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In re Ace Track Co., Ltd., Debtor in a Foreign Proceeding

Upon the motion the request of the counsel to the foreign representative in a foreign main proceeding recognized pursuant under chapter 15 of the Bankruptcy Code, held: a foreign representative has a duty to his or her counsel in the United States and to the United States Bankruptcy Court to remain in contact during the duration of a chapter 15 case and to arrange for the proper closure of the case when it is no longer needed.  Here, the foreign representative in the Korean foreign main proceeding recognized by this court neglected all contact with his counsel and the court over an extended period of more than five years.  As a result of the foreign representative’s counsel understandably seeking to withdraw, the court issued a show cause order requiring all interested parties, including but not limited to the foreign representative, to appear and show cause why the case should not be dismissed.  Further, the court attempted under section 1525(b) of the Bankruptcy Code to contact the foreign representative and/or the judges in the main proceeding in Korea.  With the assistance of a Korean judge unaffiliated with the case, the court determined that the foreign main proceeding had been concluded.  Only the foreign representative’s counsel appeared at the show cause hearing, having had no further communication from their client.  As a result, the chapter 15 case was closed and counsel was relieved from their representation.  Further, the foreign representative has been disqualified from appearing before the court in future matters.  He may only act as a foreign representative in further matters before the court upon an application demonstrating his understanding of and commitment to fulfilling his obligations to the court as a petitioner in such matters and upon an order of the court finding such conditions to be met.

Friday, January 27, 2023