U.S. Courts Will Defer to Brazilian Bankruptcy Proceedings Description Appeals court affirmed the decision of district court to dismiss a suit brought by creditor of a Brazilian bank that defaulted on payment of notes. At the time payment was due, the bank was under liquidation proceedings under Brazilian law.
Comity requires U.S. courts to respect such proceedings.
After the notes had matured, the intervention was converted into an extrajudicial liquidation, which is similar to bankruptcy proceedings in the U.S. Creditors, including Finanz, would be paid after liquidation, depending on status as creditors and funds available. Finanz presented the notes for payment at the New York branch of BESA, but was refused payment. Finanz then sued BESA in the U.S. for payment. The district court dismissed the suit in favor of the Brazilian proceeding. Under Brazilian law, bank liquidation is an extrajudicial proceeding.