UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

______________________________

 )

In re ) CASE NO. 09-15717-RAM

) CHAPTER 15

VARIG LOGISTICA S.A., )

 )

Debtor. )

______________________________)

)

VOLO LOGISTICS LLC, et al., )

)

Plaintiffs, )

)

vs. ) ADV. NO. 20-1243-RAM-A

)

VARIG LOGISTICA S.A., )

 )

Defendant. )

______________________________)

ORDER (1) DISMISSING ADVERSARY

PROCEEDING, (2) DENYING REQUEST FOR

STAY RELIEF AS MOOT, (3) DENYING MOTION

TO QUASH AS MOOT, AND (4) STAYING DISCOVERY

Robert A. Mark, Judge

_____________________________________________________________________________ United States Bankruptcy Court

ORDERED in the Southern District of Florida on October 29, 2021.

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Introduction

Two contested matters are pending in this chapter 15 case,

a discovery dispute in the main case and a motion to dismiss the 

above-styled adversary proceeding. The foreign debtor, Varig 

Logistica S.A., was a Brazilian cargo airline that is in a 

liquidation proceeding in Brazil. The fiduciary currently

appointed to administer that liquidation, Vanio Cesar Pickler 

Aguiar (the “Foreign Representative” or “FR”) has filed, in Brazil, 

corporate malfeasance claims against several defendants consisting 

of private equity investment funds and their affiliates who 

indirectly owned and controlled the Debtor for about three years

before the Debtor filed a reorganization case in Brazil in 2009. 

These entities continued to control the Debtor for about three 

more years after the Debtor filed its Brazilian reorganization 

case until that case was converted to a liquidation proceeding in 

2012.

 The defendants in the Brazil proceeding, who are also the 

Plaintiffs in this adversary proceeding and will be referred to 

collectively as “MP” or the “MP Entites”, are the following 

entities: (i) Volo Logistics LLC (“Volo”); (ii) MatlinPatterson 

Global Opportunities Partners II LP (“MP Fund”); (iii) 

MatlinPatterson Global Opportunities Partners (Cayman) II LP

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(together with the MP Fund, the “MP Funds”); (iv) MatlinPatterson 

Global Advisors LLC (“MP Advisors”); (v) MatlinPatterson Global 

Partners II LLC; and (vi) MatlinPatterson PE Holdings LLC (f/k/a 

MatlinPatterson Asset Management LLC). 

 In the Brazil proceeding, the Foreign Representative alleges 

that the MP Entities operated the Debtor in a manner that stripped 

the Debtor of its equity to the detriment of the Debtor’s 

creditors. Although the Foreign Representative sued the MP 

Entities in a Brazilian bankruptcy court, he served discovery on 

Volo in this Court and Volo seeks to quash the Foreign 

Representative’s domestic discovery requests. 

 In this adversary proceeding, the MP Entities seek entry of 

a judgment enjoining the Foreign Representative from further 

prosecuting claims against them in Brazil. They argue that the 

Debtor released all claims against its owners in exchange for the 

MP Entities releasing the Debtor from liability for significant 

operating loans. In short, The MP Entities argue that the Foreign 

Representative cannot now pursue claims released by the Debtor. 

 Because the MP Entities are now debtors in chapter 11 cases 

pending before the United States Bankruptcy Court for the Southern 

District of New York, the discovery dispute is stayed. However,

for the reasons explained in more detail below, the Court finds 

cause to dismiss the adversary proceeding and to deny, as moot,

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the MP Entities’ alternative request for relief from the automatic 

stay to prosecute in a New York Court its claims for declaratory 

or injunctive relief.

Background

The MP Entities’ Acquisition of the Debtor

In general terms, the MP Entities are a private equity firm.

For a more specific description of the corporate structure relevant 

to this opinion, the Court refers interested parties to the 

Adversary Proceeding Complaint, DE #1 in Adv. Pro. No. 20-1243, 

and to the “Structure Chart of MP Parties, CAT and VarigLog” that 

is appended to that Complaint as Exhibit “A.” 

The Debtor, Varig Logistica S.A. (“Varig” or the “Debtor”), 

operated a Brazilian cargo airline. In 2006, the MP Entities

acquired Varig through a special-purpose entity called Volo 

Logistics, LLC (“Volo”). Volo has two direct subsidiaries, CAT 

Aérea LLC (“CAT”) and Volo do Brasil SA (“Volo dB”). Volo dB 

wholly owns Varig. Thus, Varig is an indirect subsidiary of Volo, 

and Volo is a special-purpose entity formed and owned by the MP 

Funds. 

In 2006 and 2007, the MP Entities indirectly loaned money to 

Varig through Volo and through Volo’s subsidiary, CAT. Volo made

direct loans to Varig. Together with CAT, Volo also made loans 

to a special-purpose entity called VRG Linhas Aereas S.A. (“VRG”). 

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Varig and Volo dB briefly owned VRG. Varig assumed the CAT and 

Volo loans to VRG, which further indebted Varig to MP.

In sum, MP acquired the Debtor in 2006, and in 2006 and 2007, 

made operating loans that were payable by the Debtor. By 2008, 

the record reflects the Debtor’s financial decline. A summary of 

some of the significant events evidencing the decline follows.

Nonpayment of Aircraft Leases

On February 14, 2008, Pegasus Aviation II, Inc. and Pegasus 

Aviation IV, Inc. sued Varig in the Circuit Court of the 11th

Judicial Circuit, in and for Miami-Dade County, Florida, Case No. 

08-08006-CA-31 (the “Miami Case”). Other Pegasus entities 

subsequently joined the Miami Case as additional plaintiffs.

On October 24, 2008, Pegasus Aviation I, Inc. sued Varig in 

the Supreme Court of the State of New York, County of New York, 

Case No. 08603076 (the “New York Case”). The Court will

generically refer to all Pegasus entities, individually or 

collectively, as “Pegasus.”

Varig leased aircraft from Pegasus, and Pegasus sued Varig 

for breach of contract (nonpayment), conversion and replevin. 

Although Varig was the sole defendant in the Miami Case, when 

Pegasus sued Varig in New York, Pegasus sued Varig and, under 

alter-ego theories of liability, also sued the MP Entities.

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The Debt Assumption Agreements

Also in 2008, the MP Entities indirectly released Varig from 

liability for $250 million in debt due to CAT and Volo in exchange 

for a general release from claims by Varig. The terms of the 

releases are memorialized in two debt assumption agreements 

(together, the “DAAs”) that are dated December 31, 2008.1 Pursuant 

to the DAAs, Varig assigned to its direct parent, Volo dB, $250 

million in debt obligations owing to Volo or CAT (the “Debt 

Release”). Varig also agreed to release, indemnify and hold 

harmless Volo and the other MP Entities from all claims “that are

based in whole or in part on any act, omission, transaction, event 

or other occurrence taking place on or prior to [December 31, 

2008]” (the “Claims Release”). [DE #1-2 in Adv. Pro. No. 20-1243, 

p.6; DE #1-3 in Adv. Pro. No. 20-1243, pp.5-6].

The DAAs contain identical forum selection clauses that read 

as follows:

Any action or proceeding to interpret or enforce this 

Agreement may be brought in the Supreme Court of the 

State of New York, New York County, or the United States 

District Court for the Southern District of New York, 

should that court have subject matter jurisdiction over 

the dispute. Each party irrevocably submits to the 

personal jurisdiction of such courts in any action or 

proceeding to interpret or enforce this Agreement[.] 

Each party irrevocably waives, with respect to any 

action or proceeding to interpret or enforce this 

1 Copies of the DAAs are attached to the Complaint in Adv. Pro. 

No. 20-1243 [DE #1] as Exhibits “B” and “C”.

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Agreement, ([1]) any objection which it may have at any 

time to the laying of venue in the courts identified in 

this paragraph, (2) any claim that either of the courts 

identified in this paragraph is an inconvenient forum, 

and (3) the right to object that either court identified 

in this Section does not have personal jurisdiction over 

such party. Notwithstanding the foregoing, [Volo and 

CAT] may bring suit and enforce this Agreement in any 

court of competent jurisdiction in Brazil.

[DE #1-2 in Adv. Pro. No. 20-1243, pp.8-9; DE #1-3 in Adv. Pro. 

No. 20-1243, p.8]. The DAAs also include identical choice-of-law 

provisions that identify “the substantive laws of the State of New 

York, without regard to New York’s principles of conflicts of 

laws[,]” as the applicable law for purposes of interpreting or 

enforcing the DAAs. [DE #1-2 in Adv. Pro. No. 20-1243, p.10; DE 

#1-3 in Adv. Pro. No. 20-1243, pp.9-10].

The Reorganization in Brazil

On March 3, 2009, Varig filed for bankruptcy relief in Brazil. 

Varig’s Brazilian bankruptcy case began as a reorganization 

similar to bankruptcy cases filed in the United States under 

Chapter 11 of the U.S. Bankruptcy Code. The Brazilian bankruptcy 

court entered an order for relief on March 13, 2009.

On March 20, 2009, Volo extended $7.5 million in debtor-inpossession financing to Varig and obtained from Varig a general 

release of any claims by the Debtor against Volo or the MP Funds 

arising from transactions with the Debtor. [DE #2 in the Chapter 

15 Case, para. 31; DE #159 in the Chapter 15 Case, paras. 11-12]. 

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The Chapter 15 Petition and Attempt to Enjoin the New York 

Case Against MP Advisors

On March 31, 2009, the Debtor, through its initial foreign 

representative, Alexandre Sávio Abs Da Cruz (“Cruz”), filed in 

this Court (i) a petition for recognition of the Brazilian 

bankruptcy proceeding as a foreign main proceeding, Case No. 9-

15717 (the “Chapter 15 Case”) and (ii) an adversary proceeding 

against Pegasus for injunctive relief, Adv. Pro. No. 09-01298 (the 

“Pegasus Adv. Pro.”). In the Pegasus Adv. Pro., the then foreign 

representative, Mr. Cruz, moved on an emergency basis for issuance 

of a preliminary injunction barring Pegasus from commencing or 

continuing any action against the Debtor or against MP Advisors2

[DE #2 in the Pegasus Adv. Pro.]. 

 Before the Court ruled on Cruz’s emergency motion for a 

preliminary injunction, the Debtor agreed to allow Pegasus to 

proceed with the New York Case and, on April 21, 2009, Cruz 

dismissed without prejudice the Pegasus Adv. Pro. [DE #35 in the 

Pegasus Adv. Pro.]. On May 11, 2009, the Court entered an agreed 

order granting Pegasus stay relief [DE #78 in the Chapter 15 Case]. 

2 When the FR filed the Pegasus Adv. Pro., MP Advisors was the 

only non-debtor defendant in the New York Case. Pegasus later 

amended the complaint to add the MP Funds, Volo and Volo dB as 

additional defendants. The Second Amended Complaint is attached as 

Ex. D to DE #151 in the Chapter 15 Case.

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Also on May 11, 2009, the Court entered an order granting the 

Debtor’s petition for recognition of the Brazilian reorganization 

proceeding as a foreign main proceeding [DE #77 in the Chapter 15 

Case].

The New York Case settled in September 2017. The Debtor 

agreed to entry of a $41 million judgment. The terms of the 

settlement are otherwise confidential, including whether, and how 

much, the MP Entities who were defendants in the New York Action 

paid, or agreed to pay, to settle the claims against them.

The Brazilian Case is Converted to a Liquidation

On September 27, 2012, the Brazilian bankruptcy court entered 

an order compelling conversion of the Debtor’s foreign 

reorganization proceeding into a liquidation proceeding. [DE #122 

in the Chapter 15 Case, Ex. 1]. The Brazilian bankruptcy court 

appointed the Debtor’s current foreign representative, Dr. Vânio 

Cesar Pickler Aguiar (the “FR” or the “Foreign Representative”), 

to liquidate the Debtor by order dated October 11, 2012. [DE #122 

in the Chapter 15 Case, Ex.2].

The FR’s Pursuit of Claims Against MP: Discovery in the 

Chapter 15 Case

The FR served three subpoenas on MP Advisors and one subpoena 

on Volo LLC between August 2017 and December 2018. Those subpoenas 

generally sought discovery regarding MP’s relationship and loan 

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transaction history with the Debtor. For a detailed history of 

the initial subpoenas, see MatlinPatterson Global Advisers LLC and 

Volo Logistics LLC’s Opposition to the Foreign Representative’s 

Motion to Compel [DE #159 in the Chapter 15 Case]. 

On November 25, 2019, the FR attempted to discover information 

about the MP Entities and Volo dB by subpoenaing Pegasus Aviation 

I, Inc. and its former counsel in the New York Case, Coblentz, 

Patch, Duffy & Bass LLP [DE #149, DE #150 in the Chapter 15 Case, 

the “Pegasus Subpoenas”]. The Pegasus Subpoenas seek copies of 

the documents produced by the MP Entities to Pegasus in the New 

York Case (the “New York Discovery”). 

The FR moved to compel compliance with the Pegasus Subpoenas 

on April 13, 2020, and on May 22, 2020, the Court denied the FR’s 

motion to compel without prejudice to the FR serving Volo with a 

request for the New York Discovery [DE #151, DE #165 in the Chapter 

15 Case]. 

After entry of the Court’s order, on May 22, 2020, the FR 

served Volo with a single request for production of “[a]ll 

documents produced by the MatlinPatterson Defendants to the 

Pegasus Parties in connection with the New York Case” [DE #167 in 

the Chapter 15 Case, the “Rule 2004 Subpoena”].

The FR’s Pursuit of Claims Against MP: Filing Suit Against MP 

in Brazil

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On May 11, 2020, the FR filed a breach-of-fiduciary duty and 

veil-piercing action against all the MP Entities in Brazil, Case 

No. 0121755-70.2009.8.26.0100 (the “Brazilian Indemnity Case”)

[DE# 170-2 in the Chapter 15 Case]. The introductory paragraph 

of the Brazilian complaint describes the relief sought as follows: 

This lawsuit is being filed by the Bankrupt Estate with 

aims to seek a Court order recognizing MATLINPATTERSON 

as the de facto controller of Varig Logistica S/A 

(“VARIGLOG”) in the period from January 27, 2006 up to 

its bankruptcy, and to order said company to indemnify 

the Bankrupt Estate for its outstanding liabilities in 

consequence of a clear violation of its fiduciary duties 

towards the company, in an act of abuse of its 

controlling power, when it took actions for its own 

benefit only and against the interests of its controlled 

entity VARIGLOG, which not only worsened the company’s 

financial situation but also rendered its operations 

impossible.

[DE #170-2 in the Chapter 15 Case, p.2].

The MP Entities Seek to Enjoin the FR from Prosecuting the 

Brazilian Indemnity Case

On June 23, 2020, the MP Entities commenced the abovecaptioned adversary proceeding against the Debtor (the “Adversary 

Proceeding” or “Adv. Pro.”). In their complaint, Plaintiffs

allege that the Claims Release in the DAAs include the claims that 

are the subject of the Brazilian Indemnity Case.3 Plaintiffs seek

3 Although the record reflects that the Debtor has granted the MP 

Entities releases in three different agreements, the two DAAs and 

the March 20, 2009 debtor-in-possession financing agreement, the 

complaint in the Adversary Proceeding refers to only the DAAs and 

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declaratory relief finding that the Debtor released the MP Entities

from liability for the claims asserted in the Brazilian Indemnity 

Case and seek an injunction enjoining the FR from further 

prosecuting the Brazilian Indemnity Case. Alternatively, 

Plaintiffs ask this Court for relief from the automatic stay to 

file their action for declaratory and injunctive relief in New 

York.

Matters Under Advisement

On July 6, 2020, Volo filed a Motion to Stay or, in the 

Alternative, Quash VarigLog’s Rule 2004 Subpoena (the “Motion to 

Quash”) [DE #171 in the Main Bankruptcy Case]. On July 27, 2020, 

the FR filed a Motion for Order (I) Enforcing the Automatic Stay, 

and (II) Dismissing or, Alternatively, Abating the Adversary 

Proceeding Against the Debtor (the “Motion to Dismiss”) [DE #174

in the Chapter 15 Case; DE #14 in the Adv. Pro.]. The Court set 

both motions for hearing in October 2020, and the parties filed 

comprehensive briefs, declarations, and other papers in support of 

their respective positions. 

The FR also sought relief abroad in anticipation of the 

does not rely on the release granted in the debtor-in-possession 

financing agreement. However, MP Advisors and Volo rely on the 

release granted in the debtor-in-possession financing agreement in 

their opposition to the Foreign Representative’s discovery 

requests. [DE #159 in the Chapter 15 Case, paras. 11, 12, and 57].

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October 2020 hearing on the Motion to Dismiss. On September 4, 

2020, the FR filed in Brazil a Motion for Urgent Interlocutory 

Judicial Relief (the “Motion to Enjoin Adv Pro”) [DE #200-1 in 

Chapter 15 Case; DE #39-1 in Adv. Pro.]. The FR asked the 

Brazilian court to enjoin the MP Entities from further prosecuting 

the Adversary Proceeding and to find that the Brazilian bankruptcy 

court has exclusive jurisdiction to determine what, if any, impact 

the Claims Release in the DAAs might have on the Brazilian 

Indemnity Case. 

On September 4, 2020, the Brazilian bankruptcy court issued 

a preliminary ruling “recogniz[ing] its own absolute and exclusive 

competence to hear and try” the Brazilian Indemnity Case [DE #200-

2 in Chapter 15 Case; DE #39-2 in Adv. Pro.]. The Brazilian 

bankruptcy court rendered a final decision on the FR’s Motion to 

Enjoin Adv Pro on September 30, 2020 (the “September 30th

Decision”) [DE #42 in Adv. Pro.].

In referring to the Adversary Proceeding, the September 30th

Decision by the Brazilian bankruptcy court states that “the claim 

filed with the U.S. jurisdiction violates the absolute 

jurisdiction of this Court.” [DE #42 in Adv. Pro., p.3]. In 

addition, in reference to the Claim Release defense, the Brazilian 

bankruptcy court states that “any possible exclusion of the 

defendant’s liability, due to a contractual clause, should be 

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discussed in this [Brazilian bankruptcy] Court, as a matter of 

defense in relation to the indemnification claim made” by the FR, 

on behalf of the Debtor’s bankruptcy estate, in the Brazilian 

Indemnity Case. [DE #42 in Adv. Pro., p.4]. 

The Brazilian bankruptcy court rejected the FR’s request for 

injunctive relief, stating that it would not enjoin the defendants

from prosecuting the Adversary Proceeding because granting 

injunctive relief “would end up unduly intervening in another 

country’s jurisdiction.” Id. However, the Brazilian court also 

“declare[d] that it is the exclusive jurisdiction of this 

[Brazilian] bankruptcy court to hear and rule [on] any action that 

has a direct or indirect impact on claims for indemnification for 

civil liability filed against shareholders to the detriment of the 

bankrupt company, regardless of any contractual provision setting 

forth exclusion of liability, which should also be examined by 

this [Brazilian bankruptcy] Court.” Id.

On October 19, 2020, this Court conducted a hearing on (i) 

the FR’s Motion to Dismiss the MP Adversary Proceeding and (ii) 

Volo’s Motion to Quash the FR’s Rule 2004 Subpoena. The Court 

took both matters under advisement.

The MP Entities File 

Chapter 11 Petitions In New York

On July 6, 2021, the MP Entities and an affiliate, 

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MatlinPatterson Global Opportunities Partners (SUB) II, L.P.,

filed voluntary petitions for relief under Chapter 11 of the 

Bankruptcy Code in the United States Bankruptcy Court for the 

Southern District of New York. The cases are jointly administered 

under Case No. 21-11255 (collectively, the “New York Bankruptcy 

Cases”). Following the filing of the New York Bankruptcy Cases, 

and at the request of both the FR and the MP Entities, the Brazilian 

bankruptcy court entered a temporary stay of the Brazilian 

Indemnity Case.

On July 7, 2021, the MP Entities filed a Notice of Chapter 11 

Bankruptcy Filings and Request for Status Conference (the “Notice 

of Filing”) advising this Court of the New York Bankruptcy Cases

[DE# 47 and DE# 215 in the Chapter 15 Case]. On July 16, 2021, 

the Foreign Representative filed his Response to [Notice of Filing] 

[DE# 216 in the Chapter 15 Case]. In his Response, the FR argues 

that the automatic stay in the New York Bankruptcy Cases does not 

stay this adversary proceeding and, as such, this Court can rule 

on the pending Motion to Dismiss. The FR does concede in his 

Response that the pending Motion to Quash is stayed [DE# 216 in 

the Chapter 15 Case, p.3, n.4].

On August 14, 2021, the Court entered its Order Setting Status 

Conference and Briefing Deadlines [DE# 48 and DE# 217 in the 

Chapter 15 Case (the “Status Conference Order”)]. In that order, 

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the Court included its preliminary ruling that the FR interpreted 

correctly the automatic stay and that, unless persuaded otherwise, 

the Court intended to rule on the Motion to Dismiss. The Status 

Conference Order set briefing deadlines and scheduled a status 

conference for September 2, 2021.

On August 16, 2021, the MP Entities filed Plaintiffs’ Limited 

Response to the [Status Conference Order] [DE# 50 and DE# 221 in 

the Chapter 15 Case]. The response does not argue that the Court 

cannot, or should not, rule on the pending Motion to Dismiss. 

However, the MP Entities request that if the Court dismisses this

adversary proceeding, it does not adjudicate “issues that may or 

will arise in connection with the claims reconciliation process” 

in the New York Bankruptcy Cases.

On August 27, 2021, the Foreign Representative and MP Entities 

filed a Joint Status Report. The Report references an August 16, 

2021 Order entered by the Brazilian bankruptcy court staying the 

Brazilian Indemnity Case for 60 days pending a further report on 

the status of the New York Bankruptcy Cases. The Report also 

references an order in the New York Bankruptcy Cases setting a 

September 24, 2021 claims bar date.

At the September 2nd Status Conference, the MP Entities urged 

the Court not to rule on the Motion to Dismiss and offered to 

voluntarily dismiss this adversary proceeding. The Court advised 

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the parties that it would likely issue its opinion and the Court

restates the reasons here.

First, the Motion to Dismiss was fully briefed and argued 

and, after a long period under advisement, the Court was prepared 

to issue its opinion. Second, the Court had decided the merits 

of the Motion to Dismiss before the MP Entities filed the New York 

Bankruptcy Cases. Third, although the filing of the New York 

Bankruptcy Cases affects the disputes between the FR and the MP 

Entities, the history of the Brazilian bankruptcy case, the Pegasus 

disputes, and the battles over discovery waged in this Court are

still relevant and it may be useful for the New York bankruptcy 

court to review a cumulative background presented in the neutral 

context of a factual and procedural preamble to a judicial opinion.

Finally, in issuing its opinion, this Court is ruling solely

on the record presented in the contested matters pending in this 

Court and is not purporting to enter an advisory opinion on any 

issues existing now, or arising later, in the New York Bankruptcy 

Cases.

Volo’s Motion to Quash the FR’s Rule 2004 Subpoena

is Denied as Moot Because the Pendency of Volo’s New York 

Bankruptcy Case Stays Enforcement of the Rule 2004 Subpoena.

Volo seeks relief from its duty to respond to the Rule 2004 

Subpoena served by the FR on May 22, 2020. In its Motion to Quash, 

Volo asks the Court to (i) stay enforcement of the Rule 2004 

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Subpoena pending the Court’s adjudication of the Adversary 

Proceeding in which Volo seeks injunctive relief, (ii) quash the 

Rule 2004 Subpoena in toto because it was served in violation of 

the pending proceeding rule, or (iii) narrow the scope of the Rule 

2004 Subpoena “to categories that fairly pertain to any legitimate 

investigation of claims” [Motion to Quash, p.13, para. 40]. 

Because of the stay imposed upon the filing of Volo’s New York 

Bankruptcy Case, and as conceded by the FR, the FR cannot proceed 

with discovery against any of the MP Entities without first 

obtaining relief from the automatic stay in the New York Bankruptcy 

Cases. Therefore, Volo’s obligation to respond to the Rule 2004 

Subpoena is stayed, and its Motion to Quash is denied as moot and 

without prejudice to Volo renewing its request for relief in this 

Court if the FR obtains relief from the automatic stay in the New 

York Bankruptcy Cases.

Comity Considerations and the Pendency of the 

New York Bankruptcy Cases are Cause to Dismiss 

this Adversary Proceeding and to Deny the MP Entities’

Alternative Request for Relief From the Automatic Stay.

There is one fundamental issue presented in the Adversary 

Proceeding and in the Motion to Dismiss: Which court should 

determine whether the claims asserted in the Brazilian Indemnity 

Case are barred by the Claims Release? Should that defense be 

presented and litigated in Brazil, in this Court in the Adversary 

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Proceeding, or in a New York court, as requested alternatively by 

MP. As explained below, in the context presented here in a chapter 

15 case, principles of comity compel the decision to defer to the 

Brazilian bankruptcy court.

Referring back to, and summarizing the Brazilian bankruptcy 

court’s September 30th Decision, the Brazilian court made the 

following findings:

(i) The Brazilian bankruptcy court has the absolute and 

exclusive jurisdiction to hear and try the Brazilian Indemnity 

Case;

(ii) The Adversary Proceeding filed here by the MP Entities 

violates the absolute jurisdiction of the Brazilian bankruptcy 

court; and

(iii) The Claims Release issue should be determined by the 

Brazilian bankruptcy court as a matter of defense to the claims in 

the Brazilian Indemnity Case.

Section 1501 of the Bankruptcy Code emphasizes the 

importance of cooperation between this Court and the Brazilian 

bankruptcy court, and “[c]onsistent with section 1501,” section 

1525(a) of the Bankruptcy Code requires this Court to “cooperate 

to the maximum extent possible with a foreign court.” 11 U.S.C. §§ 

1501(a)(1), 1525(a). See In re Atlas Shipping A/S, 404 B.R. 726, 

738 (Bankr. S.D.N.Y. 2009) (“Once a case is recognized as a foreign 

Case 20-01243-RAM Doc 54 Filed 10/29/21 Page 19 of 22
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main proceeding, chapter 15 specifically contemplates that the 

court will exercise its discretion consistent with the principles 

of comity.” (citation omitted)). Therefore, in considering the 

relief requested in the Adversary Proceeding and in considering 

the Motion to Dismiss, this Court will respect the Brazilian 

bankruptcy court’s sovereign interpretation of the claims and 

defenses that are pending before it. See In re Oi S.A., 587 B.R. 

253, 273 (Bankr. S.D.N.Y. 2018) (“It is simply not this Court’s 

role to second guess the wisdom of the Brazilian courts or overrule 

their decisions, which would be fundamentally inconsistent with 

comity. See, e.g., SNP Boat Serv., 483 B.R. at 786; c.f. In re 

Rede, 515 B.R. at 100 (stating with respect to [the] public policy 

exception of Section 1506 that ‘it is not appropriate for this 

Court to superimpose requirements of U.S. law on a case in Brazil 

or to second-guess the findings of the foreign court.’)”).

The Adversary Proceeding will be dismissed.4

 The MP Entities’ alternative request for relief from the 

automatic stay is moot at this point. At the September 2nd status 

conference, counsel for the MP Entities confirmed that it is their 

4 To reiterate, the Court is ruling on the Motion to Dismiss based 

on the record prior to the filing of the New York Bankruptcy Cases, 

and in the context of this chapter 15 case. The Court expresses no 

opinion on which court should determine the Claims Release issue 

now that the MP Entities are chapter 11 debtors in the New York 

bankruptcy court.

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intention to assert objections to any claims filed by the FR in 

the New York Bankruptcy Cases but not to seek any affirmative 

relief against the FR or the Brazilian bankruptcy estate. 

Therefore, the MP Entities have no need for relief from the 

automatic stay in this chapter 15 case.

For these reasons, it is –

ORDERED as follows:

1. Enforcement of the FR’s Rule 2004 Subpoena is stayed.

2. Volo’s Motion to Quash is denied as moot.

3. The FR’s Motion to Dismiss the MP Adversary Proceeding 

is granted.

4. This adversary proceeding is dismissed.

5. Nothing in this Order is intended, or should be 

construed, as expressing any opinion on issues that are pending, 

or that may arise, in the New York Bankruptcy Cases.

###

Paul Singerman, Esq.

Berger Singerman LLP

1450 Brickell Ave., Suite 1900

Miami, FL 33131

Christopher Jarvinen, Esq.

Berger Singerman LLP

1450 Brickell Ave., Suite 1900

Miami, FL 33131

Paul Avron, Esq.

Berger Singerman LLP

350 E. Las Olas Boulevard

Case 20-01243-RAM Doc 54 Filed 10/29/21 Page 21 of 22
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Suite 1000

Fort Lauderdale, FL 33301

Juan Mendoza, Esq.

Sequor Law, PA

1111 Brickell Ave., Suite 1250

Miami, FL 33131

Gregory Grossman, Esq.

Sequor Law, PA

1111 Brickell Ave., Suite 1250

Miami, FL 33131

Kelly Koscuiszka, Esq.

Schulte Roth & Zabel, LLP

919 Third Ave.

New York, NY 10022

Tyler Robinson, Esq.

Simpson Thacher & Bartlett LLP

425 Lexington Ave.

New York, NY 10017

(Attorney Grossman is directed to serve a copy of this Order on 

all interested parties and to file a certificate of service)

Case 20-01243-RAM Doc 54 Filed 10/29/21 Page 22 of 22