The Judge held he was satisfied that the requirements of the Regulations had been met, however altered the order sought by the applicants due to a consequence of DBD being dissolved.
DBD was part of a group of companies known as the Schahin Group, in April 2015 the founders of the group applied, in Brazil, for twenty-eight companies within the group to be placed into judicial reorganisation due to financial difficulties partly as a result of a high profile criminal investigation in Brazil. The judicial reorganisation was subsequently converted into bankruptcy proceedings as DBD failed to honour obligations in their reorganisation plan. The trustee and representative sought recognition of the Brazilian proceedings in England in order to obtain evidence which could assist the criminal investigation.
Significantly, six months before DBD was subject to a Brazilian bankruptcy order, DBD was dissolved and all property and rights vested in, or on trust for DBD were deemed to vest in the Crown. The Judge held that the dissolution of DBD did not prevent the court from recognising the Brazilian proceedings. The Judge cited Section 221(5) and Section 225 Insolvency Act 1986 which allows the courts to wind up dissolved companies registered outside the UK, stating that it would be perverse to refuse to recognise the foreign liquidation of DBD.
However, in making the recognition order the Judge could not ignore the fact that DBD's assets were bona vacantia, and ordered that the foreign representatives would not be entrusted with the administration and realisation of those assets. Instead the Judge gave permission to the foreign representatives to apply to restore DBD to the register, an essential step towards dealing with its assets.
Deep Black Drilling LLP sub nom Osana Mendonca v KPMG Corporate Finance (Sao Paulo, Brazil) (2020)