C h a p te r 1 5 ). An o n -e x h a u s t iv e li s to f r e li e f a v a il a b le to afo r e ig n p r o c e e d in g ’s r e pr e s e nt at ive i n a Chapt e r 15 c as e i nc l ude s : ( 1) an aut o m at i c s t ay of act i o ns a ga i n st th e d eb tor u n d er B a n k ru p tcy C od e S ection3 6 2 ; (2) th e a b i l i ty to op era te Case: 09-20288 Document: 00511124097 Page: 4 Date Filed: 05/27/2010N o. 09- 20288

5 t he de bt o r ’ s b us i ne s s ; ( 3) e xa m i nat i o n o f w i t ne s s e s ; and ( 4) t he e nt r us t i ng o f t he ad m i n i st rat i on of

t h e debtor’ s U n i t ed S t ates asset s t o t h e f orei gn re pr e sentative. S ee generall

y 1 1 U .S .C . § 1 5 2 0 (a )(1 )-(3 ); s e ea ls o id . § 151 9( a) ( 1)

- ( 3) . I n order f or a f o r e i gn pr o c e e di ng t o ga i n r e c o gnit i o n w i t hi n t he f r am e w o r k o f

Chapt e r1 5, t he fol l ow i n g p rere q u i sit es m u st be m et: ( 1) such for ei gn proceedi n g f or w h i ch recogni t i on i s s ou gh ti s a f o r e i gn m ai n pr o c e e di ng o rf o r e i gn no nm ai n pr o c e e di ng w i t hi n t he m eani ng of

s ec t i on 1502; ( 2) t h e f orei gn representat ive ap pl yi n g f or r ecognit i on i s a person or bo dy ; a nd ( 3) t he pet i t i on m ee t s t he r equi r em ent s of s ec t i on 1515. 1 1 U .S .C . § 1 5 1 7 (a ); s e eals o I n reBe t c o r

p Lt d, , 4 0 0 B . R. 2 6 6 , 2 8 5 ( Ba n k r . D. N e v . 2 0 0 9 ). T hi s s t at ut o r y m and at e i s s ubj e c tt o ana r r o w pub l i cpo l i c y e xcepti on w h i c h p e r m its aco u r t t o re fu s e re c o g n itio n “if th e a c tio n w o u ldb e m a n ife s tly c o nt r ary t o t he pub l i cpo l i c y o f t he U ni t e d St at e s . ” 1 1 U . S. C. § 1 506. But , t he excepti on i s i n t en dedt o be i n vok ed on l y u n der e x ce p t i on alcircum st an ces c o n c e r n in g m a tt e r s o f fu n d a m e n ta l im p o r ta n c e fo rth e U n ite dS ta te s . S ee In re Ii d a, 377 B . R . 243 ( 9t h C i r . B A P 2007) ; In reA tla sS h ipp ingA / S, 404 B. R . 726 (B a n k r . S .D .N .Y . 2 0 0 9 ); In reE r n s t & Y o u ng, In c ., 3 8 3 B. R. 7 7 3 , 7 8 1 ( Ba n k r . D. C ol o. 200 8) . N evert h el ess, rec ogn i t i on un der S ect i on 1 5 1 7 o f the B an kru ptcy C ode i s not a “ r ubber st am p ex ercise. ” In reB asi s Yie l dA l ph a Fu n d(

Mast er) , 38 1 B. R. 3 7, 4 0 ( Bankr . S. D . N . Y. 2 00 8) . Eve n i n t he a bs e nc e o f a n o bj e c t i o n, c o ur t s m us tund e r t ak e t he i ro w n j uri sdi c t i o nala nalys i s a nd gr anto rde ny r e c o g n itio n u n d e r C h a p te r1 5 a s th e fa c ts o f e a c h ca s e w a r r a n t. Se eI n reBe ar St e ar nsHigh- G r adeSt r uc t ur e d Cr e di tSt r at eg i e sMas t e rFund, Lt d. , 3 8 9 B. R. 325 , 335 ( S . D . N . Y . 200 8) . Th e ul t i m ate bu rden of proof on t h e requi rem en t s of r e c o g n itio n is o n th e fo r e ig n re p r e s e n ta tiv e . S e eid . a t 3 3 4 . Case: 09-20288 Document: 00511124097 Page: 5 Date Filed: 05/27/2010N o. 09- 20288

6 A l t h ou gh l i st ed as t h e t h i rd el em en t , t h e f i rstrequi rem en tf

or r ecognit i on u n der S ect i on 151 7 i s pu rely procedu ral in n ature; t h at i s, t h e petit i on m u st m e e t t h e p le a d in gre q u ir e m e n ts o f S e c tio n 1 5 1 5 . S ee1 1 U .S .C . § 1 5 1 7 (a)(3). Sec t i on 1515 es t abl i she s se ver alpl eadi ng r equi r em ent s. F i r st , i trequir es t hat th e fo r e i g n re p r e s e n ta tiv e h a s file dap e tit io n fo rre c o g n itio n . I d. § 1 5 1 5 (a). Sec ond, Sec t i on 1515 r equir es t he pet i t i onert o e st abl i sh thata f or ei gn pro c ee di ng exi st s, and t hatt he pet i t i on er has be en appoi nt ed as t he f or ei gn r e p r e s e n ta tiv e . Id . § 1 51 5(b) . The f i r s tt w o pa r ag r ap hs o f t hi s s ubs e c t i o n pr o vi de f orw hatc ons t i t ut es s uf f i c i entev i denc e, and s pec i f y t hatt he pet i t i onerm ay sati sf y t h i s r equ i rem en tby provi di n g a “c ert i f i ed copy of t h e decisi on com m en ci n g such for ei gn proceedi n g an d ap poi n t i n g t h e f orei gn representat ive” and “a certif

i c at e f r om t he f

or ei gn c our taf

f i r m i ng t he e xi st enc e o f t he f or ei gn p roce ed i n g a n dthe ap p oin tm en t of t h e foreign rep rese n tative . ” Id . Thir d, Sec t i on 1515 r equi r es t hat t he pet i t i on f orr ec ognit i on m ustbe ac c om pani ed by a st at e m e nti d e nt i f

y i nga l lf

o r e i g n p r o c e e d i ng s wi t h r e s p e c tt o t hed e b t o rt hat a r e k n o w n to th e fo r e ig n re p r e s e n ta tiv e . I d. § 151 5(c) . L avie h as sat i sf i ed allof t hese pr o c e dur alr e quir e m e nt s . Thus , Se c t i o n 1 51 7( a) ( 3) ha s b e e n s at i s f i e d. Lavi e has al som ett he r equi r em ent s of t he s ec ond el em entof Sec t i on 1517( a) becau s e “ t he f

o r e i gn r e pr e s e nt at ive ap plyi ng f o r r e c o gnit i o n i s a pe r s o n or b od y[. ]” I

d. § 1 5 1 7 (a)(2). B ecaus e the s ec ond and t hi r d r equi r em ent s se tf or t h i n Sect i on 1517( a) ar e i ndi s put ab l y m e t , t he o nly s ubs t ant ivei s s ue b e f o r e t he c o ur tb e c o m e s t he f i r stdeli neat ed r equi r em entof Sec t i on 1 5 1 7( a) ( 1)

— w het hert he f or ei gn proceedi n g f

or w h i ch recogni t i on i s s ou gh t , here R an ’ s ongoi n g, i n v o lu n tary b a n k r u p t c yp r o c e e d in gp e n d in ginIs r a e li, is a fo r e ig n m a in o rn o n m a in proceedi n g . I f th e forei gn proceedi n g i s nei t h er th en iti s s i m pl y i n el i gibl e f or r ec ognit i on u nderC hapt er15 . Se eI n reBe arSt e ar ns , 3 8 9 B .R . a t 3 3 4 ; seealso Case: 09-20288 Document: 00511124097 Page: 6 Date Filed: 05/27/2010N o. 09- 20288

7 In r eSPhi nX, Lt d. , 3 5 1 B .R . 1 0 3 , 1 2 0 n .2 2 (B a n k r . S .D .N .Y . 2 0 0 6 ), aff’d , 371 B .R . 1 0 (S .D .N .Y . 2 0 0 7 ). C. D e t e r m i ni ng S t at us as a For e i gn M ai n Pr oc e e di ng Af orei gn m ai n proceedi n g i s “ a f orei gn proceedi n g pen di n g i n t h e coun t ry w h ere th e d e b tor has the cent er of i t s m ain i n t ere st . ” 11 U . S. C . § 1502( 4) ( em ph asi s add ed). Th e ph rase “center of m ai n in te re st” (“ C O M I” ) i s a t erm of art , w h i ch the B an kru ptcy C ode d oes not defi n e exp l i cit l y. C h ap t er 15, how ever, d o e s p r o v id e th a t“[ i] n th e a b s e n c e o f e v id e n c e t o t h e c o n t r a r y , t h e d e b t o r ’s regi st ered of

f i ce, or h abit u alres i den ce i n t h e case of a n indivi du al , i s presum ed to be the cen ter of th e d eb tor’ s m a i n i n teres ts. ” I d. § 1516 (c) . Th i s presum pti on c a n b e r e b u tt e d b ye v id e n c e to th e co n tr a r y . Se eIn reTr i
- Cont i ne nt alEx c h. Lt d. , 3 4 9 B . R. a t6 3 4 . T h u s , t o d e t e r mi n e w he r e R a n ’ s p r e s u mp t iv e C OMI l i e s , we m us tde t e r m i ne t he l o c at i o n of hi s habit ualre s i de nc e a nd the n de t e r m i ne if a ny evi denc e t o the c ont r ar y w as pr es ent ed byLavi e t o r ebut t he pr es um pt i on t hat Ra n ’ s h a b i t u a lr e s i d e nc e i s hi s C OMI . I f s o , o u ri n q u i r yd o e s n o te n da n dwe m u s t c o n s id e ra ll e v id e n c e to d e te r m in e th e lo c a tio n o f R a n ’ s C O M I. T h e C ode d oes not defi n e “h abit u alres i den ce, ” bu titha s been an al yzed r ec ent l y by f

or ei gn c our t s as vir t ual l y i dent i c alt o the m or e c om m only us ed, at le a s t in t h e U n ite dS ta te s , co n c e p t o f d o m ic ile . U n d e ro u rla w , d o m ic ile is e s ta b lis h e db yp h y s ic a l p r e s e n c e in a lo c a tio n co u p le dw ith a n in te n t t o re m a in th e r e in d e fin ite ly . Texasv . Flo r i da , 306 U . S . 398 ( 193 9) . O n e acqu i res a “d o m icil e of o rig in ” a t b irth , a n dth a t d o m icil e co n tin u e s u n tilan e w o n e (a “d o m ic ile o f c h o ic e ”) is a c q u ir e d . Mi s s i s s i ppiB andof

Choc t aw I

ndi ans v . Ho lyfield , 4 9 0 U .S . 3 0 (1 9 8 9 ). T o d e fe a t t h e p r e s u m p tio n o f c o n tin u in gd o m ic ile ande s t ab l i s h ane w do m i c i l e , a n i ndi vi du alm us tde m o ns t r at e r e s i de nc e i n a n e w s t a t e a n da n in te n tio n to re m a in inth a t s ta te in d e fin ite ly . A c r i dge v. E v a nge li c a l L u th e r a n G o o dS a m a r it a n So c ’y , 3 3 4 F .3d4 4 4 , 4 4 8 (5t h C ir. 2 0 0 3 ). S i m i l arl y, accor di n g t o f orei gn court s, t h e exi st en ce of a ha bi t u al resi den ce Case: 09-20288 Document: 00511124097 Page: 7 Date Filed: 05/27/2010N o. 09- 20288

8 l argel y dep en ds on w h et h er th e debtor i n t en ds t o st ay i n t h e l ocat i on p e r m anent l y. S e e, e . g. , P in n av. Ca iss e d ’ A lloc a tion s Fa m ili a les d e laS a v o ie , [ 1986] E . C . R . 1 ( E C J 1986) ( France ) . O t herfac t or s per t i nentt o af i ndi ng of

an i ndivi dua l ’ s ha bit ualr e s i de nc e i nc l ude : ( 1) t he l e ngth o f t i m e s pen ti n t he l ocat i on ; ( 2) t h e occ u pa t i on alor fam i l i al t i es t o t h e area; an d ( 3) t h e l ocat i on of t he i ndivi dua l ’ s r e gul ar ac t ivit i e s , j o bs , a s s e t s , i nve s t m e nt s , c l ubs , uni o ns , a nd in s tit u tio n s o f w h ic h h e is am e m b e r . See, e . g. , i d. ; seealso G eo r ge A . R os enber g, Is rael iT

ax R ef orm , J . I NT’ LT AX’ N3 1 , 2 0 0 3 W L 1 8 7 1 0 1 1 a t *3 1 (A p ril 20 0 3 ); G e v e r an Tradi ng Co. v . Skj e v e s land , 200 2 W L 319 47 3 3 4 (C h . D . B an kru ptcy C t.) (E n g .); Is r a e l D o r a n & T a l G o la n , Agi ng, G lo ba l izat i on , andt heLega l Con st ruct i on of

“ R esi d ence: ” T

h e Case of O l d Age Pensi on s i n I srael , 15 E L DER L .J . 1 , 1 6 (2 0 0 7 ). H e r e , itis e v id e n tth a tw h e n L a v ie fi le dth e p e t it io n fo rr e c o g n it io n , R a n ’s hab i t ualr e s i de nc e w as i n H o us t o n, Te xa s . Ourc o nc l us i o n i s sup po r t e d byo ur rev i ew of th e record w h i ch rev ea l s th a t R a n l eft Isra el ne a rl y a de ca d e p ri or to t h e f i l i n g of t h e petit i on , ha s no i n t e n t t o r e tu rn, an d h as est abli shed e m pl o ym e nta nd ape r m ane ntr e s i de nc e i n H o us t o n. Ran i s a l e ga lpe r m ane nt r e s i de nto f

t he U ni t e d St at e s a nd hi s c hil dr e n ar e U ni t e d St at e s c i t i z e ns . And t h e rec ord al so r ef

l ect s th at R an m ai n t ai n s h is fi n an ces excl u sivel y i n T exas. T h e to ta lityo f th e c i r c u m s ta n c e s b e fo r e u s in d ic a te s th a t t h e U n ite dS ta te s is R a n ’ s h a b itu a l re s id e n c e a n dth u s h is p r e s u m p tiv e C O M I. Bef o r e t he di s t r i c tc o ur t , Lav i e i nt r o duc e d e vi de nc e t o r e butt he presum pti on t h at R an ’ s C O M I i s l ocat ed i n the U n i t ed S t ates. B ecau se of t h i s, w e c annot r ely so l ely upon Sec t i on 1516(c ) ’ s pre sum pt i on. I nst ead, i n or der t o de t e r m i ne Ran’ s CO M I w e m us tc o ns i de ra l le vi denc e , w hi l e ke e pi ng i n m i nd t hatiti s Lav i e ’ s b u rden t o pe r s uad e t he c o ur tb y a pr e po nde r anc e o f t he e v id e n c e th a t R a n ’ s C O M I is inIs r a e l. Se eI n reBe a rS t e ar ns , 3 89 B. R . at 3 3 5 -3 6 ; see als o F ED . R . E VID . 3 0 1 (ex p la in in gth a t ap a rty ’ s r e b u tta l of a Case: 09-20288 Document: 00511124097 Page: 8 Date Filed: 05/27/2010N o. 09- 20288

9 presum pti on does not s h i f tt h e bu rden of

proof; rat h er, t h e ri sk of non persua si on r e m a in s u p o n th e p a r tyo n w h o m it w a s o r ig in a llyca s t— in t h is c a s e , R a n ); In re Tr i-Co n tin e n ta l Ex c h . L td ., 349 B . R . a t6 35 ( di scussi n g t h e 11 U . S . C . § 1516 (c) p r e s u m p tio n ); S ch aflein v. Com m ’ n of t h e E u ropean C m tys. , ( C as e 2 84/ 87) [1 9 8 8 ] E C R 4 4 7 5 ( E C J 2 dC h a m b e r1 9 8 8 ) (n o t in gth a ta lt h o u g h a n in d iv id u a l’s h a b i t u a lr e s i d e n c e i s p r e s u me dt o b e h i s C O MI , t h i s p r e s u mp t i o n i s n o to u t c o me d e te r m in a tiv e if o th e re v id e n c e s u g g e s ts th e d e b to r ’ s C O M I is e ls e w h e r e ); see als o G u i de to E n act m en tof t h e U N C ITR A L M odelL aw on C ross - B order Insolven cy § 122 (n ot i n g t h at th e presum pti on does “ n otpreven t , i n accor da n ce w i t h a ppli c ab l e procedu rall aw, c all i ng f o ro ra s s e s s i ng o t he re vi de nc e if t he concl u si on sugg est ed byt h e presum pti on i s cal l ed i n t o qu est i on by the courtor a n in te re ste dp a rty”). N ei t h er C h ap t er 15 nor t h e M odelL a w o n C ross - B order I n solven cy d e s c r ib e s th e fa c t o r s th a tm a yb e r e le v a n tto ad e t e r m in a t i o n o f th e d e b t o r ’s C O M I i n a c a se w h ere iti s di spu t ed. B u t , t h e SPhi nX c o ur ts ugg e s t e d the f o l l o wi n gl i s to f

n o n - e x h a u s t iv e fa c t o r s t o b e c o n s i d e r e dwh e n ad e b t o r ’ s C OMI i s i n di spu t e: Var i o us fac t o r s , s i ngly o rc o m bi n ed, c o ul d b e r e l e va ntt o s uc h a de t e r m i nat i o n: t he l o c at i o n o f t he de bt o r ’ s he ad qua r t e r s ; t he l o c at i o n o f t ho s e w ho ac t uall y m ana ge t he de bt o r (w hi c h, c o nc e ivably c o ul d b e t he he ad qua rt ers o f aho l di ng c o m pa ny) ; t he l oca ti on of th e d eb tor’ s p ri m a rya sse ts; the l oca ti on of th e m aj ority of t he deb t or ’ s c r edit or s or a m aj or i t y o f t he c r edit or s w ho w oul d be a ff ected the cas e; a n d/or th e j u ri sd i cti on w h ose l a w w ou l d a p p l y to m ostdi spu t es. 3 5 1 B .R . a t 1 1 7 , aff’d , 3 71 B. R. 1 0 ( S. D . N . Y. 2 00 7) . I n SPhi nX t he courtw as concernedw i t h t h e C O M I of a debtor c orporati on . I tnoted t h at i n t h e absen ce Case: 09-20288 Document: 00511124097 Page: 9 Date Filed: 05/27/2010N o. 09- 20288

10 o f e vi de nc e t o t he c o nt r ary, t he CO M Io f ac o r po r at i on is p resum e d t o b e t he pl ac e o f it s r egi st er ed of

f i c e w hi c h i teq uat ed w i t h t he c or por at i on’ s pri nci pal p la c e o f b u s in e s s . I d. at 116 . C on si deri n g t h e above l iste d fact ors, t h e court t h en deter m i n ed that t h e st atutor y presum pti on regardi n g C O M I h adbeen ov erco m e a n dtha t th e d eb tor corp ora ti on ’ s C O M I w a s n ot the place of i ts r e g is te r e do ffic e . I

d. W hi l e t he fac t o r s s e tf o r t h i n SPhi nX of

fer a u sef

u lan al yti calf

ram ew ork to d eterm in e th e d i sp u tedC O M I of acorp ora te d eb tor, the releva n t fa ctors to de t e r m i ne t he di s put e d CO M I i n t he c as e o f a n i ndivi dua lde bt o rw ho ha s no reg i stere do ff

i ce, h ea d q u a rters, or h oldin g com p a n y m a y b e som ew h a t dif feren t. N e ve r t he l e s s , i n In reL oy , 3 8 0 B .R . 1 5 4 . 1 6 2 (B a n k r . E .D . V a . 2 0 0 7 ), th e o n ly c as e t o a ddr e s s the c o nc e pto f CO M I w i t h r e s pe c tt o a n i ndivi dua lde bt o r , t he c our tnot ed thatfac t or s s uch as ( 1) the l oc at i on of a debt or ’ s pr i m ar y as se t s; ( 2) t h e l ocat i on of

t h e m aj orit y of

t h e debtor’ s c redi t ors; an d ( 3) t h e j u ri sdi ct i on w hos e l aw w oul d apply t o m os tdi sput es , m ay beuse d t o de t er m i ne an i ndivi dual d e b to r ’ s C O M I w h e n th e r e e x is ts as e r io u s d is p u te . In o th e r w o rd s, t h e L oy co u rt c o n sid e re dfac to rs w h ich a re n o rm a llya p p li e dto th e d e te rm in a tion of a c or por at e debto r ’ s C O M I i n or dert o de t er m i ne t he di sput ed CO M I of an i n divi du aldebtor. A f t er w ei gh i n g t h e ev i den ce bef ore itconcerni n g each fact or, th e b a n k r u p tc yco u r t c o n c lu d e dth a t L o y ’ s C O M I w a s E n g la n d . Id . Th e a ppl i c abil i t y v e lno n of t h e SPhi nX

fac t o r s t o t he de t e r m i nat i o n o f t he di spu t ed C O M I of

an indivi du ald ebtoris a n a rgum en ttha tw e n eed n otadd ress t oday. Even ass um i ng argue ndo t he i ra ppli c ab i l i t y t o t he i ns t an tcase o ur r e vi e w o f

t he r e c o r d r e ve al s t hatLav i e ’ s e vi de nc e , w hi l e s uf f i c i e ntt o r e butt he presum pti on t h at R an ’ s C O M I w as i n t h e U n i t ed S t ates, w as nev ert h el ess i ns uf f i c i e ntt o pr o veb y a pr e po nde r anc e o f the evi de nc e t hatI s r ae li s t he lo c a tio n o f R a n ’ s ce n te ro f m a in in te r e s ts . Case: 09-20288 Document: 00511124097 Page: 10 Date Filed: 05/27/2010N o. 09- 20288

11 L avie prof

fered t h e f

ol l ow i n g evi den ce bef ore th e di st ri ctcourtt o est abli sh t h at R an ’ s c en t er of

m ai n i n t erest s li es i n Is rael : ( 1) R an ’ s c redi t ors are l ocat ed i n I srael ; ( 2) R an ’ s pri n ci p a l a ss e t s are bei n g ad m i n i st ered i n ban kru ptcy pe ndi ng i n I s r ae l ; and ( 3) Ran’ s ba nkr upt c y pr o c e e di ngs i ni t i at e d i n I s r ae la nd w ou l d be gov ernedby Is rael il aw . T h ese fact ors, h ow ever, w h en w ei gh ed ag ai n st th e fol l ow i n g: ( 1 ) R a n alon g w i thh i s fa m i l y leftIsrae ln ea rl y a de ca d e p ri or to t he f i l i ng of t he peti t i on; ( 2) R an has no i nt entt o retu rn to I sr ael ; ( 3) R an has est abli shedem pl oym en tan d a resi d e n ce in H ou st on , T exas; ( 4) R an i s a perm an en tl egal r e si den tof t h e U n i t ed S t ates an d h i s c h i l dren are U n i t ed S t ates c i t i z e ns ; a nd ( 5) Ran ma i n t ai ns hi s f i nanc e s e xc l us ive l y i n Te xa s , a r e i ns uf f i c i e nt to p r o v e b yap r e p o n d e r a n c e o f th e e v id e n c e th a t I s r a e li s R a n ’ s C O M I. S ee Pe n n zo i lCo . v . F. E. R. C. , 789 F . 2d1 128 , 1 136 (5t h C i r. 1 986 ) (noti n g t h at a fact f i n der can stil lcr edi tt h e evi den ce of th e party i n favor of w h om t h e rebutt ed pr e s um pt i o n o pe r at e s de s pit e t he e xi s t e nc e o f c o nt r ary e vi de nc e a nd d e s pit e t he r e s u lta n t d e s tr u c tio n o f th e p r e s u m p tio n ). Lav i e ’ s r e l i anc e upo n L oy t o p r o v id e s u p p o r tfo rh is a r g u m e n tth a tL a v ie ’s C O M I i s I sraeli s m i spl aced becau se iti s pl ai n l y di st i n gu i sha bl e f or a nu m ber o f r e as o ns . Fir s t , i n L oyt h e courtconcl u dedt h at th e debtor’ s hab i t u alres i den ce w a s th e U n ite dKin g d o m . L oy , 380 B . R . at 163 . Th u s, t h e presum ption i den t i f i ed i n Secti on 1 516 (c) w ei gh ed i nfavor of the court f

i n di n g t h at the U n i t ed K in g d o m w a s L o y ’ s C O M I. I d. I n c o nt r as t , i n t he i n st antc as e , b e f o r e b e i ng r e but t e d, t he Se c t i o n 1 51 6(c ) pr e s um pt i o n wei ghe d i n fav o r o f Ran’ s CO M I b e i ng i n t he U ni t e d St at e s , t he l o c at i o n of hi s habit ualre s i de nc e . Se c o nd, unli ke i n t he i ns t antc as e , t he de bt o ri n L oyw a s in v o lv e dinth e b a n k r u p tc yp r o c e e d in g s in t he U ni t e d K i ngd o m pr i o rt o hi s dep ar t ur e fo rt he U ni t e d St at e s . U nl i ke Ran, L oy n ever succes sf

u l l y t ran sferred h i s C O M I bef ore th e petit i on f

or r ecognit i on w a s file d . Case: 09-20288 Document: 00511124097 Page: 11 Date Filed: 05/27/2010N o. 09- 20288

12 Alt h o u gh o u rr e v i e w o f t h e o bj e c t iv e fa c t o r s e s t a b l i s h e s t h a tR a n ’ s C OMI i s i n t he U ni t e d St at e s , Lav i e ha s a no t he ra r gum e nt . H e con t en ds t hatt he C O M I det er m i nat i ons ho ul db em a d ewith r e f e r e nc et oR an’ s ope r at i onalhi st or y, an d n ot m erely by f

ocusi n g u pon w h ere R an ’ s C O M I l i es on t h e date t h e petit i on f o rr e c o g n i t i o n wa s f

i l e d . I n o t h e rwo r d s , L a v i e a r g u e s t h a tb e c a u s e R a n ’ s C OMI w as l ocat ed i n I sraelat som e poin ti n t i m e bef ore he f

i l ed the petit i on f

or r e c o gnit i o n, w e s ho ul d l o o kb ac k a tRan’ s o pe r at i o nalh i s t o ryinI s r ae lt o c o nc l ude th a t h is C O M I lie s inIs r a e l. W e d is a g r e e . A n anal ys i s of

t he pr ope rC O M I t i m ef r am e s t ar t s w i t h, as itm ust , t he t ext o f S e c tio n 1 5 0 2 o f th e C o d e . S eeM a r kL ig h tn e r , D e t e r m i ni ng th e Cen terof Ma in I nt e r e s t Und e rC hapt e r15 , 1 7 J . B ANKR . L . & P RA C . 5 , a r t . 2 ( 20 09 ) . I n t he bankrupt c y c ont ext , t he analys i s m ustend w i t h t he t ext i f t he l anguage i s c l ear a n dd o e s n o t le a dto a n a b s u r dre s u lt. See, e . g. , Un itedS ta tes v. R o n Pa ir E n te rs ., In c . (In reR o nPa irE n te rs .) , 489 U . S . 235 , 298 ( 198 9) . W h i l e Secti on 1 5 0 2 do es n ot ex p ress l y d i scu ss atem p ora lfra m ew ork for d eterm i n i n g C O M I, th e g ra m m a ti ca lten se in w h i ch it i s w rittenpr ov i d es g u i d a n ce to th e cou rt. E very operative verb i s w rit t en i n t h e p re se n t or presen tprogressive t en se. M or e s pec i f

i c al l y, Sec t i on 1502 def i nes f or ei gn m ai n pro c ee di ng as a “f or ei gn proceedi n g pen di n g i n t h e coun t ry w h ere th e debtor hasth e ce n te ro f its m a in i n t erest s. ” 1 1 U .S .C . § 1502 ( 4) . C on gress’ s c h oi ce t o use t h e present t en se r e q u i r e s c o u r t s t o v i e w t h e C O MI d e t e r mi n a t i o n i n t h e p r e s e n t , i . e . a tt h e t i me t h e petit i on fo r recognit i on w as f i l ed. I f C on gress h ad , i n fact , i n t en ded ban kru ptcy c ou rt s t o vi ew t h e C O M I determ i n ati on t h rough a l ookb ack p eri od o ro n as p e c ificp a s t d a te , it co u ldh a v e e a s ilys a ids o . T h is is p a r tic u la r ly s ig n ific a n t b e c a u s e C o n g r e s s is cle a r lyca p a b le o f c r e a tin glo o k b a c kp e r io d s in th e B a n k r u p tc yC o d e . See, e . g. , id . § 522 (b) ( 3) (A) (creat i n g a l ookb ack p rovi si on fo rp r o p e r tye x e m p tio n s ). Case: 09-20288 Document: 00511124097 Page: 12 Date Filed: 05/27/2010N o. 09- 20288

13 M oreover, exam i n in ga debtor’ s C O M I at th e t i m e t h e petit i on f or r e c o g n i t i o n i s f

i l e df u l f i l l s Co n g r e s s ’ s p u r p o s e f o r i m p l e m e n t i n g Ch a p t e r1 5 . As n otedab ov e, C h a p ter 15 w a s i m p l em en tedbyC on gr ess i n a n a ttem p t t o harm oni zet r ansnat i onali nso lvenc y pr oc ee di ngs. I f w e w er e t o a ss es s C O M I by f ocusi n g u pon R an ’ s op erat i on alh i st ory, there w ou l d be an i n creased li kelih ood of conf l i ct i n g C O M I determ i n ati on s, as c o u rts m ay tendt o att ach great er i m po r t anc e t o a c t i vi t i es i n t he i ro w n c o unt r i e s , o rm ays i m ply w e i gh t he e v id e n c e d iffe r e n tly w h ic h m a y le a d to th e p o s s ib ility o f c o m p e tin gm a in p r o c e e d in g s , th u s d e fe a tin gt h e p u r p o s e o f u s in gt h e C O M I c o n s tr u c t. S ee In re Bet c o r p Lt d. , 400 B . R . a t2 90. In fact , a m ean deri n g an d n ever- en di n g i n qu i ry i n t o t h e debtor’ s past i n t erest s cou l d l eadt o a den i alof rec ogn i t i on i n a coun t ry w h ere a debtor ’ s i n t erest s are t rul y centered, m erely becau se h e condu ct ed p ast ac t ivi t i es i n a c ount r y ats om e po i ntw ell bef or e t he pet i t i on f

orr ec ognit i on w as s o u gh t. S eeJ a yL a w r e n c e W e s tb r o o k , L ocat i ng t h e E ye of t h e Finan ci al S t orm , 32 B ROOK . J . I NT’ LL . 1 0 1 9 , 1 0 2 0 (2 0 0 7 ). A ddi t i onal l y, iti s i m por t antt hatth e debt or ’ s C O M I be as c er t ai nabl e b y t h i rd pa rt i es. I f

t h e debtor’ s m ai n i n t erest s are i n a parti cul ar coun t ry an d thi rd p a rti es o b serv e th i s sit u a ti on , it sh ou l dbe irrelev a n t th a t th e d eb tor’ s i n teres ts w e r e pr evi ou sl y c e nt e r e d i n adif fe r e ntc o unt r y al m o s tade c ad e pr i o rt o t he r e c e iv e ra tt e m p tin gto h a v e th e fo r e ig n b a n k r u p tc yp r o c e e d in gre c o g n iz e d . S ee I n reBe t c o r

p Lt d. , 400 B . R . at 290 . T h e presum pti on i s t h at credi t ors w i l ll ook t o t he l aw of

t he j ur i sdi ct i on i n whi c h t he y pe r c e ivet he de bt o rt o b e o pe r at i ng t o res olve an y di f

f i cul t i es th ey h ave w i t h t h at debtor , regardl ess of w h et h er s u ch resolu t i on i s i n f

orm al , adm i n i st rat ive or j u di ci al . Th i s i s c o ns i s t e n tw i t h E n gl i sh c a s e s i n t e r p r e t i n gt h e E u r o p e a n Un i o n R e g u l a t i o n , wh i c h s e e m t o s e l e c tat i me l i nke dt o t hec o m m e nc e m e nto rs e rv i c e o f t her e l e v a nti ns o lv e nc yp r o c e e d i ng. Shi e rs o n v . Vl i e land- Boddy , [ 2005] E W C A( C iv) 974, §§ 39, 55, 2005 W L 1860177 Case: 09-20288 Document: 00511124097 Page: 13 Date Filed: 05/27/2010N o. 09- 20288

14 (E n g); R eCol l i ns& Ai km an Co r p. G ro up , [ 2005] E W H C ( C h) 1754, § 39, 2005 W L 4 8 2 9 6 2 3 (E n g .). Lav i e ur ge s t he cour tt o r e c o gni z e t he I s r ae l ipr o c e e di ng t o e f fe c tt he p ri n ci p l es o f com i ty a n dde fer e n c e e n c om p a sse di n C h a p ter 15 byde ferri n g to th e j uri sdi c t i onalc hoi c e o f t he I sr aelic r edit or s. Th i s ar gum enthas no m er i t. T h e pl ai n l an gu age of C h ap t er 15 requ i res a fact u ald et erm i n ati on w i t h res pect to r e c o g n itio n b e fo r e p r in c ip le s o f c o m ity c o m e in to p la y . S ee11 U . S. C . § 1507. B ya r g u in gco m ityw ith o u t fir s t s a tis fy in gth e co n d itio n s fo rre c o g n itio n , L a v ie u r g e s th is co u r t t o ig n o r e th e s ta tu to r yre q u ir e m e n ts o f C h a p te r1 5 . L a s tly , w e n o te th a t th is c a s e d o e s n o t in v o lv e a r e c e n t ch a n g e o f d o m ic ile b yth e p a r t y in q u e s t io n . As im il a rc a s e b r o u g h tim m e d ia t e lya ft e rth e p a r t y ’s a rriva li n the U n i tedS tates foll ow i n g a l on g p eriodo f d o m ic ile in th e cou n ty w h e r e th e b a n k r u p tc yis p e n d in gw o u ldlik e lyle a dto ad iffe r e n t r e s u lt. In sum , t h e di st ri ctcourt ’ s den i alof recogni t i on of t h e I srael iban kru ptcy p r o c e e d in ga s afo r e ig n m a in p r o c e e d in gis a ffir m e d . D . D e t e r m i ni ng S t at us as a For e i gn Nonm ai n Pr oc e e di ng A lth o u gh th e Is r a e li b a n k r u p tc y p r o c e e d in g is n o t a fo r e ig n m a in proceedi n g, ou r i n qu i ry does n ot en d th ere. W e m u st n ext deter m in e w h et h er it m a yb e re co g n ize da s a for e ign n o n m a inp ro ce e d in g . W h il e r e c o g n iti o n of a f orei gn proceedi n g as a f orei gn non m ai n proceedi n g m ay p rovi de the sam e reli ef as rec ogn i t i on as a f

orei gn m ai n proceedi n g, t h e reli ef i s n ota u t om ati c; rat h er, w h et h er anysuch rel i ef i s app ropri ate i s det erm i n ed byt h e ban kru ptcy c ou rt af t e rno t i c e a nd ahe ar i ng, a tt he c o ur t ’ s di s c r e t i on , a nd s ubj e c tt o t he r e q u ir e m e n t t h a t a ll cr e d ito r s b e s u ffic ie n tlyp r o te c te d . S ee11 U . S. C . § 1521. L avie argu es th at th e a dm i n i st rat i on of R an ’ s ba n kru ptcy es t ate i n I srael i s it self an est abli shm en tw i t h i n t h e m ean i n g of C h ap t er 15 an d that itt h eref ore shou l d be recognized as a forei gn non m ai n proceedi n g. N ot ably, no U n i t ed St at e s c o ur tha s de c i de d wheth e ra nin d ivi d u a l ’ s b a n k r u p t c y pr o c e e di ng pe ndi ng Case: 09-20288 Document: 00511124097 Page: 14 Date Filed: 05/27/2010N o. 09- 20288

15 i n anot herc ount r y and r el at ed de bt s al one ar e suffi ci en tt o c ons t i t ut e a n es t abl i shm entunder C hapt er15. Af or ei gn nonm ai n pro c ee di ng i s “ a f or ei gn proceedi n g, ot h er th an a fo rei gn m ai n proceedi n g, pen di n g i n a coun t ry w h ere t he de bt o rha s a n e s t ab l i s hm e nt . ” 11 U . S . C . § 150 2( 5) ( em ph asi s add ed). Sect i on 150 2( 2 ) def

i n es an establ i shm en tas “ any place of operat i on s w h ere th e debtor c ar r i es outa n o n tra n sito ry ec o n o m ic a ctiv ity . ” I d. § 1 5 0 2 (2 ) (em p h a si s a d d e d ). I n c ont r as ttoC O M I , “[t] he exi st enc e of an est abl i shm enti s es se nt i al l y a fac t ual q u estion , w i th n o pre su m p ti on i n its fa vo r. ” I n reBe arSt e ar ns , 389 B . R . at338. A s one c our tnot ed, “t he bari s r at herhi gh” t o p rov e thata de bt orhas an e s ta b lis h m e n t in ap a r tic u la rlo c a tio n . I n reBe arSt e ar nsHigh- G r ade St r uc t ur e d Cr e di tSt r at egi e sMas t e rFund, Lt d. , 37 4 B. R. 12 2, 13 1 ( B an kr. S .D .N .Y . 2 0 0 7 ), aff’d , 3 8 9 B .R . 3 2 5 (S .D .N .Y . 2 0 0 7 ). S i m i l a r to a d eterm i n a ti on of R a n ’ s C O M I, the releva n t t i m e p eriodto determ i n e w h et h er R an ha s an establ i shm en t i n Is rael i s at t h e t i m e L avie f i l ed h is p e tit io n fo rre c o g n itio n . O u rco n c lu s io n is a g a i n s u p p o r te db yap la in l ang uag e r e ad i ng o f

Chapt e r1 5, w hi c h not e s t hata f o r e i gn no nm ai n pr o c e e di ng can exi stw h ere a debtor“ h as a n e s ta b lis h m e n t.” 1 1 U .S .C . § 1 5 0 2 (5 ) (e m p h a s is ad ded ) . L ik e w ise, Secti on 150 2( 2) ref ers t o an est abli shm en tas “ an y pl ace of operati on s w h ere th e debtor carri esou t a n on tran sit oryactivi ty. ” I d. § 1502( 2) (e m p h a s is a d d e d). T h e u s e o f t h e p r e s e n tte n s e im p li e s th a tth e c o u r t ’s e s t ab l i s hm e nta nalys i s s ho ul d f o c us o n whet he rth ed e b t o rh as a n e s t ab l i s hm e nt i n t he f or ei gn c ount r y w her e t he bankr upt c y i s pendi ng att he t i m e the f or ei gn r e p r e s e n ta tiv e file s th e p e tit io n fo rr e c o g n itio n u n d e rC h a p te r1 5 . S eeM ark L i gh tn e r , D et e r m i ni ng t he Cent e rof Mai n I

nt e r e s tUnderChapt e r15 , 17 J . B ANKR . L . & P RA C . 5 , a r t. 2 (2 0 0 9 ). So i n or derf

orR an t o have an es t abl i shm enti n I sr ael , R an m usthave ( 1) h ada pl ace of

operati on s i n I sraelan d ( 2) been carryi n g on no n tra n sitory econom i c act ivi t y i n I sr a e l a t t h e t i m e t h at La vi e broug h tt h e petit i on f or Case: 09-20288 Document: 00511124097 Page: 15 Date Filed: 05/27/2010N o. 09- 20288

16 recogni t i on i n t h e U n i t ed S t ates. N ei t h er C h ap t er 15 nor i t s l egi sl ative h i st ory expl ai n w hat i t m eans f or a debt or t o have “ any pl ac e of ope r at i ons ” ort o have

“bee n c ar r yi ng on nont r ansit or y e c onom i cac t ivi t y” in alo c a tio n . S ee H . R. Rep . N o . 1 0 9 -3 1 (I ), a t 1 0 7 , r e pr i nt e d i n 2 0 0 5 U .S .C .C .A .N . a t 1 7 0 (m e n tio n in go n ly t h at th e def

i n i t i on w as t ak en f

rom M odelL aw f

or C ross - B order I n solven cy A rt i cl e 2) . H ow ever, the M odelL aw f or C ross - B order I n solven cy an d the sources f rom w h i ch i tem an ates provi de gu i da n ce c on cerni n g w h at itm ean s f or a debtor to h a v e a n e s ta b lis h m e n t in alo c a tio n . The dr af

t e r s o f t he M o de lLaw f

o r Cro s s - Bor de r I ns o lve nc y r e l i e d o n t he E U C o n v e n tio n to d e fin e a n e s ta b lis h m e n t. S eeG ui de t o Enac t m e nto f t he U N C I T R A L Mo d e l L a w o n C r o s s - B o r d e r I n s o lv e n c y § 7 5 ( 1 9 9 7 ) . P e r the E U C on ven t i on ’ s l egi sl ative h i st ory, in ord er t o ha ve a “pl ace of operati on s” i n I srael Ran m us tha veha d “ a pl ac e f r o m w hi c h e c o no m i c ac t ivit i e s ar e e xe r c i s e d o n t he m ar ket(i . e. ex t er nal l y) , w het hert he s ai d ac t ivi t i es ar e c om m er c i al , i ndu st r i al o rp r o fe s s io n a l” a t t h e tim e th a t L a v ie file dt h e p e tit io n fo rre c o g n itio n . C O U N CIL R EP ORT ON T HE C ONVE NT I ON ONI NS OLVE NCYP ROC EE DI NGS , at 49, N o. 6500/ 96. T h e m ere presence of asset s i n a given l ocat i on does not, by i t self, const i t u t e a p la c e o f o p e r a tio n . I d. at 48. I n t he cont extof cor por at e debt or s, ther e m ustbe ap la c e o f b u s in e s s fo rth e r e to b e a n e s ta b lis h m e n t. I n reBe arSt e ar ns , 3 7 4 B. R. a t 1 3 1 ; seealso D a n ie l M . G l o s b a n d , SPhi nX Chap t e r1 5 O pi ni o n Mi s s e st he Mark , 25 A M . B ANKR . I NST . J . 4 4 , 4 5 (D e c ./J a n . 2 0 0 7 ). E q u a t in gac o r p o r a t io n ’s pri nci palpl ac e o f

busi nes s t o a n i ndivi dualdebt or ’ s pri m ar y o rhabi t ual r es i denc e, a pl ac e of

bu si nes s c oul d c onc eivably ali gn w i t h t he deb t orhavi ng a s e c o nda r y r e s i de nc e o rpos s ibly a pl ac e o f e m pl o ym e nti n t he c o unt r y w he r e t he r e c e iv e r c la im s th a t h e h a s a n e s ta b lis h m e n t. S ee 11 U . S. C. § 1 51 6(c ) ( e qua t i ng a corporat e debtor’ s r egi st ered of f i ce w i t h t h e h abit u al resi den ce i n t h e case of an i n divi du al) . A tt h e ti m e L avie f i l ed h i s pet i t i on f

or r ecognit i on , R an possess ed n e ith e ras e c o n d a r yre s id e n c e n o rp la c e o f e m p lo y m e n t in Is r a e l. Case: 09-20288 Document: 00511124097 Page: 16 Date Filed: 05/27/2010N o. 09- 20288

17 Eve n if t he co ur tw e r e t o co nc l ude t hatR an po s s e s s e d apl ac e o f o pe r at i o ns i n I sraela tthe t i m e t he pe t i t i o n was f i l e d, Ran d i d no tc ar r y o uta ny no nt r ans i t o r y e c o no m i ca c t ivit y i n I s r ae land as ar e s ul tt he s e c o nd p ar to f t he e s ta b lis h m e n tr e q u ir e m e n t is n o t m e t. S in c e R a n ’ s d e p a r tu r e fr o m Is r a e l in 19 97 , he ha s e nga ge d i n al m o s t no e c o no m i c ac t ivit y i n t hat c o unt r y; r athe r , t he e v id e n c e s u g g e s ts th a t a lm o s t a ll o f h is e c o n o m ica c tiv itie s a r e ce n te r e din H ou st on an d H arri s C ou n t y, T exas. A tt h e t i m e L avie brou g h t h is su i tf or recogni t i on of

t h e f orei gn ban k rup t cy proceedi n g t h e I srael ii n solven cy pr o c e e di ngs , b r o ugh ti nvo l unt ar i l y andi n R an’ s a bs e nc e , a nd c o r r e s po ndi ng deb t s w ere th e onl y evi den ce of R an ’ s pu rport ed est abli shm en ti n I srael . T h ese deb t s, how e v e r, o n ly represent evi den ce of previ ou s ec on om i c act ivi t y an d are i n s u f f i c i e n tt o s h o w t h a tR a n c a r r i e do n t r a n s i t o r ya c t iv i t yi n I s r a e la tt h e t i me t h e petit i on f

or recogni t i on w as f

i l ed. N evert h el ess, L avie argu es th at as t rustee o f Ran’ s e s t at e t he r e e xi s t s apr i nc i pa l

- ag e ntr e l at i o ns hi p b e t w e e n hi m s e l f a nd R a n a n dth a t h e h a s ca r r ie do u t e c o n o m ica c tiv ityin I s r a e l o n b e h a lf o f R a n , h is p r in c ip a l. T h e la w is c le a r— L a v ie a s th e tr u s t e e o f R a n ’s e s t a t e is n o tR a n ’s a g e n t a n dca n n o t a c t o n b e h a lf o f R a n . S ee 11 U . S. C . § 323. Fu rt h er, as t h e di st ri ctcourtnoted, rec ogn i t i on based on t h e exi st en ce of t h e ban kru ptcy proc eedi n g an d debts al on e poses probl em s. Fir st , a ban kru ptcy p r o c e e d in gis b yd e fi n i t i o n atr a n s ito r ya c tio n , b u t r e c o g n itio n a s an o n m a in pr o c e e di ng r e quir e s t hatt he deb t o rc ar r y o utno nt r ans i t o r y ac t ivit y i n al o c at i o n. W EB ST ER’ s N EWI NT ER NAT I ONALD I CT IONARY2 69 2 ( 2de d. 1 93 9) ( de f i ni ng
“ t rans i t o r y ac t i o n” a s “ [ a] n a c t i o n whi c h m ayb e b r o ugh ti n a ny c o unt r y, [ s uc h] as a c t i o ns f

o rde bt s , et c . ” ) . T o per m i ta t r ans i t o r y ac t i o n, i . e . , t hee xi s t e nc e o f t he I s r ae l ib ank r upt c y pr o c e e di ng andc o r r e s po ndi ng de bt s a l o ne t o co ns t i t ut e t he basi s f or f i n di n g n on t ran sit ory econom ica c tivity, w ou l d be i n ap propri ate because itw o u ldg o a g a in s tth e p la in m e a n i n go f th e s t a t u t e . S e c o n d , if R a n ’s b a n k ru p tcy p roce ed i n g a n d a sso ci a ted d eb ts, alon e, cou l dsu ff i ce to d em on strate Case: 09-20288 Document: 00511124097 Page: 17 Date Filed: 05/27/2010N o. 09- 20288

18 an est abli shm en t , this w ou l d rend er th e f ram ew ork of

C h ap t er 15 m ean i n gl ess. T h ere w ou l d be n o reason to d ef i n e est abli shm en tas enga gi n g i n a non t ran sit ory econom i c act ivi t y. Th e petit i on f or r ecognit i on w ou l d s i m pl y requ i re evi den ce of t he e xi st enc e o f

t he f or ei gn pr oc ee di ng. Bu tt he s t at ut e r equi r es m or e than t h at— i trequi res evi den ce of a for ei gn p roceedi n g an d t h at the proceedi n g m eet t he def i ni t i on o f

f or ei gn nonm ai n pro c ee di ng. Lavi e’ s ar gum entt hatC hapt er15 w oul d notapply t o a ny i ndivi dual s i f t he I sraeliban krupt c y i s notan esta b l i sh m en t, m a k i n g C h a p ter 15 a n u l l ity, i s u n con vin ci n g. D eb tors w i th o ngo i ng bus i ne s s o pe r at i o ns l o c at e d i n t he c o unt r y w he r e t he f o r e i gn pr o c e e di ng i s pe ndi n g w ou l d be s ubj e c tt o Chapt e r1 5. Fi ndi ng t hataf o r e i gn pr o c e e di ng its e lf is n o t a n e s ta b lis h m e n t d o e s n o t m a k e C h a p te r1 5 an u llity . In sum , t h e di st ri ctcou rt ’ s d en i alof recogni t i on of the Israel iban kru ptcy pr o c e e di ng as af

o r e i gn no nm ai n pr o c e e di ng i s a f f i r m e d. I I I . C ONC L US I ON Th i s cou rt do es notat t em ptt o de f i ne t he s c ope of

pos sibl e a c t ivi t i es t hat w ou l d su f

f i ce i n dem on st rat i n g t h e ex i st en ce of an i n divi du aldebtor’ s C O M I or e s t ab l i s hm e nti n apa r t i c ul arl o c at i o n. Rathe r , w e c o n cl ude o nly t hato n t he reco rdbe fore u s tod a y L a vie’ s p eti ti on for rec og n i ti on i s i n su ff i ci en t t o su p p ort a f i ndi ng t hat Ran’ s CO M I o r e s t ab l i s hm e nt ar e l o c at e d i n I s r ae l . Ther e f o r e , t he di st ri ctcourt ’ s den i alof rec ogn i t i on of

t h e I srael i proceedi n g as a f orei gn m ai n or n o n ma i n p r o c e e d i n gi s A F F I RMED. Case: 09-20288 Document: 00511124097 Page: 18 Date Filed: 05/27/2010N o. 09- 20288

19 Case: 09-20288 Document: 00511124097 Page: 19 Date Filed: 05/27/2010