Section 108 Relief Automatically Available to Foreign Representative...

By: Andrew J. Zapata

St. John’s Law Student

American Bankruptcy Institute Law Review Staff

In a matter of first impression, the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) in In re Fairfield Sentry Ltd.[1] held that the tolling provisions of section 108 of the Bankruptcy Code (the “Code”) become automatically available to “Foreign Representatives”[2] under section 103(a) in chapter 15 cases.[3]  Fairfield Sentry Ltd. was a feeder fund that invested its assets with Bernard Madoff, and was placed into liquidation proceedings in the British Virgin Islands after Mr. Madoff’s fraudulent activities were uncovered.[4] The Bankruptcy Court recognized the British Virgin Islands proceedings as a foreign main proceeding on July 22, 2010, and held that the joint liquidators were the foreign representatives of the debtor.[5] The foreign representatives sought to have the section 108 tolling provision applied from July 22, 2010 in order to have at least an additional two years to investigate and commence actions.

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