AJ Ruiz Consultoria Empresarial v. Banco Bilbao Vizcaya Argentaria, S.A.

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AJ RUIZ CONSULTORIA EMPRESARIAL S.A., solely as Judicial Administrator and foreign representative of SCHAHIN HOLDING S/A, et al., Plaintiff, v. BANCO BILBAO VIZCAYA ARGENTARIA, S.A., et al., Defendants.

AJ RUIZ CONSULTORIA EMPRESARIAL S.A., solely as Judicial Administrator and foreign representative of SCHAHIN HOLDING S/A, et al., Plaintiff, v. BANK OF CHINA LIMITED, et al., Defendants.

Adv case Nos. 21-01213 LGB, 21-01216 (LGB)

United States Bankruptcy Court, S.D. New York

February 6, 2024

JONES DAY LLP Attorneys for IFC

KELLOGG, HANSEN, TODD, FIGEL & FREDERICK, P.L.L.C. Attorneys for the Plaintiff

DORSEY & WHITNEY, LLP Attorneys for Bank of China Limited; China Development Bank

LAW OFFICE OF STEVEN J. FINK PLLC Attorneys for Portigon AG, New York Branch

SIDLEY AUSTIN LLP Attorneys for IFC

SULLIVAN & CROMWELL LLP Attorneys for Nomura Corporate Funding Americas, LLC

MILBANK LLP Attorneys for the Banco Bilbao Vizcaya Argentaria, S.A.; Banco Bilbao Vizcaya Argentaria, S.A., Grand Cayman Branch; Caterpillar Financial Services Corporation; Credit Industriel et Commercial; Deutsche Bank AG, London Branch; Deutsche Bank Trust Company Americas; Dexia Credit Local SA; Dexia Credit Local SA, New York Branch; Hamburg Commercial Bank AG; Intesa Sanpaolo, S.p.A., New York Branch; Itau BBA International PLC; KfW; Mizuho Bank, Ltd.; Shinhan Bank; Standard Chartered Bank; UniCredit Bank AG

MAYER BROWN LLP Attorneys for Mitsubishi Corporation; MS Drillship I S.A.

MASUDA, FUNAI, EIFERT & MITCHELL, LTD. Attorneys for Mitsubishi UFJ Lease & Finance (U.S.A.) Inc

OPINION & ORDER

HON. LISA G. BECKERMAN UNITED STATES BANKRUPTCY JUDGE

Pending before the Court are two Motions to Dismiss regarding the Amended Complaints in these adversary proceedings. The Amended Complaints allege claims of unjust enrichment and aiding and abetting breach of fiduciary duty. The Defendants seek dismissal under several Rule 12(b) motions, including dismissal on the grounds of sovereign immunity, improper venue, expiration of the statute of limitations, lack of standing, lack of personal jurisdiction, and failure to state a claim. For the reasons set forth herein, the Court grants both Motions to Dismiss in their entirety.

I. BACKGROUND

A. The Parties

AJ Ruiz Consultoria Empresarial S.A. ("AJ Ruiz") appears solely as Judicial Administrator and foreign representative of Schahin Holding S/A; Agropecuária Alto Do Turiassú Ltda; Agropecuária Maranhense S/A; mbar Empreendimentos E Participações S/C Ltda; Aquática Comunicações Ltda; Base Engenharia E Serviços De Petróleo E Gás S/A; Base Petróleo E Gas S/A; Companhia Ms De Participações; Companhia Schahin De Ativos; Companhia Schahin Securitizadora De Créditos Financeiros S/S Ltda; Construtora Mogno Ltda; Deep Black Drilling LLP; Foxborough Participações Ltda; Habitécnica Participações S/A; Habitécnica S/A Empreendimentos Imobiliários, Administração E Planejamento; HBF Participações Ltda; HHS Participações S/A; Intelis Automação E Controle Ltda; MTS Participações Ltda; S&S Holding Elétrica S/A; S2 Participações Ltda; Satasch Participações Ltda; SCH 14 Sondas De Produções Maritimas S/A; SCH07 Participações Ltda; SCH08 Participações Ltda; SCH13 Participações Ltda; SCH15 Participações Ltda; Schahin Admnistração E Informática Ltda; Schahin Ativos Companhia Schahin Securitizadora De Créditos Financeiros S/A; Schahin Capital SPE 1 S/A; Schahin Capital SPE 2 S/A; Schahin Desenolvimento Imobiliário S/A; Schahin Empreendimentos Imobiliários Ltda; Schahin Energia S/A; Schahin Participações Ltda; Schahin Securitizadora De Créditos Financeiros S/A; and SM Participações S/A. (the "Debtors" or the "Schahin Group"). AJ Ruiz has its principal place of business in Brazil. Am. Compl. ¶ 12.^[1]

Defendant Banco Bilbao Vizcaya Argentaria, S.A. ("Banco Bilbao") is a global financial services group with a principal place of business in Spain that is also registered to do business in California. Am. Compl. ¶ 13. Defendant Bank of China Limited ("Bank of China") is a company organized and existing in the People's Republic of China, with its principal place of business in China, that also maintains branches in California, Illinois, and New York. AP 2 [Am. Compl. ¶ 15].

Banco Bilbao and Bank of China, along with twenty-two other international financial institutions worldwide, were involved in transactions with the Schahin Group.

Defendant International Finance Corporation ("IFC") and Defendant Kreditanstalt für Wiederaufbau ("KfW") (collectively, the "Alleged Immune Defendants") are defendants only in AP 2. Defendant IFC is an international organization established by member countries, including the United States, with its principal place of business in Washington, D.C. AP 2 [Am. Compl. ¶ 19]. Defendant KfW is an entity organized and existing under the laws of the Federal Republic of Germany with its principal place of business in Frankfurt, Germany. Id. at ¶ 20. Majority of KfW shares are owned by the Federal Republic of Germany and minority of KfW shares are owned by the German Federal States. AP 2 [Consolidated Mot. at 36 n.13].

B. The Foreign Bankruptcy and Chapter 15 Proceedings

In April 2015, principals of the Schahin Group filed for reorganization of twenty-eight entities in Brazil. Am. Compl. ¶ 94; see In re Schahin Holding S.A., No. 1:19-19932 (Bankr. S.D. Fla. 2015) ("Schahin Florida Case") [ECF No. 2, Ex. 1]. In May 2015, the Brazilian bankruptcy court (the "Brazilian Court") ordered that only nine of the twenty-eight entities be included in the reorganization: Schahin Engenharia S/A; Schahin Holding S/A; Schahin Empreendimentos Imobiliarios Ltda; Schahin Desenvolvimento Imobiliarios S/A; Companhia Schahin De Ativos; MTS Participações S/A; SM Participações S/A; Satasch Participações Ltda; and Deep Black Drilling LLP (the "Original Debtors"). Am. Compl. ¶ 94; Schahin Florida Case [ECF No. 2, Ex. 1].

On March 1, 2018, the Brazilian Court converted the reorganization into a bankruptcy proceeding due to the Original Debtors' failure to make payments under the reorganization plan.

Am. Compl. ¶ 98. The Brazilian Court appointed KPMG Corporate Finance Ltda. ("KPMG") as the Judicial Administrator and foreign representative of the bankruptcy estate. Id. at ¶ 100.

On July 26, 2019, KPMG filed a petition (the "Petition Date") under Chapter 15 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of Florida in front of the Honorable Judge Robert A. Mark (the "Florida Court"). Am. Compl. ¶ 101. On August 21, 2019, the Florida Court granted recognition to the Original Debtors' Brazilian bankruptcy proceeding as a foreign main proceeding under section 1517, qualified KPMG as a foreign representative under section 101(24), and authorized KPMG to exercise powers of a trustee under sections 363 and 552 of the Bankruptcy Code. Id. at ¶ 102.

From March 2018 to October 2018, the Brazilian Court entered several orders that added twenty-eight Debtors into the Brazilian bankruptcy case (the "Additional Debtors").^[2] See Schahin Florida Case [ECF No. 14, Ex. A]. On September 18, 2019, KPMG filed an Amended Petition for the Additional Debtors to be recognized in the Florida Court. Schahin Florida Case [ECF No. 14, ¶ 4]. The Florida Court recognized the Additional Debtors on October 21, 2019. Am. Compl. ¶ 103. Presently, there are thirty-seven Debtors in the Brazilian bankruptcy case and the Brazilian bankruptcy case for those Debtors was recognized in the Schahin Florida Case.

On September 15, 2020, the Brazilian Court appointed AJ Ruiz to replace KPMG as the sole Judicial Administrator and foreign representative of the Debtors. Schahin Florida Case [ECF No. 59, Ex. A]. The Brazilian Court also authorized AJ Ruiz to bring suit in the United States with respect to the sale lease-back transaction. Am. Compl. ¶ 105. On September 20, 2020, the Florida Court entered an Order Substituting AJ Ruiz as the Foreign Representative. Schahin Florida Case [ECF No. 59].

C. The Adversary Proceedings

On July 13, 2021, seven years after the sale-leaseback transaction, AJ Ruiz (the "Plaintiff") filed two complaints (the "Initial Complaints") in the United States District Court for the Southern District of New York (the "District Court") against the Defendants in front of the Honorable Judge P. Kevin Castel. AJ Ruiz Consultoria Empresarial S.A. v. Banco Bilbao Vizcaya Argentaria, S.A,. et al., No. 1:21-cv-06018 ("SDNY 1") [ECF No. 1]; AJ Ruiz Consultoria Empresarial S.A. v. Bank of China Limited, et al., No. 1:21-cv-06020 ("SDNY 2") [ECF No. 1].

The S.D.N.Y. 1 suit was filed against Defendants Banco Bilbao Vizcaya Argentaria, S.A.; Banco Bilbao Vizcaya Argentaria S.A., Grand Cayman Branch; Caterpillar Financial Services Corporation; Crédit Industriel et Commercial; Deutsche Bank AG, London Branch; Deutsche Bank Trust Company Americas; Hamburg Commercial Bank AG; Intesa Sanpaolo, S.P.A., New York Branch; Itau BBA International PLC; Mitsubishi Corporation; Mitsubishi UFJ Lease & Finance (U.S.A.) Inc.; Mizuho Bank, Ltd.; MS Drillship I S.A.; Nomura Corporate Funding Americas, LLC; Shinhan Bank; Standard Chartered Bank; and Unicredit Bank AG (the "SDNY 1 Defendants"). The S.D.N.Y. 2 suit was filed against Defendants Bank of China Limited; China Development Bank; Dexis Crédit Local SA; Dexia Crédit Local SA, New York Branch; IFC; KfW; and Portigon AG, New York Branch (the "SDNY 2 Defendants") (collectively, with the S.D.N.Y. 1 Defendants, the "Defendants"). The Initial Complaints assert an unjust enrichment claim against the Defendants for participating in the sale of the Oil Rigs and receiving repayment of the loans they financed. SDNY 1 [ECF No. 1, ¶ 1]; SDNY 2 [ECF...