Exhibit 15.4  UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK  xIn re:
  
  
  
  
  
  
  In a Proceeding Under § 304 of
  the Bankruptcy CodeBOARD OF DIRECTORS OF
  MULTICANAL S.A.,
  
  Case No. 04-10280 (ALG)Debtor in Foreign Proceedingx  MEMORANDUM OF DECISION  A P P E A R A N C E S:  CLEARY, GOTTLIEB, STEEN & HAMILTONAttorneys for Petitioner Board of Directors of Multicanal S.A.By:
  Lindsee P. Granfield, Esq.Kurt A. Mayr, Esq.One Liberty PlazaNew York, New York 10006PROSKAUER ROSE LLPAttorneys for Movant Argentinian Recovery Company LLC1585 BroadwayNew York, New York 10036By:
  Louis M. Solomon, Esq. Jeffrey Levitan, Esq.Colin A. Underwood, Esq.Caroline S. Press, Esq.Jennifer R. Scullion, Esq.Michael B. Smith, Esq.  ALLAN L. GROPPER UNITED STATES BANKRUPTCY JUDGE  Before the Court
is a proceeding under § 304 of the Bankruptcy Code, commenced by the Board
of Directors of Multicanal S.A. (Multicanal), a cable systems operator with
its principal offices in Buenos Aires and operations in Argentina, Paraguay and
Uruguay.  The § 304 proceeding seeks
recognition and enforcement in the United States of a restructuring plan that
Multicanal filed, on December 16, 2003, in connection with an acuardo preventivo extrajudicial(APE)


proceeding under Argentine
insolvency law.  Through that proceeding
Multicanal seeks to restructure certain of its outstanding debt, including five
series of notes in an aggregate amount of over U.S. $500 million (the Notes).  Multicanal concedes that it has been in
default on payment of principal and interest on the Notes since February 2002.  Some of the Notes are governed by an
indenture qualified under the Trust Indenture Act of 1939, 15 U.S.C. § 77aaa
et seq.(TIA).  Argentinian
Recovery Company LLC (ARC) is a Delaware limited liability company whose
members claim to hold beneficial interests in the Multicanal Notes aggregating
in excess of $157 million.  Three days
after Multicanal commenced its APE proceeding in Argentina, ARC brought two
lawsuits in the Supreme Court of the State of New York seeking a judgment in
the principal amount of its Notes plus interest, as well as declaratory and
injunctive relief that Multicanal cannot, by virtue of a provision in the TIA,
restructure ARCs Notes in the APE. 
Thereafter, on January 16, 2004, Multicanals board of directors,
as its representative, filed a petition under § 304 of the Bankruptcy Code
commencing a case ancillary to the Argentinian APE.  It also filed a motion in the § 304 case
seeking a temporary restraining order and preliminary injunction enjoining ARC
from proceeding with the State court lawsuits. 
On January 16, 2004, this Court granted a temporary restraining
order providing that, pending a hearing on a preliminary injunction, ARC was temporarily
restrained from (i) continuing to prosecute [the State court lawsuits]  (ii) taking
any other actions in the United States of America in furtherance of [the State
court lawsuits]  (iii) taking any other actions in the United States of
America to interfere with the administration of the Debtors restructuring
proceedings in Argentina  or (iv) commencing or continuing any other
action against the Debtor or its property, relating to any bond, note or bank
debt owed by the Debtor. (Order, dated January 16, 2004, pp. 3-4)  2


On January 21,
2004 and January 27, 2004, the Court held hearings at which the
restraining order was continued and discovery and scheduling of a hearing were
considered.1 ARC asserted, as it had in the State court actions,
that its rights as the holder of Notes issued under an indenture qualified
under the TIA could not, as a matter of law, be impaired or affected by a
foreign insolvency case and that, in effect, the § 304 proceeding was a
nullity as to it.  Accordingly, it was
proposed and the parties agreed that the Court would first determine whether,
as a matter of law, ARCs rights as the holder of Notes issued under an
indenture qualified under the TIA can be impaired by reason of recognition of a
foreign insolvency proceeding in the United States.  If the Court found that they can be so
impaired, it would proceed to determine the remaining issue, whether the Argentinian
APE proceeding, under all of the circumstances, satisfies the requirements of § 304
as to recognition.  Both parties have
submitted voluminous materials on this motion as to whether the APE meets the
criteria for recognition under the facts of this matter, and each asks the
Court to rule as a matter of law that it does or does not.  The Court declines the invitation by both
parties for a determination of an issue that the statute itself states should
be made, if timely contraverted, after trial. 11 U.S.C. § 304(b).  The only issue before the Court for decision
is whether ARCs rights under the TIA preclude the grant of relief to
petitioner under § 304 of the Bankruptcy Code.2  
 (1)On the day after the
January 27, 2004 hearing, ARC and two affiliates also filed an involuntary
Chapter 11 petition in this Court against Multicanal.  Multicanal promptly filed a motion to hold
ARC in contempt for having allegedly violated the temporary restraining order
precluding the commencement of actions against it, and it has also moved to
dismiss the involuntary petition. 
Neither of these motions is the subject of this decision. (2)Multicanal
also argues that ARC lacks standing to assert rights because the TIA affords
protection only to registered holders of bonds issued under a qualified
indenture, and ARC is not such a holder. 
Multicanal asserts, citing MacKay
Shields LLC v. Sea Containers, Ltd.,300
A.D.2d 165, 751 N.Y.S.2d 485 (1st Dept.2002), that New York State
courts have dismissed suits brought by beneficial holders rather than
registered holders.  As ARC contends,
however, the applicable section of the TIA, § 316(b), refers to holders
without qualification, and the Federal courts have permitted beneficial holders
to sue to vindicate TIA rights.  See Federated Strategic Income Fund
v. Mechala Group Jamaica Ltd.,No. 99
CIV 10517, 1999U.S. Dist. LEXIS
16996(S.D.N.Y. November 2, 1999);
see alsoDrachman v. Harvey,453 F.2d 722 (2dCir. 1971).  ARC has also obtained consent from the
registered holders, Cede & Co. and State Street Bank, to maintain these
proceedings and has detailed (without contradiction) its unsuccessful efforts
to obtain from Multicanal individual Notes issued in its own name.  In light of the above, ARC has standing to
enforce any rights it may have as a holder of Notes under § 316(b) of the
TIA.  3


Discussion  ARCs argument has
changed during the course of the briefing on this motion.  Its first memorandum started with the
language of § 316(b) of the Trust Indenture Act, 15 U.S.C. § 77ppp(b),
and in particular the clause that the right of any holder of any indenture
security to receive payment of the principal of and interest on such indenture
security  shall not be impaired or affected without the consent of such
holder. (emphasis in original) To this language ARC appended the familiar
contention that the plain meaning of the statute requires a finding in its
favor, and that § 316(b) constitutes an unequivocal guarantee that
the payment terms of the bonds shall not be impaired absent the
unanimous consent of all Bondholders. (ARC Memorandum, p. 1, emphasis again in
original) ARC contended, The statute does not limit this critical, federal
right by reference to any other federal laws, let alone by any foreign practice
that might be argued to govern the issuers assets. (Memorandum, p. 14)  ARC nevertheless
conceded, as it must, that the rights of holders to principal and interest on
bonds issued under a TIA-qualified indenture can be impaired by bankruptcy
proceedings.  After arguing that the plain
meaning of the statute admits of no exceptions and no judicial inquiry, ARC in
its opening memorandum retreated to the position that it is only through U.S.
bankruptcy proceedings that U.S. bondholders could arguably be said to have
understood that an exception to their absolute entitlement might occur.
(Memorandum, p. 18) ARC there declared: a bright line  U.S. Bankruptcy Code
proceedings yes, all others no . (Id.) But ARCs bright line was
again blurred.  In its reply brief
obliquely, and at oral argument clearly, ARC conceded that a foreign bankruptcy
proceeding could possibly impair a bondholders rights under the TIA  but only
in the event the foreign proceeding were identical to a proceeding  4


under U.S. law.  As shown below, none of ARCs contentions
find support either in the so-called plain meaning of § 316(b) of
the Trust Indenture Act or in established legal principles relative to U.S.
recognition of foreign insolvencies.  As a preliminary
matter, ARC overstates the Federally protected rights afforded to bondholders
by the TIA.  The Trust Indenture Act of
1939 sets forth certain requirements relative to indentures.  One purpose of the statute was to regulate
and reform prior practice whereby indentures contained provisions that
permitted a group of bondholders, often controlled by insiders, to agree to
amendments to the indenture that affected the rights of other holders 
so-called majority or collective action clauses.  See Sec. and Exch. Commn., Report on the
Study and Investigation of Protective and Reorganization Committees, Parts
I-VIII (1937-1940); Mark J. Roe, The Voting Prohibition in Bond Workouts,
97 Yale L.J. 232, 251-52 (1987); see also Bluebird
Partners, L.P. v. First Fidelity Bank, N.A. N.J., 85 F.3d 970, 974 (2d Cir. 1996).  Section 316(a) of the TIA provides
that a qualified indenture may contain certain limited collective action
clauses.  Section 316(b) then
declares that [n]otwithstanding any other provision of the indenture to be
qualified, the right of any holder to institute suit for principal or interest
on the holders bonds or debentures cannot be impaired without consent.  As the court described § 316(b) in UPIC & Co. v. Kinder-Care Learning Ctrs., Inc., 793 F.Supp. 448, 452 (S.D.N.Y.
1992), Section 316(b)  proscribes certain  majority action
clauses  [and] expressly prohibits use of an indenture that permits
modification by majority security holder vote of any core term of the
indenture, i.e., one affecting
a security holders right to receive payment of the principal of or interest on
the indenture security.  ARC correctly
argues that the TIA gives rise to Federal statutory rights designed to protect
investors.  See Bluebird
Partners, L.P., 85
F.3d at 974; Zeffiro v. First Penn. Banking and  5


Trust Co., 623 F.2d 290, 299 (3d Cir.
1980).  But all holders of notes that are
absolute promises to pay have contract rights against the issuer that cannot be
impaired without consent.  This is true
whether the note is issued in a series under a TIAqualified indenture, under an
indenture not qualified under the Trust Indenture Act, or issued directly by
the borrower to the lender without any indenture at all.  Assuming there is no limitation in the
applicable note as to the right of the holder to sue, each holder has a
contractual right to principal and interest and to commence a lawsuit if these
are not paid when due.  For holders of
notes issued under a qualified indenture, this right is protected against
impairment through the mechanism of a collective action clause.  See § 316(b) of the Trust Indenture
Act, whose interlocutory clause is, [n]otwithstanding any other provision of
the indenture to be qualified. More fundamentally, the right against
impairment is also protected, as to all holders (whether under a qualified
indenture or otherwise), by the Constitutional prohibition against the impairment
of contracts.  U.S. Const. Art. I, § 10;
see also the Sinking-Fund Cases, 99 U.S. 700 (1878) (prohibition
binding on Federal government by virtue of due process of law).  Section § 316(b) does not
create rights against impairment of contractual obligations that are already
imbedded in the Constitution; it places a further gloss on such rights by
restricting the use of collective action clauses.  After overstating
its rights under § 316(b), ARC argues that even if these rights can be
impaired by a filing under the U.S. Bankruptcy Code, they cannot be affected by
a proceeding under foreign law (unless perhaps if that proceeding is identical
to a U.S. proceeding).  The short answer
to ARCs contention is Canada Southern Ry. Co. v.
Gebhard, 109 U.S. 527
(1883), where a group of American holders of bonds issued under an indenture by
a Canadian railroad sued to obtain a judgment for principal and interest on the
bonds.  The company defended on the
ground that the Parliament of Canada had enacted the Canada Southern
Arrangement Act, 1878,  6


providing for a scheme of
arrangement under which new bonds would be issued to replace the prior
bonds.  The U.S. holders argued that the
scheme of arrangement, to which they had not consented, was imposed by means of
precisely the type of contractual impairment that was prohibited by the U.S.
Constitution and should not be recognized by the U.S. courts.  The Supreme Court rejected the argument and
ordered that judgment be entered for the railroad.  It declared:  [E]very person who deals
with a foreign corporation impliedly subjects himself to such laws of the
foreign government, affecting the powers and obligations of the corporation
with which he voluntarily contracts, as the known and established policy of
that government authorizes.  To all
intents and purposes, he submits his contract with the corporation to such a
policy of the foreign government, and whatever is done by that government in
furtherance of that policy which binds those in like situation with himself,
who are subjects of the government, in respect to the operation and effect of
their contracts with the corporation, will necessarily bind him.  109 U.S. at 537-38.  Gebharddid
not involve a collective action clause under an indenture but a foreign statute
of a type specifically prohibited by the U.S. Constitution.  However, if foreign law can under certain
circumstances trump the U.S. Constitution and preclude bondholders from
enforcing their contractual rights, as Gebhardholds,
there is no basis for adopting the principle espoused by ARC, that foreign law
can under no circumstances override § 316(b) of the Trust Indenture
Act (except perhaps if the foreign law is identical in all respects to U.S.
law).  Nor can Gebhardbe
limited to the effect of a foreign proceeding on State rather than Federal
rights.  It is the seminal decision on
granting comity to foreign insolvency proceedings.  In Cunard
S.S. Co. v. Salen Reefer Services AB, 773 F.2d 452, 458 (2d Cir. 1985), the Second Circuit stayed
arbitration proceedings in favor of a foreign bankruptcy case and quoted Gebhard, 109
U.S. at 539, as follows:  7


Unless all parties in
interest, wherever they reside, can be bound by the arrangement which it is
sought to have legalized the scheme may fail. 
All home creditors can be bound. 
What is needed is to bind those who are abroad.  Under these circumstances the true spirit of
international comity requires that schemes of this character, legalized at
home, should be recognized in other countries.  Cunardis
a leading example of a series of cases in which the Second Circuit has affirmed
the dismissal of a U.S. lawsuit based solely on the grant of comity to a
foreign insolvency proceeding.  As the
Circuit Court stated in Finanz AG Zurich v. Banco
Economico S.A., 192
F.3d 240, 246 (2d Cir. 1999), [w]e have repeatedly noted the importance of
extending comity to foreign bankruptcy proceedings.American courts regularly
defer to such actions. See also Victrix S.S. Co., S.A. v.
Salen Dry Cargo A.B., 825
F.2d 709, 713-14 (2d Cir. 1987); Ecoban Finance Ltd v.
Grupo Acerero del Norte, S.A. de C.V., 108 F.Supp.2d 349 (S.D.N.Y. 2000), affd. 242 F.3d 364 (2d Cir. 2001), cert. denied 534 U.S. 814
(2001).  Foreign insolvency cases have
also been held to trump Federally protected rights of U.S. creditors under
the Federal securities laws.  See Allstate Life Ins. Co. v. Linter Group Ltd., 994 F.2d 996, 999 (2d Cir.
1993)(dismissing bondholders federal securities fraud action to grant comity
to Australian insolvency proceeding); Lindner Fund, Inc. v.
Polly Peck Intl PLC, 143
B.R. 807, 807-11 (S.D.N.Y. 1992)(dismissing federal securities fraud
action in favor of foreign reorganization based on comity); Smith v. Dominion Bridge Corp., No. 96-7580, 1999 U.S. Dist. LEXIS 2131 (E.D. Pa. Mar. 2,
1999)(same).  In § 304 of
the Bankruptcy Reform Act of 1979, 11 U.S.C. § 304, Congress provided an
explicit scheme for the recognition and enforcement in the United States of
foreign insolvency proceedings.  In
addition to raising the defense of comity in non-bankruptcy court litigation,
or filing a voluntary and involuntary plenary proceeding in the United States,
the foreign representative of a foreign estate was given the power to file an
ancillary proceeding under  8


§ 304 of the Bankruptcy
Code.  Section 304 explicitly
authorizes the Bankruptcy Court to stay the enforcement in the U.S. of actions
against property involved in the foreign proceeding, as well as to grant orders
providing for the turnover of any property of the foreign debtor to be
administered in the foreign case.  In
determining whether to grant relief under § 304, the Bankruptcy Court must
be guided by what will best assure an economical and expeditious
administration of such estate, consistent with -  (1)just treatment of all holders of claims
against or interests in such estate; (2)protection of claim holders in the United States
against prejudice and inconvenience in the processing of claims in such foreign
proceeding; (3)prevention of preferential or fraudulent
dispositions of property of such estate; (4)distribution of proceeds of such estate
substantially in accordance with the order prescribed by this title; (5)comity; and (6)if appropriate, the provision of an
opportunity for a fresh start for the individual that such foreign proceeding
concerns.  11 U.S.C. § 304(c) (2003).  Section 304
does not require that the foreign proceeding be identical to the U.S.
proceeding, and the cases do not require this. 
See Bank of New York & JCPL Leasing Corp. v.
Treco (In re Treco), 240
F.3d 148, 158 (2d Cir. 2001); In re Axona Intl Credit &
Commerce Ltd., 88
B.R. 597, 610 (Bankr. S.D.N.Y. 1988), affd, 115 B.R. 442 (S.D.N.Y. 1990), appeal dismissed, 924
F.2d 31 (2d Cir. 1991).  ARC argues that
the APE which Multicanal has filed in Argentina has certain characteristics
which, in effect, result in the proceeding being particularly offensive to the
asserted rights of U.S. noteholders under § 316(b) of the TIA.  These allegedly offensive APE
characteristics, in ARCs view, authorize collective action of the type that
would be forbidden under the TIA. 
Petitioner disputes ARCs characterization of the APE and contends that
the TIA does not establish a touchstone for the qualification of foreign law
under § 304.  ARC also argues that
if any foreign proceeding can ever pass muster if TIA-qualified bonds are
involved,  9


the foreign case must be
identical to a U.S. case.  Suffice it to
say that the issue for further determination is whether the APE is entitled to
recognition under § 304, not whether the APE is identical to Chapter 11 or
even a prepackaged Chapter 11.  As stated
in In re Brierley, 145 B.R. 151, 160 (Bankr. S.D.N.Y. 1992), section 304
was intended to arm the bankruptcy courts with the maximum flexibility possible
in handling ancillary cases in light of principles of international
comity and respect for the laws and judgments of other nations.[T]his
articulated legislative intent warrants construction of the statute so as to
further rather than stymie the Congressional desire. See also H.R. Rep. No. 95595,
95th Cong., 1st Sess. 324 (1977); S. Rep. No. 95-989, 95th Cong., 2d
Sess. 35 (1978).  ARCs contention,
that § 304 and the Trust Indenture Act must be read together, is
undoubtedly correct.Connecticut Natl. Bank v. Germain, 503 U.S.
249, 253 (1992).  The Court also agrees with
ARCs point that there is no real conflict between the two statutes.  As discussed above, the Trust Indenture Act
governs the rights of individual holders under a qualified indenture and
provides that certain of these rights cannot be impaired by a majority or
supermajority of other holders; § 304 provides a means for determining
whether a foreign insolvency proceeding is entitled to recognition in the
United States and whether the foreign representative is entitled to certain
relief.  There is no basis for ARCs
further premise that somehow the rights granted under the Trust Indenture Act
must be construed to rank supreme. Indeed, if there were need for a bright
line  to quote ARC, U.S. Bankruptcy Code proceedings yes, all others no 
Multicanals § 304 petition would fall on the yes side of the line as it
is a U.S. Bankruptcy Code proceeding.  Since the two
statutes can easily be read together, ARCs three methods for harmonizing the
demands of the TIA and the Bankruptcy Code are not required.  They are also  10


not viable.  First, ARC suggests that Multicanal could
structure its APE to protect the rights of the Noteholders under the TIA.  Although Multicanal could doubtless choose
such an approach to its restructuring, compelling Multicanal to do so would be
to deny recognition of a foreign proceeding that might otherwise meet the
standards of § 304.  ARC also
proposes that issuers holding TIA-governed bonds, including foreign issuers,
could commence a plenary bankruptcy case in the U.S.  Once again, this approach ignores a
fundamental purpose of § 304, which is to avoid the inconvenience and
expense of a full U.S. Chapter 11 proceeding. 
See In re Treco, 240 F.3d at 154; Cunard S.S. Co., 773 F.2d at 455.  Finally, ARC suggests that the Court permit
the restructuring of TIA-governed bonds only in foreign proceedings that afford
noteholders the same substantive and procedural protections that would exist in
a U.S. Chapter 11 proceeding.  As noted
above, § 304 does not require that the laws governing a foreign proceeding
be identical to those of the U.S.; rather, the foreign proceeding must meet the
standards of § 304.  See In re Treco, 240
F.3d at 158; In re Axona Intl Credit & Commerce
Ltd., 88 B.R. at
610.  Comity is one of
the factors to be considered in determining whether to grant relief under § 304,
and ARC correctly argues that comity demands due regard for rights under U.S.
law.  It has long been established that
in determining whether to grant comity to a foreign proceeding, courts must
consider both the nature of the U.S. rights that would be affected as well as
the foreign interests involved.  Hilton v. Guyot, 159
U.S. 113 (1895); see also Maxwell Communication
Corp. v. Societe Generale (In re Maxwell Communication Corp.), 93 F.3d 1036, 1047-48 (2d
Cir. 1996); Underwood v. Hilliard
(In re Rimsat, Ltd.), 98
F.3d 956, 963 (7th Cir. 1996).  But ARC
misstates the policy issues, as well as the nature of the bondholders rights
protected by § 316(b) of the Trust Indenture Act.  ARC cites a Statement of Interest recently
filed by the United States in a suit by bondholders attempting to obtain a
judgment against the  11


Republic of Argentina, which
had defaulted on its sovereign debt.  The
U.S. government there stated that it is governmental policy that holders of
foreign sovereigndebt have a right to obtain a
judgment on their debt under appropriate circumstances.  This has long been national policy.  See Allied Bank Intl v. Banco
Credito Agricola de Cartago,
757 F.2d 516 (2d Cir. 1985).  But
a sovereign cannot file an insolvency case, and there are no recognized
proceedings available to prevent holders of debt, including recalcitrant
minority bondholders, from pursuing their claims against a sovereign debtor.  As the Statement
of Interest of the United States notes, however, an increasingly accepted
procedure for promoting the consensual restructuring of foreign sovereign debt
 and one that the United States government encourages  is for sovereign debt
issuers to include a provision in a governing indenture that would permit a
super-majority of bondholders to amend a debt instrument  e.g., to reduce the amount of
principal or interest owing  even when a minority creditor refuses to agree to
the amendment. See Statement of Interest of the United States, ARCs Ex. F at
4; see also Lee C. Buchheit and G. Mitu Gulati, Sovereign Bonds and the
Collective Will, 51 Emory L.J. 1317, 132930 (2002); Lex Rieffel, Restructuring Sovereign Debt: The Case for Ad Hoc
Machinery, ch. 12
(Brookings 2003).  This is precisely the
type of clause that would be precluded in a qualified indenture by § 316
of the Trust Indenture Act, but it illustrates that policy issues regarding
collective action clauses have changed in the years since the TIA was adopted
at the urging of the SEC under its then chairman, William O. Douglas.  See Roe, The Voting Prohibition in Bond
Workouts, 97 Yale L.J. at 234:  [I]n the half-century
since the prohibitions enactment both the bond market and bankruptcy
reorganizations have changed considerably from the SECs perception of them in
the 1930s.  Regarding bankruptcy,
Douglas rationales and their concomitant protective framework were shattered
by the 1978 Bankruptcy Code, which encourages
negotiated solutions by majority vote, the very kind of vote  12


prohibited under the
Trust Indenture Act.  Furthermore, the
prohibition of bondholder votes provides little protection in todays heavily
institutionalized bond market.  Better
ways can be found to accomplish the little that the prohibition now
achieves.  The prohibition is also
sharply at odds with prevailing mechanisms present in other corporate
recapitalizations, such as stockholder votes in mergers and preferred
stockholder votes in recapitalizations.  See also Marcel
Kahan, Rethinking Corporate Bonds: The Trade-Off Between Individual and
Collective Rights, 77 N.Y.U. L. Rev. 1040 (2002).  Changing public
policy with respect to collective action clauses, of course, cannot override a
statute limiting their use in indentures that must be qualified under the
TIA.  The point here is merely that there
is no reason to accept ARCs contention that it would be good policy to exalt
bondholders individual rights over recognition of foreign insolvency
proceedings.  In ARCs formulation this
would mean that foreign companies that issued debt in the United States under a
qualified indenture could never reorganize under the laws of their home
jurisdiction unless their nation adopted a reorganization statute identical to
ours or unless the foreign entity filed a full U.S. Chapter 11 proceeding, with
all of its attendant expense.  Section 304
was adopted to recognize and enforce foreign proceedings where appropriate, not
to require adoption of U.S. law.  See In re Treco, 240
F.3d at 153-54; In re Maxwell
Communication Corp., 93
F.3d at 1053; Goerg v. Parungao (In re Goerg), 844 F.2d 1562, 1568 (11th Cir. 1988).  Moreover, some foreign entities cannot file a
U.S. bankruptcy case.  For example, if a
foreign entity has no property in the United States, and consequently is not
eligible to file a plenary case under § 109 of the Bankruptcy Code, ARCs
limitation of the scope of § 304 would mean that certain foreign entities
would be powerless to prevent minority U.S. creditors from obtaining judgments
here.  Although the holders could not
enforce such judgments in the U.S. immediately (there being no property here), they
could use them to preclude or impede the foreign entity from ever doing  13


business in the United States
in the future.  This result would hardly
be consistent with sound insolvency principles that foster an entitys attempt
at rehabilitation.  See Manville Corp. v. Equity Sec. Holders Comm. (In re Johns-Manville
Corp.), 801 F.2d 60,
64 (2d Cir. 1986).  ARCs argument
would also effectively create two classes of U.S. creditors.  In ARCs view, the holder of a note issued
under a qualified indenture could not have its debt restructured under a
foreign proceeding whereas another creditor, with an equally enforceable note
issued directly by the debtor, would hold debt that presumably could be
adjusted in such manner.  Holders of equally
valid claims should have similar rights of collection.  See Liona Corp. v. PCH
Assocs.  (In re PCH Assocs.), 949 F.2d 585, 598 (2d Cir.
1991).  A sound policy would not create
such a disparity or expectations thereof without a very clear statutory basis 
one that does not exist here.  ARC finally argues
that its property rights must be determined under U.S. law prior to entry of
an order under § 304, citing In re Koreag Controle et
Revision S.A., 961
F.2d 341 (2d Cir. 1992).  Koreag involved competing claims to
property in the United States of a U.S. claimant and a foreign representative;
the Second Circuit held that prior to transfer of the property abroad, the
nature of the foreign estates rights in the property should be determined by
the U.S. court under the governing law of the situs of the property, New
York.  Assuming, arguendo, that ARC has property rights at
issue here, this Court determines that ARC has no rights that could not be
adjusted in a foreign insolvency proceeding entitled to recognition under § 304.  Koreagalso
answers ARCs further contention that this Court should defer to the courts of
New York State to declare its rights. 
Under Koreagthis Court has the power
and obligation to determine the issues that ARC has raised, and this decision
constitutes that determination.  14


Conclusion  For the reasons
stated above, the Court denies ARCs motion to dismiss the § 304 petition
on the ground that the Trust Indenture Act would prohibit impairment of its
rights by a foreign insolvency proceeding (unless perhaps that proceeding were
identical to one under U.S. law). 
Petitioner shall settle an appropriate order on five days notice.  There is reserved for further decision the
motion by petitioner to dismiss the involuntary Chapter 11 case commenced by
ARC, as well as petitioners motion to hold ARC in contempt for having filed
the involuntary petition without obtaining relief from the restraining order
then in effect.  As ARC suggests, if the
involuntary case is not dismissed, the trial should also encompass issues
arising under § 305(b) of the Bankruptcy Code, which permits a court
to dismiss a plenary bankruptcy case on the basis of the same factors that are
relevant in determining whether to sustain a § 304 petition.  Dated:
  New
  York, New YorkMarch 12,
  2004/s/ Allan L. GropperUNITED STATES BANKRUPTCY JUDGE  15