U.S. Court Recognizes Croatian Proceeding Settlement Despite English Law Gibbs Rule

On October 24, Judge Glenn of the United States Bankruptcy Court in the Southern District of New York granted recognition and enforcement of Chapter 15 debtor Agrokor’s settlement agreement approved under its Croatian administration proceedings.

A majority of Agrokor’s debt to be compromised under the settlement agreement is subject to English law, and the Court discussed the English Gibbs Rule in deciding whether it should extend comity to the settlement agreement. The Gibbs Rule is a rule of English law that provides that an English law-governed debt cannot be discharged or compromised in a foreign insolvency proceeding. In his memorandum opinion, Judge Glenn addressed how comity applies to the settlement agreement within the United States under Agrokor’s Chapter 15 proceedings despite the Gibbs Rule.