Pg 1 of 18 DENTONS US LLP D. Farrington Yates Oscar N. Pinkas 1221 Avenue of the Americas New York, New York 10020 Tel: (212) 768-6700 Fax: (212) 768-6800 Counsel for Boris K. Frederiksen, in his capacity as bankruptcy trustee of IT Factory A/S UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: IT FACTORY A/S, Debtor in a Foreign Proceeding. Chapter 15 Case No. 13-10954 (MG) Recognition Request Pending VERIFIED PETITION FOR RECOGNITION UNDER CHAPTER 15 AND FOR ADDITIONAL RELIEF UNDER 11 U.S.C. 1521 Boris K. Frederiksen, in his capacity as duly authorized bankruptcy trustee (the Trustee ) and putative foreign representative of IT Factory A/S ( ITF or the Company ), by and through his United States counsel, Dentons US LLP, respectfully submits this verified petition (the Petition ) seeking the entry of the proposed order attached as Exhibit A (the Recognition Order ) (i) recognizing ITF s insolvency proceeding in Denmark, Case No. B 1997/08-A, K 1282/08-A (the Danish Bankruptcy Proceeding ) as a foreign main proceeding under sections 1502(4), 1515, and 1517 of title 11 of the United States Code (the Bankruptcy Code ), (ii) recognizing the Trustee as the foreign representative of ITF as defined in section 101(24) of the Bankruptcy Code, and (iii) granting related relief under section 1521 of the Bankruptcy Code. The Trustee also relies on the Declaration of Boris K. Frederiksen in Support
Pg 2 of 18 of Verified Petition for Recognition Under Chapter 15 and for Additional Relief Under 11 U.S.C. 1521 (the Frederiksen Declaration ) filed concurrently herewith in support of the Petition and respectfully represents as follows. PRELIMINARY STATEMENT On December 1, 2008, the Bankruptcy Division of the Maritime and Commercial Court (Sø- og Handelsrettens Skifteafdeling) ( the Danish Court ) commenced the Danish Bankruptcy Proceeding (konkursdekret) pursuant to Part II of the Danish Bankruptcy Act, and appointed Mr. Boris K. Frederiksen as Trustee (kurator) of ITF s bankruptcy estate. (See Certified English Translation of Court Proceedings Conducted December 1, 2008, attached hereto as Exhibit B, hereinafter the Bankruptcy Order ). Under Danish law, the Trustee is the sole person entitled to act on behalf of ITF in respect of the Danish Bankruptcy Proceeding and is responsible for, inter alia, managing the bankruptcy estate of ITF; identifying and collecting debts owed to ITF; liquidating and monetizing the assets of ITF; collecting a list of ITF s creditors; contesting legal actions against the estate of ITF; identifying and challenging unjustified claims against the estate; and identifying, investigating, and pursuing claims against third parties. (Frederiksen Decl. 17-18.) Pursuant to sections 107-112 of the Danish Bankruptcy Act, the Trustee is empowered to preserve, collect, and liquidate all assets of ITF, wherever located, without additional approval or permission from the Danish Court. (Id. at 17.) Thus, the Trustee is entitled to commence this case under chapter 15 of the Bankruptcy Code. In addition to recognition, the Trustee seeks relief under section 1521 of the Bankruptcy Code entrusting him with the administration of ITF s assets located within the territorial jurisdiction of the United States, and enabling him to take discovery and obtain information in - 2 -
Pg 3 of 18 connection with ITF s assets and affairs. JURISDICTION AND VENUE 1. This Court has jurisdiction to consider this Petition pursuant to 28 U.S.C. 157 and 1334, and the Amended Standing Order of Reference (Preska, C.J.) dated January 31, 2012. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2). Venue is proper in this Court pursuant to 28 U.S.C. 1410. BACKGROUND A. ITF s Business and Discovery of Leasing Fraud 2. ITF is a stock corporation organized under Danish law. (Frederiksen Decl. 7.) ITF was originally registered on January 15, 2003 under the name GFKJURA 955 A/S. (Id.) On August 21, 2003 its name was changed to ITF A/S and on July 27, 2006 it was changed to IT Factory A/S, its current name. (Id.) 3. ITF was established to develop and market software products and to offer consulting services in connection with those products. (Id. at 9.) 4. During the years 2003 through 2004, ITF's main activities according to annual reports were development and marketing of various software products. The Trustee has no knowledge of the actual activities during these years. (Id.) 5. In 2008, members of the board of ITF discovered certain irregularities in relation to the Company s leasing contracts. (Id. at 10.) Thereafter, commencing on November 28, 2008, the ITF board conducted a thorough examination of ITF s books and records. (Id.) This investigation revealed that the majority of its revenues from 2005 through the institution of the Danish Bankruptcy Proceeding were derived from a fraudulent software license-leasing scheme. (Id.) Pursuant to this scheme, ITF sold nonexistent software licenses to various companies, at least three of which were located in the U.S. and each of which was located outside of Denmark. - 3 -
Pg 4 of 18 (Id.) These companies, in turn, resold the nonexistent licenses to innocent Danish leasing companies who then leased them to ITF. (Id.) 6. Stein Bagger ( Bagger ), ITF s CEO, upon information and belief, was at the center of the fraud and for years had executed contracts on behalf of ITF to lease software licenses that did not exist. (Id. at 11.) Upon commencement of the investigation, Bagger absconded to Dubai. Immediately thereafter, on December 1, 2008 ITF s board members filed a bankruptcy petition on behalf of the Company in Denmark. (Id.) 7. The Trustee is aware of a wholly owned U.S. subsidiary of ITF IT Factory, Inc ( ITF, Inc. ). (Id. at 13.) The Trustee, however, has limited knowledge of the activities conducted by ITF, Inc., including whether there is any value to its equity or whether there are any claims against it. (Id.) B. Danish Bankruptcy Proceeding, Appointment of the Trustee, and the Trustee s Powers and Duties 8. On December 1, 2008, the Danish Court commenced the Danish Bankruptcy Proceeding under Part II of the Danish Bankruptcy Act. (Id. at 14; Bankruptcy Order.) Pursuant to the Bankruptcy Order, ITF was prohibited from continuing to do business, making any payments, or disposing of any assets. (Frederiksen Decl. 15.) 9. On December 1, 2008, the Danish Court also appointed Mr. Frederiksen as the Trustee (kurator) of the ITF bankruptcy estate. (Id. at 14.) 10. Under sections 107-112 of the Danish Bankruptcy Act, the Trustee is vested with the power and authority to collect, administer, monetize and dispose of all assets of the ITF bankruptcy estate. (Id. at 17.) Furthermore, pursuant to section 29 of the Danish Bankruptcy Act, upon appointment of the Trustee, ITF s management was divested of the right to operate the Company or control or dispose of its assets, and that power is solely vested in the Trustee. (Id.) - 4 -
Pg 5 of 18 11. The Trustee s Duties under the Danish Bankruptcy Act include: Assuming immediate possession and management of all assets of the Company, pursuant to section 110 of the Danish Bankruptcy Act; Compiling a list of all creditors according to the Company s books and records, pursuant to section 130 of the Danish Bankruptcy Act; Liquidating and monetizing the Company s assets with an eye toward maximizing value for distribution, pursuant to section 38 of the Danish Bankruptcy Act; Exercising all legal rights available to the Company or the Trustee to contest claims against the estate; Defending the estate against unjustified claims; and Investigating and, where appropriate, pursuing claims against third parties, including but not limited to avoidance actions under Danish law, pursuant to chapters 8 and 17 of the Danish Bankruptcy Act. (Id. at 18.). 12. Generally speaking, a Danish Bankruptcy Proceeding similar to chapter 7 under the Bankruptcy Code serves to preserve and liquidate the assets of the debtor for the benefit of all creditors, wherever located, and to treat all creditors equally pursuant to the claims priority scheme. (Id. at 17.) Similar to property of the estate under section 541 of the Bankruptcy Code, pursuant to section 32 of the Danish Bankruptcy Act, the Danish Bankruptcy Proceeding concerns the entire estate of ITF as of the date of the Bankruptcy Order, including any assets located abroad and those ITF acquires during the bankruptcy. (Id.) C. Notice of the Danish Bankruptcy Proceeding and the Danish Claims Process 13. Upon initiation of a Danish bankruptcy case, the Danish Court publishes a notice on a public website located at www.statstidende.dk. (Id. at 19.) In this case, the notice was published on December 4, 2008. (Id.) Additionally, on December 4, 2008 the Trustee mailed letters to all known creditors of ITF notifying them of the Danish Bankruptcy Proceeding and of their right to file a claim, pursuant to section 125(1) of the Danish Bankruptcy Act. (Id.) During the administration of a bankruptcy case the Trustee must periodically report on the status of the - 5 -
Pg 6 of 18 case pursuant to sections 125(2) and 125(3) of the Danish Bankruptcy Act. (Id.) These reports become part of the record with the Danish Court and are available for inspection by creditors. (Id.) 14. Under Danish bankruptcy law, all creditors of ITF are entitled to file their respective claims against the bankruptcy estate, which claims are subject to any enforceable nonbankruptcy rights of preference, priority, or security, similar to the priority and distribution scheme under the U.S. Bankruptcy Code. (Id. at 20.) Under Danish bankruptcy law, the claims of secured creditors are generally not affected by a bankruptcy proceeding. (Id.) 15. Under the Danish Bankruptcy Act, the Danish Court does not set a bar date for filing claims against the estate, and claims may be filed at any time until the final meeting of creditors (Id. at 21.) Once a creditor has filed a claim, it will receive a letter from the Trustee acknowledging the filing. If there are sufficient funds in the estate, the Trustee will review the claims and notify each creditor by mail, advising whether the Trustee disputes all or part of the claim. (Id.) A meeting is then held at the Trustee s office during which a creditor may present any proof supporting its claim. (Id.) At the conclusion of the meeting, the Trustee will render his final determination of the claim. (Id.) If a creditor disputes the Trustee s final determination, it may institute a declaratory judgment action before the Danish Court within four weeks of the conclusion of the meeting. (Id.) 16. Once all filed claims have been determined, and all other administration related to the estate has been finalized, the Trustee files a distribution list with the Danish Court, an accounting of the receipts and costs incidental to the bankruptcy proceeding, and a report regarding the Trustee s administration of the case. (Id. at 22.) After the Danish Court has reviewed those documents, it will set a date for the final meeting of creditors and creditors may - 6 -
Pg 7 of 18 continue to file claims until that date. (Id.) 17. Once all claims have been filed and processed and the Trustee has completed the realization and liquidation of the assets of the Company, the Trustee will distribute all assets to verified claim holders subject to applicable priorities, pari passu, similar to a final distribution under chapter 7 of the Bankruptcy Code. (Id. at 23.) Once administration of the estate and distribution is finalized, the bankruptcy estate ceases to exist and any claims that were not filed and administered through the bankruptcy will be legally barred, similar to chapter 7 of the U.S. Bankruptcy Code. (Id.) The Trustee s Administration of the Estate 18. In satisfaction of his duties, the Trustee has, inter alia, (i) retained an accountant Erik Stener Jørgensen of PriceWaterhouseCoopers (formerly Grant Thornton) and prepared an inventory of assets of the bankrupt estate, (ii) compiled a list of creditors pursuant to the Company s books and records, (iii) sent notice to each known creditor of ITF, wherever located, of the Danish Bankruptcy Proceeding and of their right to file a claim, (iv) filed periodic reports with the Danish Court, (v) secured assets of ITF, (vi) sold assets, and (vii) conducted an investigation of fraudulent activity and investigated potential claims against third parties. (Id. at 24.) 19. Based on the Trustee s investigation he has identified 113 creditors of ITF, 106 of which are located in Denmark. (Id. at 25.) Of the seven non-danish creditors, six are located in European countries other than Denmark and one in China. (Id.) There are no known creditors of ITF located within the United States. (Id.) D. Realization of U.S. Assets 20. The Trustee is currently aware of an asset of ITF located within the territorial jurisdiction of the United States a bank account in the name of the Company at Wells Fargo - 7 -
Pg 8 of 18 Bank, N.A. ( Wells Fargo ) bearing account number 2000032611504 (the U.S. Account ). (Id. at 28.) As of the statement dated February 29, 2012, the U.S. Account contained $186,432.49. (Id.) The Trustee and his counsel have engaged in discussions with Wells Fargo regarding turnover of the funds to the Trustee for distribution through the Danish Bankruptcy Proceeding. (Id.) Wells Fargo has not received any competing claims to the U.S. Account and does not dispute the Trustee s right to realize this asset and distribute it through the Danish Bankruptcy Proceeding. (Id.) Nonetheless, due to its unfamiliarity with Danish Bankruptcy law and out of an abundance of caution, Wells Fargo has requested that the Trustee obtain an order from a U.S. court authorizing and directing it to turnover the funds in the U.S. Account to the Trustee. (Id.) Because there are no known U.S. creditors of ITF and because the funds in the U.S. Account are a valuable asset of the ITF bankruptcy estate, the Trustee respectfully submits that entry of an order authorizing and directing Wells Fargo to turnover the funds in the U.S. Account to the Trustee for administration and distribution through the Danish Bankruptcy Proceeding is necessary to effectuate the purpose of chapter 15 of the Bankruptcy Code and therefore, appropriate under sections 1521(a)(5), 1521(b), and 542 as made available to the Trustee under section 1521(a)(7). The Trustee also seeks the ability to engage in the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor s assets, affairs, rights, obligations or liabilities, pursuant so section 1521(a)(4) of the Bankruptcy Code in order to investigate the existence of additional U.S. assets or creditors. RELIEF REQUESTED 21. The Trustee respectfully requests that this Court enter the Recognition Order: (i) recognizing the Danish Bankruptcy Proceeding as a foreign main proceeding, (ii) recognizing the Trustee as the foreign representative of ITF, and (iii) granting related relief under sections - 8 -
Pg 9 of 18 1521 and 542 of the Bankruptcy Code, including authorizing and directing Wells Fargo to turnover the funds in the U.S. Account to the Trustee for administration and distribution to ITF s creditors in the Danish Bankruptcy Proceeding. BASIS FOR RELIEF REQUESTED 22. Chapter 15 of the Bankruptcy Code applies where assistance is sought in a United States court by a foreign representative. 11 U.S.C. 1501(b)(1). The stated objectives of chapter 15 include: (i) cooperation between United States and foreign courts in cross-border insolvency cases, (ii) legal certainty for trade and investment, (iii) protection of all interested parties in a cross-border insolvency, and (iv) maximization of the value of the debtor s assets. 11 U.S.C. 1501(a); see In re Oversight & Control Comm n. of Avánzit, S.A., 385 B.R. 525, 534 (Bankr. S.D.N.Y. 2008). The Trustee respectfully submits that each of these goals can best be achieved by recognizing Denmark as ITF s center of main interests, recognizing the Danish Bankruptcy Proceeding as the foreign main proceeding, and recognizing the Trustee as the foreign representative. Courts in this District have previously recognized Danish bankruptcy proceedings similar to this one as a foreign main proceeding and recognized the trustees of those bankruptcy estates as the foreign representative. See, e.g., In re Atlas Shipping A/S, No. 09-10314, Recognition Order 3, Feb. 25, 2009, ECF No. 22; In re Britannia Bulkers A/S, No. 08-15187 (REG), Recognition Order 3-5, Jan. 30, 2009, ECF No. 12. Furthermore, granting additional relief under sections 1521 and 542 would further these goals and is justified under the appropriate standards. A. Recognition is Warranted Under Section 1517 23. Pursuant to section 1517(a) of the Bankruptcy Code, after notice and a hearing, an order recognizing a foreign proceeding shall be entered if: (1) such foreign proceeding for which recognition is sought is a foreign main - 9 -
Pg 10 of 18 proceeding... within the meaning of section 1502; (2) the foreign representative applying for recognition is a person or body; and (3) the petition meets the requirements of section 1515. 11 U.S.C. 1517(a). As discussed more fully below, each of the relevant factors militates in favor of a determination that Denmark is ITF s center of main interests. This Court should, therefore, conclude that the Danish Bankruptcy Proceeding is a foreign main proceeding. The Trustee and putative foreign representative is a person, and each of the procedural requirements of section 1515 have been met. Consequently, as discussed infra, each of the prerequisites to recognition are met and the Recognition Order should be entered. B. The Danish Bankruptcy Proceeding is a Foreign Main Proceeding 24. The definition of a foreign proceeding is a collective judicial or administrative proceeding in a foreign country, including an interim proceeding, under a law relating to insolvency or adjustment of debt in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganization or liquidation. 11 U.S.C. 101(23). The Danish Bankruptcy Proceeding clearly fits this definition and is the only foreign proceeding to reorganize or liquidate the assets of ITF. (See Statement of Foreign Representative Pursuant to 11 U.S.C. 1515(c) Identifying Foreign Proceedings (hereinafter Statement of Foreign Proceedings ), 3-5, filed concurrently herewith). 25. Sections 1502(4) and 1517(b)(1) of the Bankruptcy Code provide that a foreign proceeding shall be recognized as the foreign main proceeding if it is being conducted in the country where the debtor has the center of its main interests ( COMI ). The Danish Bankruptcy Proceeding should be recognized as the foreign main proceeding because the COMI of ITF is - 10 -
Pg 11 of 18 located in Denmark. C. Center of Main Interests 26. The Bankruptcy Code does not define COMI, but in the absence of evidence to the contrary, the debtor s registered office... is presumed to be the center of the debtor s main interests. 11 U.S.C. 1516(c). Here, ITF s registered address is Jægersborg Allé 164, DK- 2820 Gentofte, Denmark (Frederiksen Decl. 8.); therefore ITF s COMI is presumed to be located in Denmark. Notwithstanding this presumption, each of the relevant factors favors finding that Denmark is ITF s COMI. 27. Courts that have construed the concept of COMI have treated it synonymously with the concept of principal place of business, as that term is used relating to venue determinations. See, e.g., In re Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd. (in Provisional Liquidation), 389 B.R. 325, 336-37 (S.D.N.Y. 2008). Additionally, courts have identified several factors relevant to determining a debtor s COMI, including: (a) the location of the debtor s headquarters, (b) the location of the debtor s management, (c) the location of the debtor s primary assets, and (d) the location of the majority of the debtor s creditors who would be affected by the case. In re Millennium Global Emerging Credit Master Fund Ltd., 458 B.R. 63, 77-78 (Bankr. S.D.N.Y. 2011). Specifically: 28. Each of these criteria weigh in favor of finding that Denmark is ITF s COMI. ITF was organized and registered in Denmark (Frederiksen Decl. 8); ITF s main office was located at Jægersborg Allé 164, DK-2820 Gentofte, Denmark (id. at 26); ITF was primarily controlled by management located at its principal place of business in Denmark (id.); The majority of ITF s employees resided in Denmark (id.); - 11 -
Pg 12 of 18 The majority of ITF s assets are located in Denmark (id.); 106 of the 113 known creditors of ITF approximately 94% are located in Denmark, which creditor concentration is more than in any other country (id. at 25); and ITF maintained its primary bank accounts in Denmark (id.). 29. Accordingly, based on statutory presumption that ITF s COMI is located in Denmark and the totality of the evidence bearing on factors considered by courts in making COMI determinations, this Court should hold that ITF s COMI is in Denmark. D. The Trustee is a Person and the Foreign Representative of ITF 30. Mr. Frederiksen is a natural person and a citizen of Denmark and is, therefore, a person as defined in the Bankruptcy Code. 11 U.S.C. 101(41); (Frederiksen Decl. 1.) 31. The Bankruptcy Code defines the term foreign representative as a person... authorized in a foreign proceeding to administer the reorganization or the liquidation of the debtor s assets or affairs or to act as a representative of such foreign proceeding. 11 U.S.C. 101(24). Mr. Frederiksen was appointed Trustee of the Danish Bankruptcy Proceeding. Under Danish law, the Trustee is responsible for administering and monetizing ITF s assets and to act as its representative by, inter alia, winding down ITF s business, administering claims against ITF, and representing ITF in all legal actions, including transactions in connection with the Danish Bankruptcy Proceeding. Accordingly, the Trustee is a foreign representative and is authorized by the Bankruptcy Order to act in such capacity. E. The Procedural Requirements of Section 1515 Are Met 32. The final prerequisite to recognition under section 1517 is that the petition satisfies the procedural requirements of section 1515. This case has been commenced by a foreign representative by filing this Petition. 11 U.S.C. 1515(a). This Petition is accompanied - 12 -
Pg 13 of 18 by a copy of the Bankruptcy Order, which is a certified copy of the decision commencing [the] foreign proceeding and appointing the foreign representative, as well as an English translation thereof. 11 U.S.C. 1515(b)(1). In addition, this Petition is accompanied by a certificate from the foreign court affirming the existence of [the Danish Bankruptcy Proceeding] and the appointment of the [Trustee]. 11 U.S.C. 1515(b)(2); (see Certification of the Danish Bankruptcy Court, hereinafter the Danish Court Certification attached hereto as Exhibit C). This Petition is also accompanied by the Statement of Foreign Proceedings filed concurrently herewith, which constitutes a statement identifying all foreign proceedings with respect to the debtor that are known to the foreign representative. 11 U.S.C. 1515(c). 33. Each of the prerequisites to recognition under section 1517 have been met. Accordingly, the Trustee respectfully requests that this Court grant recognition of the Danish Bankruptcy Proceeding as the foreign main proceeding and recognition of the Trustee as ITF s foreign representative. F. The Trustee is Entitled to Relief Under Section 1520 34. Upon recognition of a foreign proceeding, section 1520 of the Bankruptcy Code prescribes certain forms or relief available to the foreign representative, and respecting property of the debtor within the territorial jurisdiction of the United States. Such relief is granted automatically as a consequence of recognition, and section 1520 requires no further showing by the foreign representative to obtain such relief. G. Additional Relief Under Section 1521 is Necessary and Appropriate 35. [W]here necessary to effectuate the purpose of [chapter 15] and to protect the assets of the debtor or the interests of creditors, the court may, at the request of the foreign representative, grant any appropriate relief. 11 U.S.C. 1521(a) (emphasis added). Such relief - 13 -
Pg 14 of 18 may include, entrusting the administration or realization of all or part of the debtor s assets within the territorial jurisdiction of the United States to the foreign representative and, except for certain avoidance provisions, any additional relief that may be available to a trustee.... 11 U.S.C. 1521(a)(5 and 7). 36. The ultimate goal of the Trustee is to preserve and maximize realization on the assets of ITF for the benefit of its creditors. The purpose of this chapter 15 proceeding is to effectuate that goal. The Trustee is currently aware of an asset of ITF within the territorial jurisdiction of the United States the U.S. Account. (Frederiksen Decl. 28.) The Trustee has contacted the institution holding the U.S. Account, Wells Fargo, about taking possession of the funds therein for distribution through the Danish Bankruptcy Proceeding. Wells Fargo has advised the Trustee, however, that due to its unfamiliarity with Danish bankruptcy law and out of an abundance of caution, it would require an order from a U.S. court authorizing and directing it to remit the funds to the Trustee. The funds in the U.S. Account are valuable assets of the ITF and the Trustee believes that such relief is appropriate under the circumstances. 37. The Trustee continues to investigate whether there are other U.S. assets or creditors of ITF. For instance, because the fraudulent licensing scheme involved at least three U.S. companies, there may be claims against those companies. Furthermore, the Trustee has limited knowledge of the activities conducted by ITF, Inc., which was a wholly owned U.S. subsidiary of ITF, and whether there is any remaining value to its holdings in the subsidiary or whether there are any claims against it. 38. The relief that may be granted under section 1521 of the Bankruptcy Code includes (i) entrusting the administration or realization of all or part of the debtor s assets within the territorial jurisdiction of the United States to the foreign representative. 11 U.S.C. - 14 -
Pg 15 of 18 1521(a)(5). Accordingly, the Trustee respectfully submits that authorizing and directing the turnover of assets, including Wells Fargo s remission of the funds in the U.S. Account to the Trustee for distribution through the Danish Bankruptcy Proceeding is appropriate under the circumstances pursuant to section 1521(a)(5). 39. Additionally, upon recognition, the court may, at the request of the foreign representative, entrust the distribution of all or part of the debtor s assets located in the United States to the foreign representative, provided that the court is satisfied that the interests of creditors in the United States are sufficiently protected. 11 U.S.C. 1521(b). Here, there are no creditors of ITF in the U.S. Consequently, the Trustee respectfully submits that pursuant to section 1521(b) and at his request, the Court should authorize and direct the turnover of assets, including Wells Fargo s remission of the funds in the U.S. Account to the Trustee for distribution through the Danish Bankruptcy Proceeding. 40. Finally, section 1521(a)(7) permits the Court, upon recognition, to grant any additional relief that may be available to a trustee, except [under certain sections that do not apply]. 11 U.S.C. 1521(a)(7). Section 542 of the Bankruptcy Code requires that an entity, other than a custodian in possession, custody, or control, during the case, of property that the trustee may use, sell, or lease under section 363 of this title... shall deliver to the trustee, and account for, such property or the value of such property. 11 U.S.C. 542. Wells Fargo is not a custodian as defined in section 101(11) of the Bankruptcy Code and cash in an account is property that a trustee in a case under title 11 could use or sell under section 363. 11 U.S.C. 101(11), 363. Consequently, the Trustee respectfully submits that, pursuant to sections 1521(a)(7) and 542, the Court may and should require Wells Fargo to deliver to the Trustee and account for the funds in the U.S. Account. - 15 -
Pg 16 of 18 41. In furtherance of the goal of realizing the funds in the U.S. Account for distribution through the Danish Bankruptcy Proceeding, language authorizing and directing Wells Fargo to remit those funds to the Trustee has been included in the draft Recognition Order submitted with this Petition, which has been reviewed and consented to by Wells Fargo. Because such relief is consistent with the goals of chapter 15 and because such relief is appropriate under sections 1521(a)(5), 1521(b), and 542 as incorporated through 1521(a)(7), the Trustee respectfully requests that the Court enter the Recognition Order. 42. Finally, in order to investigate, identify, and fully realize the value of any other assets within or being monetized in the territorial jurisdiction of the U.S., the Trustee requires the ability to engage in the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor s assets, affairs, rights, obligations or liabilities, and respectfully requests that such relief be granted. 11 U.S.C. 1521(a)(4). The Trustee believes the relief is appropriate so that he can properly investigate and identify any other assets of ITF within the territorial jurisdiction of the U.S., including claims against third parties located in the U.S. in connection with the fraudulent licensing scheme or the activities of ITF, Inc. In addition, the relief is appropriate because the Trustee is already vested with the power to take such discovery in the Danish Bankruptcy Proceeding. (Frederiksen Decl. 6.) NOTICE 43. Notice of this Petition has been provided to: (a) the Office of the United States Trustee for the Southern District of New York; (b) ITF; (c) Wells Fargo Bank, N.A.; (d) ITF s known direct or indirect shareholders, subsidiaries, and affiliates (by providing them with a copy of the notice of the recognition hearing by mail); (e) foreign creditors in the Danish Bankruptcy Proceeding (by providing them with a copy of the notice of the recognition hearing by mail); and - 16 -
Pg 17 of 18 (f) any other party that has requested notice pursuant to Federal Rule of Bankruptcy Procedure 2002. The Trustee submits that such notice is proper and that no other or further notice need be provided. NO PRIOR REQUEST 44. No prior motion or application for the relief requested herein has been made to this or any other Court. CONCLUSION WHEREFORE, the Trustee respectfully requests that this Court enter the Recognition Order: (i) granting recognition of the Danish Bankruptcy Proceeding as a foreign main proceeding and of the Trustee as the foreign representative of ITF, (ii) granting additional relief under sections 1521(a)(4), 1521(b) and 542 as made applicable through section 1521(a)(7) of the Bankruptcy Code, and (iii) granting such other and further relief as may be just and proper. Dated: March 29, 2013 New York, New York Respectfully submitted, DENTONS US LLP /s/ D. Farrington Yates D. Farrington Yates Oscar N. Pinkas 1221 Avenue of the Americas New York, New York 10020 Tel: (212) 768-6700 Fax: (212) 768-6800 Counsel for Boris K. Frederiksen, in his capacity as Trustee of IT Factory A/S - 17 -
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