Katsumi Iida

The principal for a debtor in a Japanese bankruptcy case filed a state court action in Hawaii seeking to enjoin the Japanese trustee from exercising further control over assets of the debtor in Hawaii and declaratory judgment that the trustee should not have proceeded without US court authority. The firm filed a chapter 15 case in Hawaii bankruptcy court relating to the Japanese main cases, removed the state court action to the chapter 15 proceeding in the bankruptcy court, and moved for summary judgment on the principal’s claims against the Japanese trustee. The court granted summary judgment. On appeal, the Bankruptcy Appellate Panel of the Ninth Circuit affirmed in a substantial reported decision, holding that neither the Bankruptcy Code nor Hawaiian state law required the trustee to seek a U.S. court order before exercising ownership rights over the Hawaiian corporations when the trustee was acting pursuant to valid Japanese court orders.