Servicos de Petroleo Constellation S.A. and Andrew Childe

1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re:
Serviços de Petróleo Constellation S.A., et al.,1
Foreign Debtors.
FOR PUBLICATION
Case No. 18-13952 (MG)
Chapter 15
MEMORANDUM OPINION RECOGNIZING FOREIGN DEBTORS’ FOREIGN MAIN
AND FOREIGN NONMAIN PROCEEDING
A P P E A R A N C E S:
WHITE & CASE LLP
Attorneys for Andrew Childe, as Petitioner and Foreign Representative
1221 Avenue of the Americas
New York, NY 10020
By: 	John K. Cunningham, Esq.
Thomas E. MacWright, Esq.
Gregory Starner, Esq.
WHITE & CASE LLP
Attorneys for Andrew Childe, as Petitioner and Foreign Representative
Southeast Financial Center
200 South Biscayne Blvd.
Suite 4900
Miami, FL 33131
By: 	Richard S. Kebrdle, Esq. (admitted pro hac vice)
Laura L. Femino, Esq. (admitted pro hac vice)
MILBANK, TWEED, HADLEY & MCCLOY LLP
Attorneys for the 2024 Bond Noteholders
28 Liberty Street
New York, NY 10005
By: 	Mary Doheny, Esq.
1 	The debtors in these chapter 15 cases (the “Chapter 15 Cases”) are: Serviços de Petróleo Constellation S.A.
(“Petróleo Constellation”); Lone Star Offshore Ltd. (In Provisional Liquidation) (“Lone Star”); Gold Star Equities Ltd.
(In Provisional Liquidation) (“Gold Star”); Olinda Star Ltd. (In Provisional Liquidation) (“Olinda Star”); Star
International Drilling Limited (“Star Int’l.”); Alpha Star Equities Ltd. (In Provisional Liquidation) (“Alpha Star”);
Snover International Inc. (In Provisional Liquidation) (“Snover”); Arazi S.à r.l. (“Arazi”); Constellation Oil Services
Holding S.A. (“Parent/Constellation”); and Constellation Overseas Ltd. (In Provisional Liquidation) (“Constellation
Overseas”) (together, the “Chapter 15 Debtors”). (“Verified Petition,” ECF Doc. # 7 at 1 n.1.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 1 of 91

2
PRYOR CASHMAN LLP
Attorneys for Wilmington Trust, National Association as Indenture Trustee for the 9.00%/0.50%
PIK Senior Secured Notes Due 2024
7 Times Square
New York, NY 10036
By: 	Andrew S. Richmond, Esq.
Seth H. Lieberman, Esq.
HOLLAND & KNIGHT
Attorneys for the Trustee to Deutsche Bank Trust Company Americas as Trustee for the 6.250%
Senior Notes Due 2019
31 West 52 nd Street
New York, NY 10019
By: 	Barbara R. Parlin, Esq.
SULLIVAN & CROMWELL LLP
Attorneys for Alperton Capital Ltd.
125 Broad Street
New York, NY 10004
By: 	Andrew G. Dietderich, Esq.
Joseph E. Neuhaus, Esq.
Brian D. Glueckstein, Esq.
CLEARLY GOTTLIEB STEEN & HAMILTON LLP
Attorneys for Certain Consenting A/L/B Lenders
One Liberty Plaza
New York, NY 10006
By: 	Luke A. Barefoot, Esq.
MARTIN GLENN
UNITED STATES BANKRUPTCY JUDGE
I. 	INTRODUCTION
On December 7, 2018, Andrew Childe (the “Foreign Representative” or “Petitioner”)
commenced the jointly administered Chapter 15 Cases and sought this Court’s recognition of the
joint judicial reorganization (recuperação judicial or “RJ”) of each of the Chapter 15 Debtors in
the jointly administered judicial organization proceeding (the “Brazilian RJ Proceeding”)
pending in the 1 st Business Court of Rio de Janeiro (the “Brazilian RJ Court”) pursuant to
Federal Law No. 11.101 of February 9, 2005 (the “Brazilian Bankruptcy Law”) of the laws of
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 2 of 91

3
the Federative Republic of Brazil (“Brazil”).2 (Verified Petition at 7.) The Foreign
Representative seeks recognition of the Brazilian RJ Proceeding for each of the Chapter 15
Debtors as either a foreign main proceeding or, in the alternative, as a foreign nonmain
proceeding, pursuant to chapter 15 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532
(the “Bankruptcy Code”). The Court must therefore determine the center of main interests (the
“COMI”) for each Chapter 15 Debtor in the enterprise group to determine whether—and to what
extent—it should grant recognition of the Brazilian RJ Proceeding with respect to each.
When deciding whether to grant recognition of a foreign proceeding, whether as a foreign
main or foreign nonmain proceeding, the Court begins with the statutorily prescribed
presumption that the COMI of each foreign debtor entity is the place where that entity has its
registered office. Of these Chapter 15 Debtors, two have registered offices in Luxembourg, one
has a registered office in the Cayman Islands, one has a registered office in Brazil, and six have
registered offices in the British Virgin Islands. Because the Foreign Representative seeks
recognition of the Brazilian RJ Proceeding as main (or nonmain in the alternative), the Foreign
Representative bears the burden of providing sufficient evidence to rebut the registered office
presumption for each of the Chapter 15 Debtors that is incorporated outside of Brazil.3
2 	Childe seeks recognition as the “foreign representative,” as defined in 11 U.S.C. §§ 101(24), 1509, and
1517. There is no dispute that Childe was properly designated as the foreign representative of each Chapter 15
Debtor.
3 	Although nine of the ten Chapter 15 Debtors are incorporated outside of Brazil, this opinion will only
determine recognition with respect to seven of them. Since the recognition hearing, a Brazilian appellate court
determined that two of the Chapter 15 Debtors should be dismissed from the Brazilian RJ Proceeding. Until the
Brazilian court determines whether these entities will proceed in the Brazilian RJ Proceeding, this Court will not
make a decision on recognition of the proceeding with respect to these entities.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 3 of 91

4
As a broad overview, the Chapter 15 Debtors are members of an integrated enterprise
group known as the Constellation Group.4 While the Constellation Group is discussed as a group
entity at times throughout this opinion’s opening sections for context, it is important to bear in
mind that the Court’s recognition is granted on an individual debtor by debtor basis. The
Constellation Group’s tripartite business enterprise consists of (i) offshore drilling, (ii) onshore
drilling, and (iii) investments in several joint ventures and associated entities related to the
operation of floating production storage and offloading units (“FPSOs”). The Chapter 15
Debtors are a subset of the Constellation Group. The ten Chapter 15 Debtors along with their
direct and indirect affiliates comprise the Constellation Group (“Constellation Group”), and the
Chapter 15 Debtors along with their affiliates that are debtors in the RJ Proceeding are referred
to as the RJ Debtors (“RJ Debtors”).
The Constellation Group’s current financial distress is attributable, in large part, to the
cyclical nature of the deepwater drilling market, which entered a sustained down cycle and
created a number of major bankruptcies in the sector.5 By the time of filing, seven of the
Constellation Group’s eight offshore drilling rigs were either no longer contracted or soon to
come off contracts. As of November 30, 2018, the Constellation Group was liable for
4 	The United Nations Commission on International Trade Law’s Working Group V (Insolvency Law) has
met multiple times and issued several updates regarding the drafting of an addition to the Model Law that would
apply to and address issues specifically related to enterprise groups. Recent drafts suggest that the enterprise group
law will maintain the concept of COMI for each individual enterprise within a group enterprise. Working Group V
has defined “enterprise group” as “two or more enterprises that are interconnected by control or significant
ownership.” See A/CN.9/WG.V/WP.158 Facilitating the cross-border insolvency of enterprise groups: draft
legislative provisions, UNCITRAL: Working Group V (Feb. 26, 2018),
http://www.uncitral.org/uncitral/en/commission/working_groups/5Insolvency.html.
5 	Major recent bankruptcies in the industry include Ocean Rig (see In re Ocean Rig UDW Inc., Case No. 17-
10736 (Bankr. S.D.N.Y. 2017)), Seadrill (see In re Seadrill Ltd., Case No. 17-60079 (Bankr. S.D. Tex. 2017)), and
Pacific Drilling (see In re Pacific Drilling S.A., Case No. 17-13193 (Bankr. S.D.N.Y. 2017)).
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 4 of 91

5
approximately US$1.5 billion in aggregate outstanding third-party financial indebtedness
(including accrued interest) under four credit facilities and two bond issuances.
On January 29, 2019, Alperton Capital Ltd. (“Alperton”), a contingent creditor of one of
the ten Chapter 15 Debtors (Constellation Overseas), filed its Limited Objection of Alperton to
the Petition for Recognition of the Brazilian RJ Proceeding. (“Alperton Objection,” ECF Doc. #
35.) Alperton’s limited objection contends that the Chapter 15 Debtors “have not satisfied their
burden of proof that the location of the Debtors’ [COMI] is in Brazil and Alperton objects to
recognition of the RJ Proceeding as a foreign main proceeding.” (See id. ¶ 8.) In support of the
Alperton Objection, Alperton submits and incorporates by reference the Declaration of Andrew
G. Dietderich, which was filed concurrently therewith. (“Dietderich Decl.,” ECF Doc. # 36.) On
February 4, 2019, counsel for Alperton filed the Second Declaration of Andrew G. Dietderich.
(“Second Dietderich Decl.,” ECF Doc. # 44.) Additionally, the Chapter 15 Debtors and Alperton
agreed to a Joint Stipulation of Undisputed Facts, dated February 5, 2019, in lieu of cross-
examination of the Debtors’ declarants. (“Stipulation,” ECF Doc. # 46.)
On February 5, 2019, the Court held the hearing on the Chapter 15 Debtors’ Petition (the
“Recognition Hearing”). (See “Hr’g Tr.,” ECF Doc. # 59.) At the Recognition Hearing, the
Court received evidence and heard oral argument regarding the Verified Petition.6 The Court
reserved judgment on recognition of the Verified Petition and directed the parties to submit
proposed findings of fact and conclusions of law regarding recognition of the Brazilian RJ
Proceeding.7 (See id. at 74:2-7, 156:11-25.)
6 	The Court accepted into evidence Petitioner’s exhibits 1 through 19 (“Pet’r Ex.”) and the Second
Dietderich Decl. (Hr’g Tr. 38:11-17.) The Verified Petition is in evidence as Pet’r Ex. 14.
7 	The Foreign Representative’s corrected proposed findings of fact (“FRFOF”) are located at ECF Doc. # 57
and Alperton’s proposed findings of fact (“Alperton FOF”) are located at ECF Doc. # 54.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 5 of 91

6
Alperton does not object to recognition of the Brazilian RJ Proceeding as a foreign
nonmain proceeding. (Id. at 15:7-11 (“[W]e have no objection to the recognition of the Brazilian
RJ as a foreign non-main.”).) Rather, Alperton argues that the COMI for the entire Constellation
Group is not in Brazil. (Id. at 15:24–25 (“[W]e believe COMI is not in Brazil for the group.”).)
It argues that the “COMI for all ten foreign debtors in the international group is Luxembourg.”
(Id. at 96:3-4.) Additionally, Alperton asks that “the Court allow the Brazilian court in the RJ
Proceedings the opportunity to decide the question of COMI, and recognize the RJ Proceeding in
these Chapter 15 Cases for the time being as either a foreign non-main proceeding or a foreign
main proceeding . . . .” (Alperton Objection ¶ 9.)8
The Brazilian Court of Appeals recently announced a decision to dismiss the RJ
Proceeding with respect to two of the Chapter 15 Debtors—Arazi and Olinda Star—and an
additional RJ Debtor—Lancaster Projects Corp. The Foreign Representative informed the Court
that it intends to seek a clarification of this judgment, implying that the Brazilian Court of
Appeals’ dismissal is not final. However, until the Brazilian Courts determine whether the
Chapter 15 Debtors Arazi and Olinda Star are proper parties in the Brazilian RJ Proceeding, this
Court will not decide whether the proceedings are main or nonmain with respect to them. If any
other Chapter 15 Debtors are subsequently dismissed from the Brazilian RJ Proceedings, the
Court may modify its present decision regarding recognition respecting those entities pursuant to
section 1519(d).
8 	Alperton also argued at the Recognition Hearing and in its later proposed findings of fact that “[i]n
practice, U.S. courts may accord less deference to foreign representatives of foreign nonmain proceedings than they
typically accord to representatives of main proceedings under section 1521. Alperton points to no specific provision
that requires this Court . . . to provide the Brazilian Proceeding, once recognized as a foreign main proceeding for
each Chapter 15 Debtor, with more deference than the Court would provide the Brazilian Proceeding if only
recognized as a foreign nonmain proceeding.” (Alperton FOF ¶ 137.) Nonetheless, Alperton goes on to note that it
worries that a recognition as a foreign main proceeding “for each of the Chapter 15 Debtors” might prejudice their
future rights. This concern seems to be the root of Alperton’s objection.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 6 of 91

7
At the Recognition Hearing the Court also questioned Alperton’s standing to object to
recognition of any of the Chapter 15 Debtors other than Constellation Overseas, an entity with
which it is a contingent creditor based on a pending arbitration claim. (Hr’g Tr. 22:16-19, 23:8-
10.) Alperton requested the opportunity to brief the issue, but ultimately conceded that based
upon the facts in the record, it did not have standing with respect to any Chapter 15 Debtor other
than Constellation Overseas. The Court nonetheless analyzes the evidence and objections to
recognition raised by Alperton. This requires the Court to analyze whether a proceeding should
be recognized as main, nonmain, or not recognized at all, regardless of whether objections have
been raised. See In re Ocean Rig UDW Inc., 570 B.R. at 692 (considering an objecting party’s
arguments to deny recognition on the merits, even though the Court found the objecting party
had failed to establish standing because the Court had an independent obligation to establish that
recognition was proper).
The ultimate issue presently before the Court is how to apply the Chapter 15 COMI
standards to each Chapter 15 Debtor in a highly interrelated enterprise group whose management
and operations are increasingly becoming detached from any specific locale as the business aims
towards increased globalization.9 For the reasons further discussed below, the Court now grants
recognition as a foreign nonmain proceeding for Parent/Constellation, and grants recognition as a
foreign main proceeding for Petróleo Constellation, Constellation Overseas, Alpha Star, Gold
Star, Lone Star, Star Int’l, and Snover.
9 	This Court recently recognized a foreign proceeding for a group of debtors in another large, global
enterprise group in Agrokor. See In re Agrokor d.d., 591 B.R. 163, 165 (Bankr. 2018). In Agrokor, a parent
company and eight debtor affiliates filed for recognition under chapter 15; these debtors were part of a larger group
of 77 companies based in Croatia and approximately 80 affiliates not located in Croatia who were all part of the
Croatian restructuring proceeding. (Id. at 169.) The Court made it clear that its further discretionary relief, like its
recognition of the settlement agreement ultimately reached in that proceeding, was only recognized and enforced
with respect to the Chapter 15 entities within the group. (Id. at 197.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 7 of 91

8
II. 	BACKGROUND10
There is a total of ten Chapter 15 Debtors seeking recognition in these consolidated
Chapter 15 Cases. The Chapter 15 Debtors (and their countries of incorporation in parenthesis)
are: (1) Servicos de Petróleo Constellation S.A. (Brazil), (2) Lone Star Offshore Ltd. (BVI), (3)
Gold Star Equitities Ltd. (BVI), (4) Olinda Star Ltd. (BVI), (5) Star International Drilling
Limited, (Cayman Islands) (6) Alpha Star Equities Ltd. (BVI), (7) Snover International Inc.
(BVI), (8) Arazi S.a.r.l. (Luxembourg), (9) Constellation Oil Services Holding S.A.
(Luxembourg), and (10) Constellation Overseas Ltd (BVI). (Verified Petition at 1 n.1.)
A. Events Leading Up to the Brazilian RJ Proceeding
The sharp decline in oil prices over recent years led to reduced capital spending and
credit as well as an oversupply of rigs in the oil and gas industry. Oil prices began to decline
rapidly in mid-2014, eventually reaching less than $30 per barrel in early 2016. (Id. ¶ 24.) As a
consequence, exploration and production companies reduced their capital spending, yielding an
oversupply in the offshore rig industry and a corresponding decrease in the daily fees earned by
each individual drilling unit (referred to as “dayrates” in Parent/Constellation’s notes offering
memoranda discussed below) and revenues generated from them. (Id.) Reduced revenues that
resulted from reduced dayrates in turn further damaged oil and gas companies by reducing their
creditworthiness and restricting their access to the credit markets. (Id.) At roughly the same
time as oil prices began plummeting, the Brazilian economy entered a recession. (Id. ¶¶ 24-25.)
The recession, political instability, and budget deficits affecting Brazil chilled foreign
investments in Brazilian operations. (Id. ¶ 25.)
10 	The Background section includes the Court’s findings of fact pursuant to FED. R. BANKR . P. 7052, which
incorporates FED. R. CIV. P. 52.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 8 of 91

9
The Constellation Group’s key assets are nine onshore drilling rigs,11 eight offshore rigs
and drillships,12 and five FPSO units13 (the “JV FPSOs”). (Id. ¶¶ 8-9.) Of the twenty-two
drilling rigs that the Constellation Group owns, twenty were located in Brazil as of the petition
date and either served, or had recently served, customers in the Brazilian market under Brazilian
law governed contracts. (Id. ¶¶ 9, 62, 69.) This is why the Constellation Group was profoundly
affected by the Brazilian market’s downturn. As of the petition date, only one of the
Constellation Group’s nine onshore drilling rigs was under contract and only five of the
Constellation Group’s eight offshore rigs were under contract. (Id. ¶ 17; see also “Certified
Translation of the RJ Petition,” ECF Doc. # 7-2, Pet’r Ex. 2 at 39.)14
The Constellation Group’s losses in new investments and lowered dayrates meant that the
Constellation Group was no longer able to fund the investments it incurred when the oil market
was in an upswing. In 2012, when the price of a barrel of oil had risen to over $125, the
Constellation Group, along with much of the industry, experienced tremendous growth and
incurred new debt obligations to expand its operations and investments, including the A/L/B
Project Financings, which are discussed below and were used to finance the acquisition of the
Amaralina Star, Laguna Star, and Brava Star drillships. (Id.) The Constellation Group’s
11 	The onshore rigs are: the QG-I, the QG-II, the QG-III, the QG-IV, the QG-V, the QG-VI, the QG-VII, the
QG-VIII, and the QG-IX). (Verified Petition ¶ 8.)
12 	These consist of three ultra-deepwater semi-submersible rigs (the Alpha Star, the Lone Star, and the Gold
Star), one deepwater semi-submersible rig (the Olinda Star) and three ultra-deepwater drillships (the Amaralina
Star, the Laguna Star, and the Brava Star). (Verified Petition ¶ 8.)
13 	These include the Capixaba, the Cidade de Paraty, the Cidade de Ilhabela, the Cidade de Marica, and the
Cidade de Saquarema. (Verified Petition ¶ 8.)
14 	The three offshore drilling rigs were that were no longer under contract—Alpha Star, Gold Star, and Lone
Star—are each owned by a Chapter 15 Debtor—Alpha Star, Gold Star, and Lone Star. (Verified Petition ¶ 14.) Of
the nine onshore drilling rigs, the Verified Petition notes that these rigs are owned by either Petróleo Constellation or
Snover, which does not provide a clear understanding of which of these two Chapter 15 Debtors—whether the
Brazilian based Chapter 15 Debtor or the BVI based Chapter 15 Debtor, respectively—owns more of these largely
non-operational rigs. (Id. ¶ 17.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 9 of 91

10
incurring of greater leverage prior to the oil downturn compounded cash flow issues for the
group enterprise.
B. The Parties
1. 	The Chapter 15 Debtors
Each Chapter 15 Debtor will be described individually in detail in section II.I below.
However, a brief overview of the Constellation Group as an enterprise group is discussed first in
this overview of the parties. Although the Court must make a COMI determination for each
Chapter 15 Debtor individually, shared functions of the group are relevant to that analysis to the
extent they exist, and an understanding of the holding structure of the group is also necessary.
a. Structure of the Constellation Group
Parent/Constellation serves as the ultimate parent holding company at the apex of the
entire Constellation Group. (Verified Petition ¶ 4 (Organizational Chart).) Parent/Constellation
is an entity organized under the laws of Luxembourg with its registered office in Luxembourg,
and is the direct or indirect parent to the other nine Chapter 15 Debtors in these Chapter 15
Cases. (Id.)
Parent/Constellation is the indirect parent of the BVI incorporated entity Constellation
Overseas. Constellation Overseas, in turn, holds all of the remaining seven Chapter 15 Debtors
that presently remain subject to the Brazilian RJ Proceeding. (Id.) Constellation Overseas holds
the five BVI incorporated Chapter 15 Debtors, the Cayman Chapter 15 Debtor, and is the
indirect parent of Petróleo Constellation, the Brazilian Chapter 15 Debtor. (Id.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 10 of 91

11
b. Management of the Constellation Group
The Foreign Representative argues that the Constellation Group shares a single senior
executive management team. This is supported by the evidence. One of Parent/Constellation’s
notes offerings, for instance, describes a group of “senior management” who will be “responsible
for the day to day management of our operations.” (“2019 Offering Memorandum,” ECF Doc.
#42-1, Pet’r Ex. 4 at 118 (emphasis added); see also 2019 Offering Memorandum at 4 (defining
“our” as referring to Parent/Constellation together with its affiliates throughout the document).)15
The senior management team listed in the 2019 Notes Offering Memorandum consists of a CEO,
CFO, COO, Chief FPSO Operations Officer, CCO, Chief Administrative Director, and General
Counsel. (Id. at 118.) This group of senior management is listed first in the 2019 Notes Offering
Memorandum’s section titled “Management,” before the document goes on to discuss the board
of directors of Parent/Constellation. This objective evidence in the record makes it clear that a
senior executive management team does, in fact, govern the operations of the entire enterprise
group.
The CEO and the CFO—each described as serving the entire Constellation Group—are
based in London and are employed by a non-Chapter 15 Debtor Constellation Oil Services U.K.
Ltd. (Stipulation ¶ 4; Verified Petition at 14 n.14.) The CCO, COO and General Counsel are
based in Brazil; these Brazilian based individuals exercise their activities from the Chapter 15
Debtor Petróleo Constellation. (Stipulation ¶ 5.) The other two members of the senior
management team described in the 2019 Notes Offering Memorandum—the Chief FPSO
Operations Officer and the Chief Administrative Director—are not mentioned in the Stipulation.
However, both individuals received degrees from Brazilian institutions, had most of their work
15 	All page numbers in this opinion refer to ECF pagination rather than internal document pagination.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 11 of 91

12
experience in Brazil, and appeared to be based in Brazil at the time of the issuance of the
offering memorandum. (2019 Notes Offering Memorandum at 119.)
The Foreign Representative also argues that the operational and day-to-day management
of the entire Constellation Group are predominately conducted from Brazil. (Verified Petition ¶
63.) This is supported by the Offering Memorandum for the 2019 Notes. It provides, “[w]e are
a market leading Brazilian-controlled provider of offshore oil and gas contract drilling and FPSO
services in Brazil.” (2019 Notes Offering Memorandum at 15 (emphasis added); see also 2019
Notes Offering Memorandum at 4 (defining “we” as the entire Constellation Group.).) Another
of Parent/Constellation’s debt documents shows that the Constellation Group’s drilling rigs,
which are the primary revenue drivers for the group, were predominately located in Brazil and
chartered to Brazilian customer Petrobras. (“Original Exchange Offer Memorandum,” ECF Doc.
# 43-1, Pet’r Ex. 6, at 230, 296.) Further evidence of the location of daily operations will be
discussed in greater detail with respect to each entity.
c. Employees of the Constellation Group
The Petitioner describes the entire Constellation Group as “employ[ing] over 1,200
individuals, with the vast majority (approximately 93%) located in Brazil.” (Verified Petition ¶
7.) Although there is a lack of clarity provided by the Foreign Representative regarding which
Chapter 15 Debtors employ these individuals, this lack of clarity is echoed in the various offering
memoranda of the notes issued by Parent/Constellation. For example, one memorandum states
“[w]e employ skilled personnel to operate and provide support for our rigs. As of December 31,
2016, we had a total of 1,885 employees, 99% of which were Brazilian nationals.” (Original
Exchange Offer Memorandum at 23 (emphasis added).) Parent/Constellation’s notes offerings
all explain that “[t]he terms ‘our company,’ ‘we,’ ‘our,’ or ‘us,’ as used herein, refer to
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 12 of 91

13
[Parent/Constellation] and its consolidated subsidiaries unless otherwise stated or indicated by
context.” (Id. at 6 (emphasis added); see also “Supplemental Exchange Offer Memorandum,”
ECF Doc. #42-2, Pet’r Ex. 5 at 3 (including the same quote in the introduction); 2019 Notes
Offering Memorandum (also including the same quote in the introduction).)
The Original Exchange Offer Memorandum of Parent/Constellation also explains, “[a]s
of December 31, 2016, we had a total of 1,885 employees working across six sites, four of which
are located in Brazil and one of which is located in the United Kingdom.” (Original Exchange
Offer Memorandum at 123 (emphasis added).) The Original Exchange Offer Memorandum goes
on to provide a table with a breakdown of employees of the Constellation Group by location. In
2016, “QGOG-Brazil” employed 1,850 workers across three Brazilian locations, “Constellation
Services” employed 16 workers in Brazil, “Constellation Panama Corp.” employed 15 workers
in Panama, and “QGOG Constellation UK” employed 4 workers in the United Kingdom. (Id. at
124.) The table makes no reference to any employees located in Luxembourg. (Id.)
2. 	Alperton
Alperton is a family investment vehicle that entered into a joint venture with
Constellation Overseas to build two ultra-deepwater drillships. (See Alperton Objection ¶ 1.)
Alperton is a contingent and unliquidated creditor of the Chapter 15 Debtor Constellation
Overseas, pending the outcome of arbitration in the United States. (See Hr’g Tr. at 59:4-9,
59:12-14.) Alperton is incorporated in the BVI, but all beneficial owners and/or principals of
Alperton are Brazilian citizens and/or residents of Brazil. (Stipulation ¶ 12.)
Pursuant to the joint venture, Alperton and Constellation Overseas established two
special purpose offshore holding companies organized under the laws of the BVI, the Amaralina
Star Ltd. and Laguna Star Ltd. (together, the “Disputed Companies”). (Alperton Objection ¶ 1.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 13 of 91

14
Two substantially similar shareholders’ agreements governed by New York law (together, the
“Shareholders’ Agreements” or “SHAs”)16 apply to the Disputed Companies. (Alperton
Objection ¶ 1.) Prior to the events that are subject to the arbitration described below,
Constellation Overseas owned 55% and Alperton owned 45% of each of the Disputed
Companies. (Original Exchange Offer Memorandum at 108.)
In addition, the Shareholders’ Agreements include covenants relating to the separateness
and corporate governance of the Disputed Companies. For example, section 4.8 of each of the
Shareholders’ Agreements states that each of Constellation Overseas and Alperton will cause the
directors each appoints to act in the best interests of each Disputed Company (as opposed to the
best interests of the Constellation Group as a whole). (See “SHA 1,” ECF Doc. # 36-1 § 4.8; see
also SHA 1 at 1 (defining Company for purposes of the SHA 1); “SHA 2,” ECF Doc. #36-2 §
4.8; SHA 2 at 1 (defining Company for purposes of SHA 2.) Furthermore, the SHAs provide
that decisions regarding the “corporate reorganization, liquidation or dissolution of either
[Disputed Company],” any change in the business17 of the company, and any investments in
other companies are fundamental business decisions that require the unanimous consent of both
Alperton and Constellation. (SHA 1 § 4.9(b); SHA 2 § 4.9(b).)
Although the Disputed Companies are not debtors in these Chapter 15 Cases, the
Disputed Companies are RJ Debtors. (Certified Translation of the RJ Petition at 35-36.) Under
the PSA (discussed below), the Disputed Companies are “Subsequent Chapter 15 Filing
16 	The Shareholders’ Agreements related to the Star Unit I Drilling Vessel (Amaralina Star) and Star Unit II
Drilling Vessel (Laguna Star), dated as of June 24, 2010 and as subsequently amended on September 10, 2010,
September 28, 2010, November 10, 2011, April 12, 2012 and January 17, 2013 are exhibits to the first Dietderich
Declaration. (ECF Doc. ## Nos. 36-1, 36-2.)
17 	The business of each Disputed Company is defined as “(i) the chartering of the Unit to the Charterer under
the Charter Contract and the borrowing of the Project Loan from the Project Lenders or (ii) such other business as
the Shareholders [Alperton and Constellation] may agree from time to time in writing.” (SHA 1 § 12.1; SHA 2 §
12.1.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 14 of 91

15
Entities,” which means that they are to be filed as debtors in these Chapter 15 Cases at a later
date. (“PSA,” ECF Doc. # 6-1, Pet’r Ex. 1 at 10 (“Subsequent Chapter 15 Filing Entities’ shall
mean Amarlina Star Ltd., Laguna Star Ltd. and Brava Star Ltd. and those other Filing Entities
that may be included in the Chapter 15 Proceedings . . . .”).) The subsequent filing of the
Disputed Companies in these Chapter 15 Cases is a mandatory milestone under the PSA. (PSA §
11.01(p)(viii)(C) (located at page 31).)
C. Arbitration Between the Parties
The Shareholders’ Agreements include an arbitration clause, pursuant to which the
Shareholders agreed to binding arbitration in New York under the International Chamber of
Commerce (the “ICC”) Rules of all disputes, controversies or differences related to
the Shareholders’ Agreements. (SHA 1 § 18.2; SHA 2 § 18.2.) As a result of an ongoing
dispute between Alperton and Constellation Overseas, arbitration concerning the joint venture
commenced on August 7, 2018 and a panel (the “Tribunal”) was constituted on December 19,
2018. (Alperton Objection ¶ 3.) The case name and number is Constellation Overseas Ltd. v.
Alperton Capital Ltd., Capinvest Fund Ltd., Universal Investment Fund Ltd., Comercial
Perfuradora Delba Baiana Ltda. and Interoil Representação Ltda., International Chamber of
Commerce International Court of Arbitration, Case No. 23856/MK (the “Arbitration”). (Id. at 3
n.3.) In the arbitration, Constellation Overseas asserts that a “deadlock” occurred and it is
allowed to buyout Alperton’s interests under the Shareholders’ Agreements. (Id. ¶ 3.) Alperton
asserts that there is no “deadlock,” that Alperton’s rights as a shareholder have been ignored and
that Constellation Overseas committed fraud and overcharged the Disputed Companies by
“potentially hundreds of millions of dollars over a multi-year period.”18 (Id.)
18 	On April 26, 2019, the arbitral Tribunal issued an interim award that prevents Constellation Overseas from
taking actions that would effectively destroy Alperton’s potential interest in the Disputed Companies prior to the
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 15 of 91

16
D. Brazilian RJ Proceeding
On December 6, 2018, each of the Chapter 15 Debtors and the RJ Debtors initiated
bankruptcy proceedings in Brazil by filing the RJ Petition with the Brazilian Court. (Verified
Petition at 8; see also Certified Translation of the RJ Petition at 64.) The RJ Petition requests
that the Brazilian Court substantially consolidate the judicial reorganization of the entire group;
this request is based upon the support of creditors. (Certified Translation of the RJ Petition ¶
69.)
The Brazilian Court entered an order formally accepting the RJ Debtors into the Brazilian
Proceeding and authorizing the requested “substantial consolidation.” (Id. at 8.) Although the RJ
Debtors are being consolidated for the purposes of voting on the RJ Debtors’ plan of
reorganization in the RJ Proceeding (the “RJ Plan”), the RJ Plan is not premised on “substantive
consolidation,” as that term is used in the United States (i.e., the RJ Plan does not pool all
debtors’ assets and liabilities for purposes of pro rata distributions). (“Petitioner’s March 25,
2019 MOL,” ECF Doc. # 72 ¶ 4.) Whether the creditors will, in fact, vote as a group will be put
to the vote of the group of creditors; consolidating group voting will not be ordered by the
Brazilian court. (“Majority Opinion English Translation,” ECF Doc. # 79-1 at 70.)19 However,
the purpose of this opinion is to determine the COMI of each of the Chapter 15 Debtors and that
ultimate resolution of the arbitration. (“Interim Award,” ECF Doc. # 81-1, Neuhaus Decl. Ex. 1.) The Interim
Award prevents Constellation Overseas from taking certain actions such as, inter alia, “pledging, transferring or
otherwise encumbering [Alperton’s 45% shareholding in the Disputed Companies] pending a final Award.” (Id. at
50.) Alperton filed a motion seeking an order granting Alperton leave to seek relief from the United States District
Court for the Southern District of New York confirming and enforcing the Interim Award. (“Alperton’s Motion for
Leave to Seek Confirmation of Interim Award,” ECF Doc. # 80 at 4.) A hearing on that motion is currently
scheduled to take place on May 17, 2019.
19 	The English Translation of the Brazilian Court of Appeals’ majority opinion concludes, “My vote,
therefore, is to give partial relief to the appeal to . . . 2) determine the separate presentation of lists of creditors, to be
voted separately in the respective meetings of creditors, which shall approve or reject the proposed substantive
consolidation . . . .” (Majority Opinion English Translation at 70.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 16 of 91

17
determination is separate from this Court’s decision whether to recognize and enforce any plan
that may be approved by creditors and the Brazilian Court in the Brazilian RJ Proceeding. If a
future plan is approved in Brazil and includes substantive consolidation of the debtors’ assets and
liabilities, such that interest owners and creditors of any of the substantively consolidated entities
are unfairly diluted, this Court will need to scrutinize whether the plan can be recognized and
enforced in the United States consistent with principles of comity.20
Appellate proceedings are still pending in Brazil. Several recent decisions appear to have
determined that the Brazilian RJ Proceedings of several of companies within the group must be
dismissed because they are not eligible to file within Brazil. On January 28, 2019, Alperton filed
an interlocutory appeal in the Brazilian Proceeding with the Court of Appeals of the State of Rio
de Janeiro (the “Brazilian Court of Appeals”). (Hr’g Tr. 132:22-23.) Among other relief,
Alperton requests that the Brazilian Court of Appeals: (i) dismiss the Brazilian Proceeding as it
applies to each Disputed Company on the ground that there was no proper corporate authority to
file the Disputed Companies (neither of which are Chapter 15 Debtors) in the RJ Proceeding, (ii)
enter an order declaring that the Brazilian Court is not competent to process the Brazilian RJ
Proceeding as a main proceeding, and (iii) to order the RJ petitioners to produce the
20 	These considerations are currently premature as no plan has so far been approved in Brazil. Alperton has
raised the issue of substantive consolidation in Brazil, alleging that it could wipe out Alperton’s equity interest in
certain solvent subsidiaries of the group. A plan with such an effect might not be recognized and enforced in the
U.S. Cf. Bank of New York v. Treco (In re Treco), 240 F.3d 148 (2d Cir. 2001). The issue in Treco, decided under
former section 304, arose because the priority scheme of the foreign jurisdiction differed from the priority scheme in
the U.S., with a very substantial impact on the objecting secured U.S. creditor. Importantly, the court made clear
that “we begin by recognizing that the priority rules of a foreign jurisdiction need not be identical to those in the
United States.” Id. The court concluded that “[w]e expect that the case-specific analysis required by section 304
[and now by sections 1507(b)(5) and 1522(a)] will in many cases support the granting of the requested relief.” Id. at
161. In other words, deviation from the U.S. priority scheme may be acceptable. See also In re Rede Energia S.A.,
515 B.R. 69, 93 (Bankr. S.D.N.Y. 2014) (recognizing and enforcing Brazilian plan that included substantive
consolidation and that authorized distributions with priorities that differ from those provided in the U.S. Bankruptcy
Code).
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 17 of 91

18
documentation required under Brazilian bankruptcy law, which Alperton alleges they have failed
to provide the Brazilian Court. (Alperton Objection ¶ 29.) In the alternative, Alperton says that
it requests that the Brazilian Court of Appeals overturn the “substantive consolidation order” and
separate the Brazilian Proceeding of the Disputed Companies from the Brazilian Proceeding of
the other RJ Debtors. (Id.) Alperton also requests that the Brazilian Court of Appeals recognize
the primacy of the arbitral Tribunal constituted on December 19, 2018 in New York to resolve
the ownership dispute between Alperton and Constellation Overseas and not authorize the
consummation of any restructuring that would be irreconcilable with an arbitral award
confirming Alperton’s ownership interest in the Disputed Companies. (Id.)
Additionally, the Procuradoria de Justiça do Ministério Público do Estado do Rio de
Janeiro (the “Brazilian Public Prosecutor”) filed an appeal challenging the Brazilian Court’s
acceptance order, which challenges both the grounds for RJ eligibility for the RJ Debtors
incorporated outside of Brazil and the matter of consolidation of the RJ Debtors. (“April 3
Status Update,” ECF Doc. # 73 ¶ 2.)
The Brazilian Court of Appeals held a hearing to rule on the merits of the Brazilian
Public Prosecutor’s appeal on March 26, 2019. (Id.) The English Translation of the Brazilian
Court of Appeals hearing was filed before the Court. (Majority Opinion English Translation.) In
advance of the filing of the English translation resulting from that hearing, the Foreign
Representative informed the Court that at the March 26 hearing, the Brazilian Court of Appeals
determined that three of the RJ Debtors should be removed from the Brazilian RJ Proceeding.
(Id. ¶ 3.)21 Two of these RJ Debtors are also Chapter 15 Debtors—Olinda Star and Arazi. Given
21 	The later filed Majority Opinion English Translation confirms that the Brazilian Court of Appeals
dismissed Arazi, Olinda Star, and Lancaster Projects from the Brazilian RJ Proceedings. (Majority English Opinion
Translation at 59.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 18 of 91

19
the Brazilian Court’s decision to dismiss Olinda Star and Arazi from the Brazilian RJ
Proceedings, it is unnecessary for the Court to determine whether Brazilian proceedings should
be recognized with respect to these two Chapter 15 Debtors.
On February 28, 2019, the RJ Debtors filed a revised reorganization plan with the
Brazilian RJ Court. (“March 14 Update,” ECF Doc. # 60.) The English translation of the
Amended and Restated RJ Plan was filed on March 22, 2019. (“Amended and Restated RJ
Plan,” ECF Doc. # 71-1.) The Foreign Representative is to keep the Court informed of any
developments or further amendments to this plan. (“March 22 Update,” ECF Doc. # 71.)
On February 13, 2019, the Brazilian RJ Court issued an order scheduling the general
meeting of creditors for March 25, 2019 in Rio de Janeiro, Brazil. (“February 19 Update,” ECF
Doc. # 50.) The Brazilian RJ Court subsequently issued two orders, each further postponing
these meetings; currently the first meeting is rescheduled for April 30, 2019 and the adjourned
meeting, if necessary, is scheduled for May 9, 2019. (“April 9 Update,” ECF Doc. # 74 ¶ 2.)
E. Joint Provisional Liquidators
On December 7, 2018, a subset of the Chapter 15 Debtors which are incorporated in the
British Virgin Islands (the “BVI”)—(i) Constellation Overseas, (ii) Lone Star, (iii) Gold Star,
(iv) Olinda Star, (v) Snover and (vi) Alpha Star (the “BVI Debtors”)—each filed an Originating
Application and Ordinary Application (the “BVI Applications”) in the BVI Commercial Court
(the “BVI Court”) pursuant to section 170 of the BVI Insolvency Act 2003 seeking the
appointment of Eleanor Fisher (“Fisher”) of Kalo (Cayman) Limited and Paul Pretlove
(“Pretlove”) of Kalo (BVI) Limited as Joint Provisional Liquidators for each of the BVI Debtors
(such BVI proceedings, the “BVI Proceedings”). (Notice of Change in Status Pursuant to 11
U.S.C. § 1518 and 28 U.S.C. § 1746, ECF Doc. # 21, Pet’r Ex. 18.) The BVI Proceedings were
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 19 of 91

20
commenced to (i) protect the BVI Debtors in that jurisdiction, (ii) provide support to the
Brazilian RJ Proceeding pending in the Brazilian RJ Court, and (iii) otherwise ensure the
successful and global implementation of the Constellation Group’s restructuring. (Id. ¶ 2.)
Following a hearing on December 13, 2018, the BVI Court appointed Fisher and Pretlove as
Joint Provisional Liquidators over each of the BVI Debtors (as appointed, the “JPLs”). (“BVI
JPL Appointment Orders,” ECF Doc. # 31-1, Pet’r Ex. 7-11.) The JPLs are conducting the BVI
Proceedings as so-called “soft-touch” provisional liquidations in which the JPLs will
independently oversee the restructuring of the BVI Debtors while leaving the form and terms of
that restructuring to be proposed by the BVI Debtors in the Brazilian RJ Proceeding. (See id. at
27-28 (explaining the Brazilian RJ Debtors’ duty to keep the JPL’s informed of their continuing
management decisions); “JPL Statement in Support,” ECF Doc. #31-3, Pet’r Ex. 13 ¶ 1 (“The
BVI JPLs are presently conducting the BVI Proceedings as ‘soft-touch’ proceedings pursuant to
the BVI JPL Appointment Orders.”).)
The JPLs are officers of the BVI Court whose function is to represent the collective
interests of the creditors of each debtor for which they are appointed, in particular by overseeing
and protecting from undue dissipation the assets of that debtor and protecting the interests of
creditors in the course of restructuring negotiations. (“BVI JPL Appointment Decision,” ECF
Doc. # 48-1 at 26-27.) In this way, they are a voice for the collective creditors of each BVI
Debtor—including Constellation Overseas.
The JPLs support the efforts of the Foreign Representative in obtaining recognition in
the United States of the Brazilian RJ Proceeding pursuant to Chapter 15 of the Bankruptcy
Code. (JPL Statement in Support ¶¶ 2, 4.) Fisher is based in the Cayman Islands and Pretlove
is based in the BVI. (“JPL Protocol,” ECF Doc. # 31-2, Pet’r Ex. 12 at 2.) Subject to the
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 20 of 91

21
JPLs’ oversight and monitoring, and unless ordered otherwise by the BVI Court,
Constellation Overseas is “operat[ing] [its] [business] in the ordinary course . . . subject
to limitations within the Brazilian RJ Proceeding,” which was commenced prior to the
appointment of the JPLs. 	(JPL Protocol ¶ 2.) “It is the understanding of the BVI JPLs that
Brazil is the principal estabelecimento or ‘principal place of business’ of the Chapter 15
Debtors’ group for purposes of Brazilian law, and that Brazil is the ‘centre of main interests’ or
‘COMI’ of each of the BVI Debtors for the purposes of U.S. restructuring law.” (JPL
Statement in Support ¶ 2.) Further, the JPLs “understand that both the BVI JPL Proceedings
and these Chapter 15 Cases were commenced in support of the Chapter 15 Debtors’ global
restructuring centered in Brazil [and] the BVI Proceedings are intended to work alongside the
Chapter 15 Cases in providing support to the Brazilian RJ Proceeding.” (Id. ¶ 3.)
F. 	The Constellation Group’s Capital Structure
1. 	Capital Stock
The Verified Petition contains a single paragraph describing the capital structure of the
Constellation Group, which seems to use its defined terms referring Parent/Constellation and the
entire Constellation Group interchangeably. (See Verified Petition ¶ 19.) For instance, the
Verified Petition begins by providing that the Constellation Group’s controlling shareholder is
LUX Oil and Gas International S.a.r.l. (“LuxCo”), an entity organized under the laws of
Luxembourg and indirectly wholly-owned by the private equity fund SUN STAR [Fundo de
Investimento em Participacoes Multiestrategia Investimento no Exterior] (“SUN STAR”). (Id.)
The next sentence goes on to explain:
As of the RJ Petition Date, LuxCo owned 74.14% of the total capital
stock and 75.10% of the voting stock of Constellation, and various
holding companies and limited partnerships that are affiliates of
and/or ultimately managed by Capital International, Inc. (“Capital”)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 21 of 91

22
owned the remaining 25.86% and 24.90% of the Company’s total
capital and voting stock, respectively.
(Id. (emphasis added).) Notably, while this excerpt begins by discussing the owner of the
majority of Parent/Constellation’s stock (which is defined as “Constellation” in the Verified
Petition), it goes on to discuss the minority owners of the entire Constellation Group’s stock (the
Constellation Group is defined as the “Company” in the Verified Petition). In doing so, the
sentence implicitly presumes that Parent/Constellation and the Constellation Group are
equivalent entities (indeed, it combines their stocks to reach 100% ownership for each of capital
and voting stock). While these statements may be derivatively true, since Parent/Constellation
owns all of the other members of the Constellation Group, meaning the shareholding of one
could be equated with the other, the imprecision in this presentation of facts for the purposes of
recognition should also be noted.
2. 	Prepetition Debt Structure
The evidence provided by the Petitioner related to the Chapter 15 Debtors’ debt
obligations was also presented to the Court predominately in terms of the entire Constellation
Group, rather than by each entity. The Verified Petition explains that as of November 30, 2018,
the Constellation Group, as a whole, “was liable for approximately $1.5 billion in aggregate
outstanding third-party financial indebtedness (including accrued interest) under four credit
facilities and two bond issuances (the ‘Prepetition Debt’).” (Id. ¶ 20.) The Prepetition Debt is as
follows:
(a) 	“secured syndicated credit facility to finance the Amaralina Star and Laguna Star
drillships (the ‘A&L Project Loan Facility’) with an aggregate principal amount of $943.9
million entered into with various banks and financial parties and governed by New York
law, and secured by mortgages over these drillships, assignments of certain receivables,
and other collateral” (Verified Petition ¶ 20); Amaralina Star Ltd. and Laguna Star Ltd.
(i.e. the Disputed Companies, both of which are Brazilian RJ Debtors) were the initial
borrowers (PSA at 6 (discussed as part of the definition of Credit Agreements under the
PSA)); Parent/Constellation is now a guarantor of this debt (Stipulation ¶ 8);
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 22 of 91

23
(b) 	“secured syndicated credit facility to finance the Brava Star drillship (the ‘Brava
Project Loan Facility’ and, together with the A&L Project Loan Facility, the ‘A/L/B Project
Financings’) with an aggregate principal amount of $475 million entered into with various
banks and financial parties and governed by New York law, and secured by a mortgage
over the Brava Star, assignments of certain receivables, and other collateral” (Verified
Petition ¶ 20); Brava Star Ltd., the borrower (PSA at 6), is a Brazilian RJ Debtor;
Parent/Constellation is now a guarantor of this debt (Stipulation ¶ 8);
(c) 	6.25% senior unsecured notes due November 2019 (the “2019 Notes”) issued
by Parent/Constellation in an aggregate principal amount outstanding of $95,432,000
under a New York law-governed indenture22 (Verified Petition ¶ 20);
(d) 	9.00% Cash/0.500% PIK senior secured notes due 2024 (the “2024 Notes”)
issued 	by 	Parent/Constellation 	in 	an 	aggregate 	principal 	amount 	outstanding 	of
$604,568,000 under a New York law-governed indenture, and secured by mortgages
over “certain of the Offshore Drilling Rigs,” pledges on “ certain accounts,” and “ other
collateral” (Verified Petition ¶ 20)23 ; and
(e) 	two unsecured working capital facilities under which Banco 	Bradesco 	S.A.,
Grand Cayman Branch (“Bradesco”) made available advances in principal amount of up
to $150 million (the “Bradesco I Working Capital Facility”) and $75 million (the
“Bradesco II Working Capital Facility” and, together with the Bradesco I Working
Capital Facility, the “Bradesco Working Capital Facilities”), respectively, and which are
governed by New York law. 	(Verified Petition ¶ 20.) 	Constellation Overseas was the
borrower and Parent/Constellation became a guarantor of the Bradesco Working Capital
Facilities. (PSA at 4.)
The 2024 Notes were the result of negotiations and two separate offering memoranda—
the Original Exchange Offer Memorandum and the Supplemental Exchange Offer
Memorandum. Parent/Constellation’s noteholders rejected the exchange as proposed in the
Original Exchange Offer Memorandum and an ad hoc group of holders formed (the “2019
Group”) to seek better terms for new notes. (Verified Petition ¶ 26.) Following multiple rounds
of negotiations, Parent/Constellation issued the Supplemental Exchange Offer Memorandum
22 	Deutsche Bank Trust Company Americas (the “2019 Notes Trustee”) serves as trustee, paying agent,
transfer agent, and registrar for the 2019 Notes. Prior to the Exchange Offer (defined below), the principal amount
of the 2019 Notes totaled $700 million. (Verified Petition at 14 n.17.)
23 	Wilmington Trust, National Association (the “2024 Notes Trustee” and, together with the 2019 Notes
Trustee, the “Notes Trustees”) serves as trustee, paying agent, transfer agent, and registrar for the 2024 Notes.
(Verified Petition at 14 n.18.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 23 of 91

24
setting forth the revised terms of the 2024 Notes, including changes to interest rates, guarantees,
security, disclosures, and covenants. (Id. ¶ 26; see also Supplemental Exchange Offer
Memorandum at 10-17.) The Supplemental Exchange Offer Memorandum updated and
amended the Original Exchange Offer Memorandum with the terms set forth therein, and
otherwise maintained the terms of the Original Exchange Offer Memorandum, which were not
modified. (Supplemental Exchange Offer Memorandum at 2 (“[E]xcept as set forth herein, the
contents of the Offering Memorandum, including the terms of the Exchange Offer and Consent
Solicitation, remain as set forth therein.”).) The noteholders accepted this revised exchange
offer, which ultimately exchanged 86.4% of Parent/Constellation’s 2019 Notes for an equal
aggregate principal amount of the 2024 Notes. (See Verified Petition ¶ 26.)
Unfortunately, the maturity extensions achieved by the exchange were not sufficient to
solve all of the Constellation Group’s financial issues. (Id. ¶ 27.) Thus, in the months leading
up to the commencement of the Brazilian RJ Proceeding, the Constellation Group sought to
obtain a comprehensive restructuring of its debt obligations. Those restructurings ultimately
resulted in the PSA. Under the PSA, the Constellation Group essentially entered the Brazilian
RJ Proceeding with a pre-negotiated restructuring deal. (Id. ¶ 31.) On November 29, 2018, (i)
16 entities in the Constellation Group (including all Chapter 15 Debtors), (ii) the shareholders of
the Constellation Group, (iii) 97.5% of the A/L/B Lenders (the “Consenting A/L/B Lenders”),
and (iv) Bradesco entered into the PSA. (PSA at 2.)
In another example of entity blurring, the Verified Petition explains the terms of the PSA
as:
Consenting A/L/B Lenders have agreed to re-lend approximately $39
million in funds that were escrowed in August and September of 2018,
Bradesco agreed to provide a $15 million letter of credit, and the
shareholders agreed to invest $27 million of new money at closing, all to
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 24 of 91

25
ensure that the Constellation Group had ample liquidity to survive a
prolonged downturn in the market post-restructuring.
(Id. ¶ 31.) Notably, the Verified Petition does not clarify the specific entities or accounts that
received access to funds or letters of credit through the PSA. Again, the Petitioner presented the
evidence to the Court in terms of the Constellation Group as a whole.
Alperton also noted several provisions in the PSA that affect their potential interests in
the Disputed Companies. (See Alperton FOF ¶ 32.) The PSA provides for cross-collateralizing
the Brava Project Loan Facility and the A&L Project Loan Facility. (See PSA at 54-63
(Schedule 1).) If performed in accordance with its terms, the PSA would provide lenders under
the Brava Project Loan Facility with liens on each of the Amaralina Star and Laguna Star
vessels and a pledge on 100% of the shares of each of Laguna Star Ltd. and Amaralina Star Ltd.
(Id.)
The PSA requires as a condition precedent to the implementation of the restructuring
transactions that the Chapter 15 Debtors (and later another group of the RJ Debtors) receive an
order from this Court granting recognition of the Brazilian RJ Proceeding with respect to those
entities. (Verified Petition ¶ 31; see also PSA at 8 (defining the Chapter 15 Debtors as the Initial
Chapter 15 Filing Entities); see also PSA at 9 (defining the Subsequent Chapter 15 Filing
Entities).)
In parallel with the negotiations towards the PSA, the Constellation Group also engaged
in negotiations with Bradesco that led to Parent/Constellation becoming a guarantor of
Constellation Overseas debt. Specifically, Bradesco agreed to several extensions of the final
maturity payments under the Bradesco Working Capital Facilities in exchange for, inter alia,
Parent/Constellation becoming a guarantor for the obligations of Constellation Overseas under
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 25 of 91

26
the Bradesco Working Capital Facilities. (Verified Petition ¶ 29; see also Verified Petition at 24
n.22.)
G. Galdino Declaration on Brazilian Bankruptcy Law
Flavio Galdino, counsel for the Constellation Group in the Brazilian Proceeding,
provided a declaration pursuant to 28 U.S.C. § 1746. (“Galdino Declaration,” ECF Doc. # 4,
Pet’r Ex. 15.) Galdino declares that “Brazil has not adopted the UNCITRAL Model Law on
Cross-Border Insolvency and currently has no statutory definition of center of main interests
(‘COMI’) for the purposes of establishing the competent country of jurisdiction for the main
insolvency proceedings either of a company or of a group of companies.” (Id. ¶ 9.) According
to Galdino, under Brazilian law, “[a]n entity commences an RJ by filing a petition with the
business court (the ‘RJ Court’) in the jurisdiction in which it maintains its principal place of
business . . . .” (Id. ¶ 8.) Galdino further explains that the Brazilian Court’s jurisdictional
requirement is referred to as principal estabelecimento, and Brazilian Court’s must find that a
debtor or group of debtors have their principal estabelecimento in Brazil. (Id. ¶ 9.) That said, he
also explains that principal estabelecimento is interpreted broadly and that the RJ Court can
focus on either the location of a debtor’s assets and operations or on the location of management
and decision makers. (Id. ¶ 10.)
With respect to what Galdino refers to as “substantive consolidation” as it is “referred to
in the United States,” Galdino notes that while some RJ Courts have allowed substantive
consolidation, “[w]hether a court will allow substantive consolidation is a fact-intensive
determination heavily dependent upon the nature of the relationship among the affiliated debtors
and any interrelated debt subject to restructuring.” (Id. ¶ 12.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 26 of 91

27
Alperton’s Proposed Findings of Fact highlights this portion of the Galdino Declaration
and emphasizes that substantive consolidation of creditors for negotiation and voting on a single
plan has, in fact, been allowed in Brazil and could be allowed here. (Alperton FOF ¶ 38.)
However, the Court emphasizes that this opinion will only determine recognition of the
proceedings; the decisions reached in this opinion do not assure that further discretionary relief
will follow—such as this Court’s recognition and enforcement of any plan that may be approved
in Brazil. Indeed, ample precedent dictates that the Court may refuse to recognize and enforce a
plan if approval was obtained by an unfair voting system, even when the plan is approved in a
country that usually enjoys comity from the United States. See, e.g., Ad Hoc Grp. of Vitro
Noteholders v. Vitro S.A.B. de C.V. (In re Vitro S.A.B. de C.V.), 701 F.3d 1031 (5th Cir. 2012); In re
Cozumel Caribe, S.A. de C.V., 482 B.R. 96, 108-113 (Bankr. S.D.N.Y. 2012).
H. Analysis of Individual Chapter 15 Debtors
1. 	Parent/Constellation
Parent/Constellation is a tax resident of Luxembourg with its central administration in
Luxembourg as a matter of Luxembourg tax law. (Stipulation ¶ 7.) Parent/Constellation is a
holding and financing company that owns equity interests in subsidiaries in the Constellation
Group and engages in the necessary activities for borrowing and guaranteeing debt. (Verified
Petition ¶ 75.) The Court finds that Parent/Constellation’s registered office is in Luxembourg.
Parent/Constellation’s board of directors is composed of six members. (Stipulation ¶
1.) Three directors are residents and citizens of Brazil; two are residents and citizens of
Luxembourg; and one is a resident and citizen of Switzerland. (Id.) Parent/Constellation holds its
board of directors’ meetings and shareholder meetings in Luxembourg, as required for companies
incorporated under Luxembourg law. (Stipulation ¶ 6; Hr’g Tr. 50: 6-10.) The Original
Exchange Offer Memorandum states, “[i]n accordance with Luxembourg law,
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 27 of 91

28
[Parent/Constellation’s] Board of Directors is the sole responsible body for managing
[Parent/Constellation and its consolidated subsidiaries’] affairs and ensuring that
[Parent/Constellation and its consolidated subsidiaries’] operations are organized in a satisfactory
manner.” (Original Exchange Offer Memorandum at 131.) The 2019 Notes Offering
Memorandum further states that Parent/Constellation’s “Board of Directors is empowered to take
any action necessary or desirable for carrying out [its] corporate objective, except for the
powers specifically allocated to the general meeting of [its] shareholders by Luxembourg
law and/or by [its] Articles.” (2019 Notes Offering Memorandum at 121.) The Court finds that
Parent/Constellation’s management is located in Luxembourg, where the board of directors
conducts business.
As a holding company, Parent/Constellation does not have any assets other than its
ownership interests in its subsidiaries. (Id. at 39.) The 2019 Notes Offering Memorandum
explains: “The issuer is a holding company, and all of its assets are held by its direct and indirect
subsidiaries.” (Id.) The Supplemental Exchange Offering Memorandum describes
Parent/Constellation’s operations by explaining, “[Parent/Constellation] is incorporated in the
laws of the Grand Duchy of Luxembourg, and [Parent/Constellation] conducts most of its
business from Brazil.” (Supplemental Exchange Offering Memorandum at 21 (emphasis added).)
The Original Exchange Offer Memorandum states, “[t]he issuer is a holding company with no
independent operations or assets and it is dependent on cash flow generated by its subsidiaries.”
(Original Exchange Offer Memorandum at 53.) It goes on to explain, “[r]epayment of our
indebtedness, including the New Notes, is dependent on the generation of cash flow by our
subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or
otherwise.” (Id.) Parent/Constellation’s key indirect assets are its drilling rigs, which, with the
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 28 of 91

29
exception of the Olinda Star and one of its onshore drilling rigs, were all located in Brazil as of
the Petition Date. (Verified Petition ¶¶ 9, 14-18.) At the Hearing, Alperton suggested that, as of
the Petition Date, several of the drilling rigs were operating on the high seas and were not located
in Brazil. (Hr’g Tr. 108:18-24.) However, the evidence in the record demonstrates that 20 of the
22 drilling rigs were located in Brazil as of the petition date; the two that were not in Brazil were
in India and Paraguay. (Verified Petition ¶¶ 9, 14-18; see also Certified Translation of the RJ
Petition at 39.) The Verified Petition explains: “The Offshore Drilling Rigs and Onshore Drilling
Rigs are the Company’s primary operating assets. Seven of the eight Offshore Drilling Rigs are
presently located in Brazil, eight of its nine Onshore Drilling Rigs are located in Brazil, and all of
the JV FPSO Units in which it holds an interest are located in Brazil.” (Verified Petition ¶ 9.)
Based on the foregoing evidence, the Court finds that Parent/Constellation’s assets are primarily
located in Brazil.
Parent/Constellation has no officers. (2019 Offering Memorandum at 118 (“There are no
statutory officers under Luxembourg law . . . members of senior management set forth below
currently serve as senior managers of QGOG and will be responsible for the day-to-day
management of our operations.”) (emphasis added); see also Stipulation ¶¶ 4-5.)
Parent/Constellation makes use of the Constellation Group’s shared corporate management team,
its operational management team, and its employees, who are employed by Parent/Constellation’s
direct or indirect subsidiaries. As discussed above, the shared corporate management team are
located in both London and Brazil. The court finds that the location of executive management
team of Parent/Constellation is split between London and Brazil.
Parent/Constellation is the issuer of the 2019 Notes and the 2024 Notes; it is also
guarantor of the A/L/B Project Financings and guarantor of the Bradesco Working Capital
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 29 of 91

30
Facilities. (Stipulation ¶¶ 8-11.) The indenture trustees of the 2019 Notes and the 2024 Notes are
located in New York and there is no evidence in the record regarding the location of the beneficial
holders of the 2019 Notes and 2024 Notes, other than a holder of 2019 Notes that is a Brazilian
national located in New York. (See “Noteholder Letter,” ECF Doc. # 38.) There is no evidence
in the record that any of Parent/Constellation’s creditors are located in Luxembourg or Brazil.
(See “Notice List,” ECF Doc. # 7-6 at 8-9.) As such, the Court finds that the location of most of
Parent/Constellation’s creditors is indeterminate.
The Supplemental Exchange Offer states:
The Company [defined to be the issuer, Parent/Constellation]24 and
Arazi are incorporated under the laws of Luxembourg, and as such,
any insolvency proceedings applicable to them are in principle
governed by Luxembourg law.
(Supplemental Exchange Offer Memorandum at 21.) Further, the Supplemental Exchange Offer
explains that the section titled “Certain Luxembourg Insolvency Law Considerations” in the
2019 Notes Offering Memorandum should be read as applicable to “both the Company and
Arazi.” (Supplemental Exchange Offer Memorandum at 22.) The Supplemental Exchange Offer
Memorandum also explicitly explains to investors that restructuring proceedings could be
commenced in Brazil due to the Constellation Group’s significant ties there, stating:
[I]n 	the 	event 	of 	any 	bankruptcy, 	insolvency, 	liquidation,
dissolution, reorganization or similar proceedings involving us or
any of our subsidiaries, bankruptcy laws other than those of the
United States could apply. . . . [I]n the event that we do experience
financial difficulty, it is not possible to predict with certainty in
which jurisdiction insolvency proceedings would be commenced or
the outcome of such proceedings, but it may include, among other
24 	The Original Exchange Offer Memorandum explains “by the ‘Company,’ we mean QGOG Constellation
S.A., and not its Subsidiaries”).” (Original Exchange Offer OM, ECF Doc. # 43-1 at 140.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 30 of 91

31
jurisdictions, Brazil, where certain decisions of the Company25 are
made, certain members of the Company’s management are located
and the location of substantially all of the Company’s business is
conducted (and, therefore, from which substantially all of the
operating revenues that may be available to service the Company’s
obligations under the New Notes are currently derived).
(Supplemental Exchange Offer Memorandum at 21.)
The Supplemental Exchange Offer Memorandum further explains risks associated with
Brazilian insolvency proceedings:
In Brazil, the right of the Collateral Trustee to repossess and dispose
of the Collateral securing the New Notes upon acceleration may be
significantly impaired by applicable bankruptcy law if bankruptcy
proceedings were commenced by or against the issuer or the
Subsidiary Guarantors prior to or possibly even after the time that
the Collateral Trustee repossesses and disposes of the Collateral. In
the event of a cross-border insolvency, Brazilian courts may impair
the seizure of the Drilling Rigs located in Brazil, in order to protect
the business activities in Brazil and/or ensure the payment of the
relevant debt in accordance with Brazilian laws.
In addition, in case of judicial reorganization or liquidation under
Brazilian law, it is impossible to estimate the period that payments
under the New Notes could be delayed following commencement of
a 	bankruptcy 	proceeding. 	With 	respect 	to 	the 	judicial
reorganization, the debtor may continue to retain and to use the
collateral and the proceeds, products, rents or profits therefrom. The
judicial reorganization proceeding binds all pre-filing secured debts,
even those not yet due, and they will be paid in accordance with the
restructuring plan submitted by the debtor, which must be approved
by 	the 	majority 	of 	creditors 	in 	a 	creditors’ 	meeting 	and,
subsequently, 	ratified 	by 	the 	Brazilian 	court. 	In 	certain
circumstances, the Brazilian bankruptcy law also grants the debtor
the possibility to cram down the plan. The reorganization plan
results in the replacement and renewal of all debts existing prior to
the filing of the reorganization, and is binding on the debtor and all
creditors subject to it.
In relation to a bankruptcy proceeding, the Collateral Trustee is
prohibited from repossessing or disposing of the Collateral securing
25 	The Supplemental Exchange Offer Memorandum defines the “Company” as QGOG Constellation S.A.
(Exchange Offer Memorandum at 10.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 31 of 91

32
the New Notes because all assets of the debtor, including the
Collateral, will be sold in order to pay the creditors according to the
priority order established in the Brazilian bankruptcy law. Secured
debt have priority in the ranking and are paid just after labors’
claims, up to the amount of the Collateral. 	Any shortfall will be
classified as “unsecured debt”.
(Id.)
The Court therefore finds that the objective indicia of Parent/Constellation’s creditors’
expectations of an insolvency proceeding’s location could be in either Brazil or Luxembourg.
However, unlike Parent/Constellation’s subsidiaries, Parent/Constellation is the original issuer of
both the 2019 and 2024 Notes. Even though the memoranda for these notes frequently discusses
the entire Constellation Group, which it refers to as “we,” “us,” etc., this does not change the fact
that the issuer listed at the beginning of each of the notes is described as a public limited liability
company incorporated in the Grand Duchy of Luxembourg. (See 2019 Notes Offering
Memorandum at 3; Original Exchange Offer Memorandum at 2; Supplemental Exchange Offer
Memorandum at 2.) As such, the Court finds that the objective expectations of creditors with
respect to Parent/Constellation’s COMI should be determined to be predominately in
Luxembourg.
New York law is the governing law of all of the Prepetition Debt of the Constellation
Group, which Parent/Constellation either issued or now guarantees. (Verified Petition ¶ 20;
Alperton FOF ¶ 62.) Alperton asserts that New York is the jurisdiction whose law would apply
to most of Parent/Constellation’s disputes. (Alperton FOF ¶ 101.) The documentation relevant
to all prepetition debt is in English. While there is no evidence in the record of a current dispute
about Luxembourg law, Luxembourg law is an unavoidable part of the reorganization for
Parent/Constellation, because Luxembourg law will determine, inter alia: (i) the fiduciary duties
applicable to Parent/Constellation’s board, (ii) the extent to which foreign proceedings outside
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 32 of 91

33
Luxembourg are consistent or inconsistent with these fiduciary duties, and (iii) the authority for
and validity of any actions taken by Parent/Constellation under corporate law. (Alperton FOF ¶
102.) The Court therefore determines that while many countries laws could govern the range of
feasible disputes that Parent/Constellation could be involved in, Luxembourg law should be
considered the most relevant law governing Parent/Constellation’s disputes for purposes of the
COMI determination.
2. 	Alpha Star
Chapter 15 Debtors Alpha Star, Gold Star, Olinda Star, Lone Star, and Star Int’l are the
offshore rig owners (“Offshore Rig Owner Debtors”). (Verified Petition at 13.) Alpha Star
owns the Alpha Star offshore drilling rig, which is not presently under contract and is being
maintained in a shipyard in Brazil. (Id. ¶¶ 9, 14.) The Alpha Star is classified as capable of ultra-
deepwater drilling. (Certified Translation of the RJ Petition at 38.)
Alpha Star is organized under the laws of the BVI; it maintains its registered office in the
BVI. (Verified Petition ¶ 73.) The sole director of Alpha Star is Michael Pearson, a citizen of
the United Kingdom, who resides in the Cayman Islands. (Stipulation ¶ 2.)
The Alpha Star’s offshore rig is operated and maintained by Chapter 15 Debtor Petróleo
Constellation and other Brazilian subsidiaries pursuant to operating and maintenance
agreements, through its operational management team and operational staff located in the
Brazilian offices. (Verified Petition ¶ 70.) The Original Exchange Offer Memorandum explains
that QGOG (which is the former name of Chapter 15 Debtor Petróleo Constellation)26 agreed to
manage, be technically responsible for, and/or perform the activities and works of maintenance
26 	Page 17 of the Original Exchange Offer Memorandum defines “QGOG” as “Queiroz Galvao Oleo and Gas
S.A., one of our Brazilian subsidiaries.” The Plan Support and Lock Up Agreement explains on page 2 that Petróleo
Constellation was formerly known Queiroz Galvao Oil & Gas S.A.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 33 of 91

34
necessary to maintain and preserve Alpha Star and all its parts, components, and equipment.
(Original Exchange Offer Memorandum at 118.) The operations of Alpha Star are therefore
predominately in Brazil.
Alpha Star is a guarantor of the 2024 Notes issued by Parent/Constellation. (Stipulation ¶
10.) The indenture trustees of the 2024 Notes are in New York. Otherwise, there is no evidence
in the record regarding the location of the beneficial holders of the 2024 Notes.
The expectations of the creditors of the 2024 Notes, the key creditor constituency of the
offshore drilling rigs, may be objectively determinable by reference to the offering memoranda
related to the 2024 notes. The initial offering document described the Constellation Group by
explaining “[w]e are a market leading provider of offshore oil and gas contract drilling and
FPSO services in Brazil.” (Original Exchange Offer Memorandum at 20.) The overview section
of the document further explains “[i]n particular, we believe that we are well positioned to
benefit from the ultra-deepwater drilling activity in Brazil . . . .” (Id.) Since Alpha Star owns an
ultra-deepwater rig, this would have put 2024 Note purchasers on notice that Alpha Star was not
only located in Brazil, but also had its future operations in Brazil. Indeed, a map provided in the
same document shows that Alpha Star is located off the coast of Brazil. (Id. at 108.) The
document states that all of the Offshore Drilling Rigs other than Olinda Star are under charter
contracts with Petrobras. (Id.) Finally, the offering expressly refers several times to the
chartering and operations of the offshore drilling rigs, explaining that those rigs operated
“mainly in Brazil” and were currently chartered “mainly to [Petrobras].” (Id. at 230, 296.)
The Supplemental Exchange Offer to the Original Exchange Offer Memorandum
conveys to the holders of the 2024 Notes that insolvency proceedings may be commenced in
Brazil and explains the consequences that a Brazilian restructuring or liquidation proceeding
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 34 of 91

35
could have on their ability to enforce their collateral, including the mortgages granted to them
over the offshore drilling rigs. (Supplemental Exchange Offer Memorandum at 21 (describing
Brazil as the location “from which substantially all of the operating revenues that may be
available to service [Parent/Constellation’s] obligations under the New Notes are currently
derived.”).)
The Supplemental Exchange Offer Memorandum also contains evidence of the laws
applicable to Alpha Star and other rigs. For example, because the Alpha Star rig is in Brazil, the
arrest and seizure of the rig would take place under Brazilian law and require a judicial order
issued by a Brazilian Court. (Id. at 22.) The same paragraph explains that there could be third-
party claims under maritime liens such as ports and maritime costs and taxes; seamen’s wages;
salvage and general average; repairs, supplies and necessaries contracted outside the mortgaged
drilling rigs’ home port; collision and tort liens; and simple and general damages to the drilling
rigs. (Id.)
The JPLs have been appointed with respect to each of Lone Star, Gold Star, Olinda Star,
and Alpha Star, and function to protect the interests of the collective creditors of each. (JPL
Statement in Support ¶ 2.) They have expressed support for the Brazilian RJ Proceeding and for
a finding of COMI in Brazil for each of these BVI Debtors. (Id.)
3. 	Gold Star
Gold Star is an offshore rig owner organized under the laws of the BVI and maintains its
registered office in the BVI. (Verified Petition ¶ 73.) The sole director is Michael Pearson, a
citizen of the United Kingdom, who resides in the Cayman Islands. (Stipulation ¶ 2.) Gold Star
owns the Gold Star offshore drilling rig, which is not presently under contract and is being
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 35 of 91

36
maintained in a shipyard in Brazil. (Verified Petition ¶¶ 9, 14.) The Gold Star is classified as
capable of ultra-deepwater drilling. (Certified Translation of the RJ Petition at 38.)
The Gold Star’s offshore rig is operated and maintained by Chapter 15 Debtor Petróleo
Constellation and other Brazilian subsidiaries pursuant to operating and maintenance
agreements, through its operational management team and operational staff located in the
Brazilian Offices. (Verified Petition ¶ 70.) The Original Exchange Offer Memorandum explains
that QGOG (defined as one of “our Brazilian subsidiaries” on page 17 of the Original Exchange
Offer Memorandum) agreed to manage, be technically responsible for, and/or perform the
activities and works of maintenance necessary to maintain and preserve Gold Star and all its parts,
components, and equipment. (Original Exchange Offer Memorandum at 118.)
Gold Star is a guarantor of the 2024 Notes issued by Parent/Constellation. (Stipulation ¶
10.) The indenture trustees of the 2024 Notes are located in New York; otherwise, there is no
evidence in the record regarding the location of the beneficial holders of the 2024 Notes.
The expectations of the creditors of the 2024 Notes, the key creditor constituency of the
offshore drilling rigs, may be objectively determinable by reference to the offering memoranda
related to the 2024 notes. The Original Exchange Offer Memorandum describes the
Constellation Group as “[w]e are a market leading provider of offshore oil and gas contract
drilling and FPSO services in Brazil.” (Original Exchange Offer Memorandum at 20.)
Additionally, the overview paragraph states “[i]n particular, we believe that we are well
positioned to benefit from the ultra-deepwater drilling activity in Brazil . . . .” (Id.) Since Gold
Star owns an ultra-deepwater rig, this would have put 2024 Note purchasers on notice that Gold
Star was not only located in Brazil, but had its future operations in Brazil. Indeed, a map
provided in the Original Exchange Offer Memorandum shows that Gold Star is located off the
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 36 of 91

37
coast of Brazil. (Id. at 108.) The same page of the document states that all the offshore drilling
rigs other than Olinda Star are under charter contracts with Petrobras. (Id.) Finally, the Original
Exchange Offer Memorandum expressly refers several times to the chartering and
operations of the offshore drilling rigs, explaining that those rigs operate mainly in Brazil
and were currently chartered “mainly to [Petrobras].” (Id. at 230, 296.)
The Supplemental Exchange Offer to the Original Exchange Offer Memorandum
conveys to the holders of the 2024 Notes that insolvency proceedings may be commenced in
Brazil and explains the consequences that a Brazilian restructuring or liquidation proceeding
could have on their ability to enforce their collateral, including the mortgages granted to them
over the offshore drilling rigs. (Supplemental Exchange Offer Memorandum at 21 (describing
Brazil as the location “from which substantially all of the operating revenues that may be
available to service [Parent/Constellation’s] obligations under the New Notes are currently
derived.”).)
The Supplemental Exchange Offer Memorandum also contains evidence of the laws
applicable to Gold Star and other rigs. For example, because the Gold Star rig is in Brazil, the
arrest and seizure of the rig would take place under Brazilian law and require a judicial order
issued by a Brazilian Court. (Id. at 22.) The same paragraph explains that there could be third-
party claims under maritime liens such as ports and maritime costs and taxes; seamen’s wages;
salvage and general average; repairs, supplies and necessaries contracted outside the mortgaged
drilling rigs’ home port; collision and tort liens; and simple and general damages to the drilling
rigs. (Id.)
The JPLs have been appointed with respect to each of Lone Star, Gold Star, Olinda Star,
and Alpha Star, and function to protect the interests of the collective creditors of each. (FRFOF
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 37 of 91

38
¶ 79.) They have expressed support for the Brazilian RJ Proceeding and for a finding of COMI
in Brazil for each of these BVI Debtors. (FRFOF ¶ 79.)
4. 	Olinda Star
The Brazilian Court of Appeals determined that Olinda Star should be removed from the
Brazilian RJ Proceeding. Thus, discussion of this Chapter 15 Debtor’s possible recognition is
unnecessary.
5. 	Lone Star
Lone Star is an offshore rig owner organized under the laws of the BVI and maintains its
registered office in the BVI. (Verified Petition ¶ 73.) The sole director is Michael Pearson, a
citizen of the United Kingdom, who resides in the Cayman Islands. (Stipulation ¶ 2.) Lone Star
owns the Lone Star offshore drilling rig, which is not presently under contract and is being
maintained in a shipyard in Brazil. (Verified Petition ¶¶ 9, 14.) The Lone Star rig is classified as
capable of ultra-deepwater drilling. (Certified Translation of the RJ Petition at 38.)
The Lone Star’s offshore rig is operated and maintained by Chapter 15 Debtor Petróleo
Constellation and other Brazilian subsidiaries pursuant to operating and maintenance
agreements, through its operational management team and operational staff located in the
Brazilian Offices. (Verified Petition ¶ 70.) The Original Exchange Offer Memorandum explains
that QGOG (defined as one of “our Brazilian subsidiaries” on page 17 of the Original Exchange
Offer Memorandum) agreed to manage, be technically responsible for, and/or perform the
activities and works of maintenance necessary to maintain and preserve Lone Star and all its parts,
components, and equipment. (Original Exchange Offer Memorandum at 118.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 38 of 91

39
Lone Star is a guarantor of the 2024 Notes issued by Parent/Constellation. (Stipulation ¶
10.) The indenture trustees of the 2024 Notes are located in New York; otherwise, there is no
evidence in the record regarding the location of the beneficial holders of the 2024 Notes. The
expectations of the creditors of the 2024 Notes, the key creditor constituency of the offshore
drilling rigs, may be considered to be objectively determinable by reference to the offering
memoranda related to the 2024 notes. The Original Exchange Offer Memorandum explains the
Constellation Group, as a whole, as “[w]e are a market leading provider of offshore oil and gas
contract drilling and FPSO services in Brazil.” (Original Exchange Offer Memorandum at 20.)
Additionally, the overview paragraph states “[i]n particular, we believe that we are well
positioned to benefit from the ultra-deepwater drilling activity in Brazil . . . .” (Id.) Since Lone
Star owns an ultra-deepwater rig, this would have put 2024 Note purchasers on notice that a rig
like Lone Star was not only located in Brazil but had its future operations in Brazil. Indeed, a
map provided in the Original Exchange Offer Memorandum shows that Lone Star is located off
of the coast of Brazil. (Id. at 108.) The same page of the document states that all of the offshore
drilling rigs other than Olinda Star are under charter contracts with Petrobras. (Id.) Finally, the
Original Exchange Offer Memorandum expressly refers several times to the chartering and
operations of the offshore drilling rigs, explaining that those rigs operate “mainly in Brazil”
and were currently chartered “mainly to [Petrobras].” (Id. at 230, 296.)
The Supplemental Exchange Offer to the Original Exchange Offer expressly conveys to
the holders of the 2024 Notes that insolvency proceedings may be commenced in Brazil and
explains the consequences that a Brazilian restructuring or liquidation proceeding could have on
their ability to enforce their collateral, including the mortgages granted to them over the offshore
drilling rigs. (Supplemental Exchange Offer at 21 (describing Brazil as “the location . . . from
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 39 of 91

40
which substantially all of the operating revenues that may be available to service the Company’s
obligations under the New Notes are currently derived.”).)
The Supplemental Exchange Offer also contains evidence of the laws applicable to Lone
Star and other rigs. For example, because the Lone Star rig is in Brazil, the arrest and seizure of
the rig would take place under Brazilian law and require a judicial order issued by a Brazilian
Court. (Id. at 22.) The same paragraph explains that there could be third-party claims under
maritime liens such as ports and maritime costs and taxes; seamen’s wages; salvage and general
average; repairs, supplies and necessaries contracted outside the mortgaged drilling rigs’ home
port; collision and tort liens; and simple and general damages to the drilling rigs. (Id.)
The JPLs have been appointed with respect to each of Lone Star, Gold Star, Olinda Star,
and Alpha Star, and function to protect the interests of the collective creditors of each. (FRFOF
¶ 79.) They have expressed support for the Brazilian RJ Proceeding and for a finding of COMI
in Brazil for each of these BVI Debtors. (FRFOF ¶ 79.)
6. 	Star Int’l
Star Int’l is an offshore rig owner organized under the laws of the Cayman Islands and
maintains its registered office there. (Verified Petition ¶ 73.) The sole director is Michael
Pearson, a citizen of the United Kingdom, who resides in the Cayman Islands. (Stipulation ¶ 2.)
Star Int’l owns the Atlantic Star offshore drilling rig; as of the petition date, the Atlantic Star was
under contract with Petrobras and operating in Brazilian waters. (Verified Petition ¶ 14.) The
Atlantic Star rig is classified as a midwater drilling rig. (Certified Translation of the RJ Petition
at 38.)
Star Int’l’s offshore rig is operated and maintained by Chapter 15 Debtor Petróleo
Constellation and other Brazilian subsidiaries pursuant to operating and maintenance
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 40 of 91

41
agreements, through its operational management team and operational staff located in the
Brazilian Offices. (Verified Petition ¶ 70.) The Original Exchange Offer Memorandum explains
that QGOG (defined as one of “our Brazilian subsidiaries” on page 17 of the Original Exchange
Offer Memorandum) agreed to manage, be technically responsible for, and/or perform the
activities and works of maintenance necessary to maintain and preserve Atlantic Star (the rig
owned by Star Int’l) and all its parts, components, and equipment. (Original Exchange Offer
Memorandum at 118.)
Star Int’l is a guarantor of the 2024 Notes issued by Parent/Constellation. (Stipulation ¶
10.) The indenture trustees of the 2024 Notes are located in New York; otherwise, there is no
evidence in the record regarding the location of the beneficial holders of the 2024 Notes.
The expectations of the creditors of the 2024 Notes, the key creditor constituency of the
offshore drilling rigs, may be considered to be objectively determinable by reference to the
offering memoranda related to the 2024 notes. The Original Exchange Offer Memorandum
describes the Constellation Group, as a whole, as “[w]e are a market leading provider of offshore
oil and gas contract drilling and FPSO services in Brazil.” (Original Exchange Offer
Memorandum at 20.) A map provided in the Original Exchange Offer Memorandum shows that
the Atlantic Star is located off of the coast of Brazil. (Id. at 108.) The same page of the
document states that all of the offshore drilling rigs other than Olinda Star are under charter
contracts with Petrobras. (Id.) Finally, the Original Exchange Offer Memorandum expressly
refers several times to the chartering and operations of the offshore drilling rigs, explaining
that those rigs operate “mainly in Brazil” and were currently chartered “mainly to [Petrobras].”
(Id. at 230, 296.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 41 of 91

42
The Supplemental Exchange Offer Memorandum conveys to the holders of the 2024
Notes that insolvency proceedings may be commenced in Brazil and explains the consequences
that a Brazilian restructuring or liquidation proceeding could have on their ability to enforce their
collateral, including the mortgages granted to them over the offshore drilling rigs.
(Supplemental Exchange Offer at 21 (describing Brazil as “the location . . . from which
substantially all of the operating revenues that may be available to service the Company’s
obligations under the New Notes are currently derived.”)
The Supplemental Exchange Offer Memorandum also contains evidence of the laws
applicable to Star Int’l and other rig owners. For example, because the Atlantic Star rig is in
Brazil, the arrest and seizure of the rig would take place under Brazilian law and require a
judicial order issued by a Brazilian Court. (Id. at 22.) The same paragraph explains that there
could be third-party claims under maritime liens such as ports and maritime costs and taxes;
seamen’s wages; salvage and general average; repairs, supplies and necessaries contracted
outside the mortgaged drilling rigs’ home port; collision and tort liens; and simple and general
damages to the drilling rigs. (Id.)
7. Snover
All of Snover’s rigs were located in Brazil as of the petition date. (Verified Petition ¶
71.) Snover sits within the Constellation Group’s onshore drilling operation segment. It serves
as the owner of three Onshore Drilling Rigs (the QG-V, the QG-VIII and the QG-IX). (FRFOF ¶
81.) The Court therefore finds that Snover’s primary assets are in Brazil.
Snover’s sole director is Michael Pearson, a citizen of the United Kingdom, who resides
in the Cayman Islands. (Stipulation ¶ 2.) The record contains no evidence that any of Snover’s
decisions are made from Luxembourg. (FRFOF at 42 n.29.) Snover’s active Onshore Rig is
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 42 of 91

43
operated by, and its inactive Onshore Rigs are maintained by, Debtor Petróleo Constellation
through the Group’s operational management team located in Brazil. (Id. ¶ 83.) The Court
therefore finds that Snover’s day-to-day management, like that of other drillship owning entities
is in Brazil. Snover’s senior management is best described as the senior executive team of the
Constellation Group, which is located in both London and Brazil. Cumulatively, given that this
entity is a drillship owner and makes use of predominately Brazilian employees, daily
management, and given that most of the Constellation Group’s executive management team is
located in Brazil, the Court finds that Snover’s senior management is best described as located in
Brazil.
All of Snover’s onshore drilling rigs are located in Brazil. (Id. ¶ 84.) As in its offshore
operational segment, the Constellation Group charters its onshore drilling rigs to oil and gas
customers and provides corresponding operating services. (Id. ¶ 84.) Snover is a fully integrated
participant in the Constellation Group’s onshore drilling operations—operations that take place
primarily in Brazil, utilize Brazilian employees, and are accordingly subject to certain Brazilian
legal and regulatory regimes. (Id. ¶ 84.) Its assets, consisting of onshore drilling rigs, are all
located in Brazil, and its revenues ultimately derive from operations with primarily Brazilian
customers under the customer contracts which historically have been primarily governed by
Brazilian law. (Id. ¶ 84.)
Snover is a guarantor of the 2024 Notes. (Stipulation ¶ 10.) The indenture trustees of the
2024 Notes are located in New York and there is no evidence in the record regarding the location
of the beneficial holders of the 2024 Notes. (FRFOF ¶ 45.) The location of the majority of
Snover’s creditors is therefore not strong evidence in favor of any particular COMI for Snover.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 43 of 91

44
As a guarantor of the 2024 Notes, Snover’s creditors were advised that their investment
was essentially an investment in Brazil and were expressly cautioned that insolvency
proceedings could take place in Brazil due to the strong ties to Brazil disclosed in the various
offering memoranda. (Supplemental Exchange Offer Memorandum at 21 (stating that the
jurisdiction of insolvency proceedings could be in Brazil); see also Original Exchange Offer
Memorandum at 20 (“We are a market leading provider of offshore oil and gas contract drilling
and FPSO services in Brazil.”).)
In their appointment with respect to Snover, the JPLs speak for the interests of its
collective creditors, and have expressed support for the Brazilian RJ Proceeding and for a finding
of COMI in Brazil for each of these Debtors. (JPL Statement in Support ¶ 2.) Given that the 2024
notes offering memoranda heavily emphasize Brazil as the location of the Constellation Group’s
rigs and daily operations and given that the JPLs support a COMI in Brazil for Snover, the Court
finds that creditor expectations and interests weigh in favor of a COMI in Brazil.
8. 	Arazi
Arazi is not discussed at this time. The Brazilian Court of Appeals determined that this
company should be removed from the Brazilian RJ Proceeding, thus no consideration by this
Court is necessary.
9. 	Petróleo Constellation
Petróleo Constellation is an entity organized under the laws of Brazil with its registered
office at the Rio Office in Rio de Janeiro, Brazil. (Verified Petition ¶ 70.) No objections were
filed to the recognition of the Brazilian RJ Proceeding for Petróleo Constellation, and Alperton
does not object to foreign main recognition in respect of Petróleo Constellation. (Hr'g Tr. at
95:13-17.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 44 of 91

45
Petróleo Constellation participates in all three of the Constellation Group’s business
segments—onshore, offshore, and FPSO investments. (Verified Petition ¶¶ 15, 17, 18.) It is the
owner of six of the nine Onshore Drilling Rigs, the operator of all of the offshore drilling rigs
and also provides a limited number of employees to the JV FPSO Units. (Id.) It employs the
majority of the Constellation Group’s employees and serves as the counterparty on the largely
Brazilian law-governed Customer Service Agreements for the offshore drilling rigs. (Id. ¶ 70.)
It owns several of the Constellation Group’s Onshore Drilling Rigs and in most cases has
historically served as the operator for the Constellation Group’s onshore drilling rigs. (Id.)
Petróleo Constellation is not a guarantor of any indebtedness for borrowed money of
other entities of the Constellation Group. (Stipulation ¶ 9.)
10. 	Constellation Overseas
Constellation Overseas is incorporated in the British Virgin Islands and has its registered
office in the BVI. (Verified Petition ¶¶ 75, 76.) Constellation Overseas is the direct owner of
100% of the equity of Lone Star, Gold Star, Olinda Star, Snover and Alpha Star and is an
indirect wholly owned subsidiary of Parent. (Id. ¶ 37.) The sole director of Constellation
Overseas is Michael Pearson, who resides in the Cayman Islands and is a citizen of the United
Kingdom. (Stipulation ¶ 2.)
Constellation Overseas is the Chapter 15 Debtor in the dispute with Alperton. Alperton
and Constellation Overseas entered into a joint venture to build two ultra-deepwater drillships.
They established two special purpose offshore holding companies organized under the laws of
the BVI: Amaralina Star Ltd. and Laguna Star Ltd. Constellation Overseas’ relationship with
Alperton is discussed more fully above, in sections I.B.2 and I.C of this opinion.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 45 of 91

46
Constellation Overseas is either the primary obligor or the guarantor for each category of
Prepetition Debt set forth in the Verified Petition. (Verified Petition ¶¶ 20- 21; Stipulation ¶¶
10-11.) Parent/Constellation is a guarantor of the obligations of Constellation Overseas under
the Bradesco Working Capital Facilities. (Stipulation ¶ 8.)
III. 	DISCUSSION
A. The Debtors Satisfy Section 109(a) and Venue Is Proper in this District
Foreign debtors seeking relief under chapter 15 must satisfy the debtor eligibility
requirements set forth in section 109(a) of the Bankruptcy Code. See In re Ocean Rig UDW
Inc., 570 B.R. at 698 (citing Drawbridge Special Opportunities Fund
LP v. Barnet (In re Barnet), 737 F.3d 238, 247-51 (2d Cir. 2013)). Section 109(a) provides that
“only a person that resides or has a domicile, a place of business or property in the United States,
or a municipality, may be a debtor” under the Bankruptcy Code. 11 U.S.C. § 109(a). Courts in
this Circuit have held that section 109(a) can be satisfied by bank accounts in the United States,
including by an undrawn retainer. See, e.g., In re U.S. Steel Can. Inc., 571 B.R. 600, 610 (Bankr.
S.D.N.Y. 2017) (“Some courts, including this one, have held that an undrawn retainer in a
United States bank account qualifies as property in satisfaction of section 109(a).”). This Court
has previously held that a debtor’s contract rights, including rights pursuant to debt that contains
a New York governing law and forum selection clause, constitute intangible property of the
debtor in New York for purposes of section 109(a). See, e.g., In re Berau Capital Res. PTE Ltd.,
540 B.R. 80, 83-84 (Bankr. S.D.N.Y. 2015) (“Contracts create property rights for the parties to
the contract. A debtor’s contract rights are intangible property of the debtor. . . . The Court
concludes that the presence of the New York choice of law and forum selection clauses . . .
satisfies the section 109(a) ‘property in the United States’ eligibility requirement”) (internal
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 46 of 91

47
citations omitted); see also In re Cell C Proprietary Ltd., 571 B.R. 542, 552 (Bankr. S.D.N.Y.
2017) (finding that a debtor’s issuance of notes governed by New York law and containing a
New York forum selection clause as an “independently sufficient bas[is] for jurisdiction”)
(internal quotations omitted); In re Inversora Eléctrica de Buenos Aires S.A., 560 B.R. 650, 655
(Bankr. S.D.N.Y. 2016) (“[D]ollar-denominated debt subject to New York governing law and a
New York forum selection clause is independently sufficient to form the basis for jurisdiction.”)
(citation omitted).
Each of the Chapter 15 Debtors has property in the United States. (Hr’g Tr. 42:25, 43:1-
3.) All of the principal documents setting forth Parent/Constellation’s prepetition debt
obligations are governed by New York law and generally contemplate New York as a venue for
disputes. Second, each of the Chapter 15 Debtors owns $1,000 cash in U.S. bank accounts
principally located in Manhattan, New York. (FRFOF ¶ 107.) Together, this property
constitutes the principal U.S. assets of each of the Chapter 15 Debtors, in satisfaction of section
109(a). Additionally, because of the location of these accounts, venue is also proper pursuant to
section 1410(1) of title 28 of the United States Code.
B. The Debtors Satisfy the Recognition Requirements Contained in Sections
1517(a)(2) & 1517(a)(3)
Section 1517(a) provides the remaining requirements for the recognition of a foreign
proceeding under chapter 15. In re Ocean Rig UDW Inc., 570 B.R. at 698. Subject to the public
policy exception contained in section 1506, a foreign proceeding must be recognized if the
following requirements are met:
(1) such foreign proceeding for which recognition is sought is a
foreign main proceeding or foreign nonmain proceeding within the
meaning of section 1502;
(2) the foreign representative applying for recognition is a person or
body; and
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 47 of 91

48
(3) the petition meets the requirements of section 1515.
11 U.S.C. § 1517(a); see also In re Ocean Rig UDW Inc., 570 B.R. at 698–99.
Therefore, recognition of the foreign proceeding is statutorily mandated if the three
requirements of section 1517(a) are met and no exception applies. See In re Millard, 501 B.R.
644, 651 (Bankr. S.D.N.Y. 2013). The first of section 1517(a)’s three factors requires that the
Court determine that a proceeding is either foreign main proceeding or a foreign nonmain
proceeding before it can recognize the proceeding. 11 U.S.C. § 1517(a). That determination is
the more complex issue which will be further discussed below. The other two requirements of
section 1517 are more straightforward on these facts and are both met.
1. 	The Foreign Representative Meets 1517(a)(2)’s Requirements
A chapter 15 case is properly commenced by the filing of a petition for recognition by a
“foreign representative.” See 11 U.S.C. §§ 1504, 1515(a). The Bankruptcy Code defines a
“foreign representative” as “a person or body, including a person or body appointed on an
interim basis, authorized in a foreign proceeding to administer the reorganization or liquidation
of the debtor’s assets or affairs or to act as a representative of such foreign proceeding.” 11
U.S.C. § 101(24). The Petitioner is a “person” as defined under 11 U.S.C. § 101(41) and,
pursuant to the resolutions authorizing the commencement of the RJ and the appointment of the
Foreign Representative, which are located in Exhibit D to the Verified Petition, is authorized to
commence a Brazilian RJ Proceeding and a Chapter 15 Case on behalf of each of the Debtors
and to take all necessary actions as the Foreign Representative. (See “Resolutions,” ECF Doc. #
7-4.) Therefore, the Petitioner is a proper “foreign representative” within the meaning of section
101(24) with respect to each of the Chapter 15 Debtors, and thus section 1517(a)(2) is satisfied.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 48 of 91

49
2. 	The Petition Meets the Additional Requirements of Section 1515
These Chapter 15 Cases were properly commenced with respect to each of the Chapter 15
Debtors in accordance with sections 1504, 1509(a) and 1515. The Verified Petition was filed
pursuant to section 1515(a) and included all disclosures and documents required by sections
1515(b) and (c).
The Brazilian RJ Proceeding is a “foreign proceeding” as set forth in 1517(a)(1) of the
Bankruptcy Code. Section 101(23) defines a “foreign proceeding” as (1) a collective judicial or
administrative proceeding under a law relating to insolvency or adjustment of debt, (2) pending
in a foreign country, (3) in which the assets and affairs of the debtor are subject to control or
supervision of a foreign court, and (4) for the purpose of reorganization or liquidation. 11 U.S.C.
§ 101(23). Courts in this Circuit have long agreed that the Brazilian RJ process satisfies these
standards. See, e.g., In re Oi S.A., Case No. 16-11791 (SHL), ECF Doc. # 38 (Bankr. S.D.N.Y.
July 22, 2016); In re OAS S.A., 533 B.R. 83, 83 (Bankr. S.D.N.Y. 2015); In re Aralco S.A.
Industria e Comercio, et al., No. 15-10419 (REG), ECF Doc. # 22 (Bankr. S.D.N.Y. Apr. 21,
2015).
C. Recognition Under Chapter 15
In order to grant recognition, the Court must first find that the Brazilian RJ Proceeding
constitutes either a main or nonmain proceeding with respect to each Chapter 15 Debtor. See,
e.g., In re Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., 374 B.R.
122, 126-27 (Bankr. S.D.N.Y. 2007) (hereinafter Bear Stearns I), aff’d, 389 B.R. 325 (S.D.N.Y.
2008) (hereinafter Bear Stearns II) (“[T]he recognition must be coded as either main or
nonmain.”). When a debtor seeks recognition of a foreign proceeding, the Court may (i)
recognize the proceeding as a foreign main proceeding, (ii) recognize the proceeding as a foreign
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 49 of 91

50
nonmain proceeding, or (iii) refuse recognition. See id. (refusing to recognize foreign
proceedings as main or nonmain proceedings since the debtors did not meet the nonmain
proceeding requirement of having an “establishment” in the location of the proceeding).
Courts determine if a proceeding is main or nonmain using section 1502’s definitions of
each term. Section 1502 defines a “foreign main proceeding” as a “foreign proceeding pending
in the country where the debtor has the center of its main interests.” 11 U.S.C. § 1502(4). A
foreign nonmain proceeding is defined as a “foreign proceeding, other than a foreign main
proceeding, pending in a country where the debtor has an establishment.” 11 U.S.C. § 1502(5)
(emphasis added). Establishment is defined in Chapter 15 as “any place of operations where the
debtor carries out a nontransitory economic activity.” 11 U.S.C. § 1502(2).27
If a proceeding does not qualify as a main or nonmain proceeding, it cannot be
recognized under chapter 15. The Bear Stearns court explained:
[T]he process of recognition of a foreign proceeding is a simple
single step process incorporating the definitions in sections 1502
and 101(23) and (24) to determine recognition as either a main or
nonmain 	proceeding 	or 	nonrecognition. 	See 	Jay 	Lawrence
Westbrook, Locating the Eye of the Financial Storm, 32 B ROOK . J.
I NT 'L L. 3, 6 (2007 publication pending) hereinafter (“Westbrook
Article”) (“The Model Law grants great discretion as to specific
relief, but imposes a fairly rigid procedural structure for recognition
of foreign proceedings.”)
Bear Stearns I, 374 B.R. at 126; see In re Iida, 377 B.R. 243, 253–54 (9th Cir. BAP 2007); see
also Halo Creative & Design Ltd. v. Comptoir Des Indes Inc., No. 14 C 8196, 2018 WL
27 	The UNCITRAL “Guide to Enactment” provides a slightly different definition of establishment. Article
2(f) explains that “’Establishment’ means any place of operations where the debtor carries out a non-transitory
economic activity with human means and goods or services.”
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 50 of 91

51
4742066, at *2 (N.D. Ill. Oct. 2, 2018); Reserve Intern. Liquidity Fund Lt. v. Caxton Intern. Ltd.,
2010 WL 1779282, at *5 (S.D.N.Y. 2010).
The Court in In re Oi Brasil Holdings further explained that the recognition decision is
one of the few pieces of the chapter 15 process in which courts are not to be guided by the
general principles of comity, since the text of the statute “provides the standard for a court’s
determination” and therefore “comity does not enter the equation.” In re Oi Brasil Holdings
Cooperatief U.A., 578 B.R. 169, 213 (Bankr. S.D.N.Y. 2017), reconsideration denied, 582 B.R.
358 (Bankr. S.D.N.Y. 2018). The Oi court explained:
In the case of recognition under Chapter 15, “[b]oth the plain
language and legislative history of Chapter 15 . . . requires [a
bankruptcy court to make] a factual determination with respect to
recognition before principles of comity come into play.” In re Bear
Stearns, 389 B.R. at 334. So while comity governs recognition of a
foreign judgment (see Rapture Shipping, 350 F.Supp.2d at 373), it
does not govern the initial recognition of a foreign proceeding under
Chapter 15. Recognition of a proceeding requires the application of
“objective criteria,” and it is only post-recognition relief which
“turns on subjective factors that embody principles of comity.” In
re Atlas Shipping, 404 B.R. at 738 (quoting In re Bear Stearns, 389
B.R. at 333 (citing 11 U.S.C. §§ 1507, 1517, 1521, 1525; Model
Law Art. 7, 17, 21, 25)); see also In re Ran, 390 B.R. 257, 292
(Bankr. S.D. Tex. 2008) (“By arguing comity without satisfying the
conditions for recognition, [the foreign trustee] urges this Court to
ignore the statutory requirements of 11 U.S.C. § 1517 . . . comity is
not an element of recognition; it is rather, a consideration once
recognition is granted.”).
Id. at 214.
However, once the decision to grant recognition is made, principles of comity and the
provisions of chapter 15 can provide substantially similar relief to a debtor—whether a
proceeding is recognized as main or nonmain. This Court repeatedly emphasized during the
Recognition Hearing that there may be no statutory and practical effects of distinguishing
recognition as a foreign main proceeding, as opposed recognition as a foreign nonmain
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 51 of 91

52
proceeding. Indeed, a foreign nonmain proceeding can be granted nearly identical relief as the
relief provided to a main proceeding. The SPhinX Court explained:
Under either approach, the Court would be able to grant the [foreign
representatives] the same significant relief upon a proper showing,
given the Court’s view that Congress separated the concept of
“recognition” under Bankruptcy Code section 1517(a) from the
concept of “recognition as a foreign nonmain proceeding” under
section 1517(b)(2). 	(Indeed, as noted above, except for the
applicability of the automatic stay, the potential relief available to
the [foreign representatives] under chapter 15 in almost all respects
does not depend on whether the Cayman Islands proceedings are
recognized as “main” or “nonmain.”)
In re SPhinX, Ltd., 351 B.R. 103, 122 (Bankr. S.D.N.Y. 2006), aff’d, 371 B.R. 10 (S.D.N.Y.
2007).
As previously noted, however, further discretionary relief beyond the decision of the
form of recognition of the foreign proceeding for each Chapter 15 Debtor is a separate
determination based on different factors and is not the main subject of this opinion. This opinion
solely seeks to establish the appropriate form of recognition (e.g., main or nonmain) for each
Chapter 15 Debtor as required by chapter 15. Since Brazil has not adopted the Model Law, the
fact that Brazil recognizes the eligibility of particular debtors to reorganize under Brazil law does
not control the COMI determination here. In re Oi Brasil, 578 B.R. at 216 (explaining that no
issues of deference or comity arise in countries that have not adopted the Model Law, including
Brazil). On the other hand, if the Brazil court dismisses a debtor from the Brazilian RJ
Proceeding, as has now occurred, it does preclude a decision by this Court that the Brazilian RJ
Proceeding of a dismissed debtor is either a foreign main or nonmain proceeding.
D. Recognition as a Foreign Main Proceeding
While the statute provides that a foreign main proceeding is one where the debtor has its
COMI, the statute does not further define the term COMI. See 11 U.S.C. §§ 1501–1532. There
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 52 of 91

53
is a rebuttable presumption that COMI is where the debtor has its “registered office.” 11 U.S.C.
§ 1516(c) (“In the absence of evidence to the contrary, the debtor’s registered office . . . is
presumed to be the center of the debtor’s main interests.”). However, the COMI presumption is
rebuttable where other factors suggest that the true COMI of a debtor lies elsewhere. See, e.g., In
re Bear Stearns II, 389 B.R. at 335 (“[S]ection 1516(c) creates no more than a rebuttable
evidentiary presumption, which may be rebutted notwithstanding a lack of party opposition.”).
1. The SPhinX Factors
Courts in this District have developed a widely adopted list of factors for determining
COMI. In re Fairfield Sentry Ltd., 714 F.3d at 137 (referring to and citing the factors from In re
SPhinX, Ltd., 351 B.R. at 117). These factors, enumerated below (hereinafter, “SPhinX
Factors”), are not to be applied mechanically and are nonexclusive. In fact, a consideration of
the factors is neither required nor dispositive. Id. The factors are, however, helpful. The
SPhinX Court explained:
Various factors, singly or combined, could be relevant to such a
[COMI] determination: [1] the location of the debtor's headquarters;
[2] the location of those who actually manage the debtor (which,
conceivably could be the headquarters of a holding company); [3]
the location of the debtor’s primary assets; [4] the location of the
majority of the debtor’s creditors or of a majority of the creditors
who would be affected by the case; [5] and/or the jurisdiction whose
law would apply to most disputes.
In re SPhinX, Ltd., 351 B.R. at 117.
When determining the “location of those who actually manage the debtor,” courts
consider more than the location of the board of directors of the debtor in isolation, and their
analysis of the location of management is somewhat flexible to reflect the realities of the
management of a particular business. For example,
The headquarters of a corporate entity is more than the location of
its board of directors. 	The term headquarters, or head office,
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 53 of 91

54
contemplates the place where the primary management of an
entity’s business is undertaken. Management of a corporate entity
includes all relevant business functions, such as the financial,
administrative, marketing, information technology, investment, and
legal functions. Other functions may be relevant depending on the
nature of the debtor's business. Here, because [the debtor] operated
as an insurance company, actuarial tasks, underwriting, and claims
adjustment should be considered.
In re British Am. Ins. Co. Ltd., 425 B.R. 884, 911 (Bankr. S.D. Fla. 2010).
2. International Interpretations
In addition to the SPhinX Factors, the Court also considers foreign case law interpreting
identical provisions of the Model Law when interpreting chapter 15’s provisions. Because each
section within chapter 15 is based on a corresponding article in the Model Law, “if a textual
provision of Chapter 15 is unclear or ambiguous, the Court may then consider the Model Law
and foreign interpretations of it as part of its interpretive task.” In re OAS S.A., 533 B.R. 83, 92
(Bankr. S.D.N.Y. 2015) (internal quotations omitted) (quoting O’Sullivan v. Loy (In re Loy), 432
B.R. 551, 560 (E.D. Va. 2010)). The Court also considers the UNCITRAL Model Law on
Cross-Border Insolvency with Guide to Enactment and Interpretation (2013) (“Guide to
Enactment”) when interpreting chapter 15. In re OAS S.A., 533 B.R. at 92; see H.R. Rep. No.
109–31, at 105 (2005); Leif M. Clark, Ancillary & Other Cross-Border Insolvency Cases Under
Chapter 15 of the Bankruptcy Code § 3[1][a][i], at 17 (2008). As this Court stated in Ocean Rig,
because section 1508 of the Bankruptcy Code directs a court interpreting chapter 15 to “consider
its international origin, and the need to promote application of this chapter that is consistent with
the application of similar statutes adopted by foreign jurisdictions,” 11 U.S.C. § 1508, it is
therefore appropriate for U.S. bankruptcy courts to consider interpretations from other
international jurisdictions that have adopted the Model Law. In re Ocean Rig, 570 B.R. at 702
n.6; see also In re Fairfield Sentry, 714 F.3d at 136 (holding that international sources may be
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 54 of 91

55
considered to the extent they assist in “carry[ing] out the congressional purpose of achieving
international uniformity in cross-border insolvency proceedings”).
3. Third Party Expectations
Additionally, because there is no statutory definition of COMI, courts have some latitude
to consider the factors that may be relevant, given the facts in a particular case. In re Creative
Fin., Ltd. (In Liquidation), 543 B.R. 498, 517 (Bankr. S.D.N.Y. 2016); see also In re Fairfield
Sentry Ltd., 714 F.3d at 137 (“The absence of a statutory definition for a term that is not self-
defining signifies that the text is open-ended, and invites development by courts, depending on
facts presented, without prescription or limitation.”).
Beyond the SPhinX Factors, the Second Circuit and other courts have examined as an
additional relevant factor whether there exists any objective evidence that could provide
interested parties with notice that a debtor’s COMI was in a particular jurisdiction other than the
place of its registered office. See In re Fairfield Sentry, 714 F.3d at 130 (“[T]he relevant
principle . . . is that the COMI lies where the debtor conducts its regular business, so that the
place is ascertainable by third parties . . . .”). As the Second Circuit explained, by examining
factors “in the public domain,” courts are readily able to determine whether a debtor’s COMI is
in fact “regular and ascertainable [and] not easily subject to tactical removal.” See In re
Fairfield Sentry, 714 F.3d at 136-37; see also Bear Stearns I, 374 B.R. at 129-30 (looking at
whether the proposed COMI was ascertainable by third parties as part of its COMI analysis).
The Second Circuit’s focus on readily ascertainable evidence of COMI derives from the
regulation adopting the European Union Convention on Insolvency Proceedings, where the
COMI concept (which corresponds to that of the Model Law) is elaborated upon as “the place
where the debtor conducts the administration of his interests on a regular basis and is therefore
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 55 of 91

56
ascertainable by third parties.” In re Fairfield Sentry, 714 F.3d at 136 (citing the Council Reg.
(EC) No. 1346/2000 of May 29, 2000 on Insolvency Proceedings).
4. Expectations of Creditors
Courts in the Second Circuit also look to the expectations of creditors with regard to the
location of a debtor’s COMI. For example, “[c]reditor expectations can be evaluated through
examination of the public documents and information available to guide creditor understanding
of the nature and risks of their investments.” In re Oi Brasil Holdings Cooperatief U.A., 578
B.R. at 228. In practice, the evaluation of creditor expectations has focused on reviewing
disclosures in offering memoranda and indentures. See id. at 228-32 (reviewing offering
memorandum to establish noteholder expectations as part of a COMI analysis); In re OAS S.A.,
533 B.R. at 101-03 (same); In re Millennium Glob. Emerging Credit Master Fund Ltd., 474 B.R.
88, 93-4 (S.D.N.Y. 2012) (same); In re Suntech Power Holdings Co., Ltd., 520 B.R. 399, 418
(Bankr. S.D.N.Y. 2014) (considering terms of indenture to establish creditor expectations
regarding likely location of a restructuring as part of a COMI analysis). The SPhinX Court
explained:
[T]he flexibility inherent in chapter 15 strongly suggests, however,
that the Court should not apply such factors mechanically. Instead,
they should be viewed in light of chapter 15’s emphasis on
protecting the reasonable interests of parties in interest pursuant to
fair procedures and the maximization of the debtor’s value. Because
their money is ultimately at stake, one generally should defer,
therefore, to the creditors’ acquiescence in or support of a proposed
COMI. It is reasonable to assume that the debtor and its creditors
(and shareholders, if they have an economic stake in the proceeding)
can, absent an improper purpose, best determine how to maximize
the efficiency of a liquidation or reorganization and, ultimately, the
value of the debtor, assuming also, of course, that chapter 15
requires the court to protect the legitimate interests of dissenters
(even to the extent of enabling the modification of a recognition
order under Bankruptcy Code section 1517(d)), particularly where
other objective factors point to a different COMI. Relatedly, if the
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 56 of 91

57
parties in interest are in a legitimate dispute over the debtor’s COMI,
it is probably safe to assume that promoting cooperation among
courts and the parties will play a greater role than artificially
choosing one proceeding as a “primary” proceeding. At least this is
what the Court takes away from the stated objectives and structure
of the statute.
In re SPhinX, Ltd., 351 B.R. at 117–18.
The court in In re Chiang, 437 B.R. 397 (Bankr. C.D. Cal. 2010), explained, that “the
location of the COMI is an objective determination based on the viewpoint of third parties
(usually creditors).” Id. at 403. The OAS Court found that notice to creditors of “Risk Factors”
contained within offering memoranda of a debtor’s notes were particularly important. In re OAS
S.A., 533 B.R. at 102–03. The Court explained:
[T]he “Risk Factors” that all note purchasers were warned to
“carefully consider” before deciding to purchase the notes described
the risks associated with the businesses of the OAS Group, not OAS
Investments, and included a separate discussion focusing on the
special risks relating to investments that could be affected by the
Brazilian economy and Brazilian government actions. 	Potential
purchasers were also warned that if OAS and its subsidiaries could
not pay their indebtedness, including the obligations under the
guarantees, they might become subject to bankruptcy proceedings
in Brazil, and Brazilian laws might be less favorable to creditors
compared to the laws of the United States or other jurisdictions. In
contrast, the offering memoranda do not discuss the risks of
operating in Austria. 	The only risk factor that mentioned Austria
stated that Austria would not enforce U.S. judgments, the U.S.
securities laws or awards of punitive damages.
Id. (internal citations omitted).
The OAS Court concluded that the creditors would have understood that they were
investing in a Brazilian based business, even though (i) the offering memoranda provided that
their rights were governed by New York law and they consented to jurisdiction and service of
process in New York and (ii) the creditors expected to receive payment from cash generated by
the operations of the group and in the event of default were only warned that they “might
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 57 of 91

58
ultimately have to enforce their rights in a Brazilian bankruptcy proceeding” as opposed to an
Austrian proceeding, where the holding company was incorporated. Id. at 103. Despite the
foreign debtor’s Austrian incorporation, the OAS Court found that “OAS Investments’ place of
incorporation, or for that matter its very existence, was immaterial to their decision to purchase
their notes.” Id. Ultimately, the court found that the creditors’ expectation of COMI should
weigh in favor of a Brazilian COMI where “OAS Investments had no separate, ascertainable
presence in Austria; it was part of, and inseparable from, the OAS Group located in Brazil.
Finally, the 2019 Noteholders had no legitimate expectation that the Austrian courts would play
any role in the determination or payment of their claims.” Id.
5. PPB or Nerve Center Analysis
Additionally, some courts have employed the concept of “principal place of business” to
guide their COMI analysis and, accordingly, have applied the Supreme Court’s definition of that
concept, which looks at a corporation’s “nerve center,” i.e., “where a corporation’s officers
direct, control, and coordinate the corporation’s activities.” See In re Fairfield Sentry Ltd., 714
F. 3d at 138 n.10 (emphasis added) (citing Hertz Corp. v. Friend, 130 S.Ct. 1181, 1192 (2010)).
The Second Circuit clarified in Fairfield Sentry that given Congress’s choice to use “COMI”
instead of “principal place of business” in chapter 15, the “nerve center” concept does not
control, “[b]ut to the extent that the concepts are similar, a court may certainly consider a
debtor’s ‘nerve center,’ including from where the debtor’s activities are directed and controlled,
in determining a debtor’s COMI.” See id. at 138.
The “nerve center” analysis, like most other factors in the COMI analysis, is not at all a
straightforward standard when applied to most international conglomerates. However, it can
provide a helpful reminder that courts should not perfunctorily rely upon the place of
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 58 of 91

59
incorporation or location of board meetings to establish the corporation’s ultimate COMI. See,
e.g., In re OAS S.A., 533 B.R. at 102 (finding Brazil as the nerve center where “[t]here is no
evidence that its Board of Directors ever convened a meeting except to pass the resolution
appointing Tavares as its foreign representative, and that resolution was executed by its Brazilian
directors in Brazil.”).
6. 	Additional Considerations
There are circumstances that make the COMI analysis more complicated with respect to
certain of the Chapter 15 Debtors. For example, in In re OAS S.A., the court noted that “the
COMI analysis when applied to a special purpose financing vehicle proves less straightforward
than the typical case.” Id. at 101. Additionally, in In re Ocean Rig UDW Inc., this Court
discussed the COMI of another group of international drilling rigs and explained that “the
Foreign Debtors are holding companies of the Group and conduct their business throughout the
world, principally on the high seas. Accordingly, the nature of the Group’s business and the
mobility of their assets complicate the COMI analysis.” In re Ocean Rig UDW Inc., 570 B.R. at
704. Also discussed by the Court in Ocean Rig are the possible complications that arise when a
group of debtors have shifted their COMI over time. Id.
While the above complications are all present in the analysis before the Court, it is
nonetheless true that every debtor has one and only one COMI. See In re Millennium Glob.
Emerging Credit Master Fund Ltd., 458 B.R. 63, 79 (Bankr. S.D.N.Y. 2011) (“[E]very entity has
a center of main interests.”); In re Chiang, 437 B.R. at 403 (“[A] debtor may not have more than
one COMI. . . . In addition, a debtor must have a COMI and it must be in a specific country.”).
E. Recognition as a Foreign Nonmain Proceeding
An alternative form of recognition is recognition as a foreign nonmain proceeding. To be
recognized as a nonmain proceeding, the foreign debtor must establish a degree of stable
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 59 of 91

60
connections with the jurisdiction to constitute a nontransitory “establishment.” 11 U.S.C. §
1502(2). An article in the Norton Journal of Bankruptcy Law and Practice summarizes:
Before Bear Stearns, it seems fair to say that many practitioners
believed—based on section 1515—that by making these two
showings, the statutory requirements for commencing a valid and
proper Chapter 15 proceeding had been met. Bear Stearns revealed,
however, that when a foreign debtor commences a proceeding in a
jurisdiction where it has no real “presence”—i.e., no nontransitory
business activity—the foreign proceeding will not be recognized
under Chapter 15, either as a “main” or “nonmain” proceeding. The
“establishment” requirement for “nonmain” status requires, as a
prerequisite for any relief under Chapter 15, a base level of
connection between the foreign debtor and the foreign jurisdiction
that prevents a debtor from commencing a case in a jurisdiction
where 	it 	has 	nothing 	more 	than 	a 	mail-drop 	presence.
William H. Schrag, William C. Heuer, and Robert E. Cortes, Cross-Border Insolvencies and
Chapter 15: Recent U.S. Case Law Determining Whether a Foreign Proceeding Is “Main” or
“Nonmain” or Neither, 17 J. BANKR . L. & PRAC. 5 Art. 4 (Aug. 2008).
Thus, on one end of the spectrum, a debtor may have activities so centered in the location
of the foreign proceeding that the location is the debtor’s COMI, and on the other end of the
spectrum, the debtor may be so disconnected from the location of the proceeding that courts
should refuse to recognize it at all. Somewhere between these two extremes are companies that
have sufficient non-transitory business connections with the jurisdiction of the proceeding to
determine that the proceeding is nonmain.
The English judgment in In the Matter of Videology Limited, [2018] EWHC 2186 (Ch)
(Snowden J.), provides a helpful example of a company that falls into this middle category of
recognition as a nonmain proceeding. Justice Snowden was asked to recognize a chapter 11 case
of Videology Ltd. Videology was incorporated and had its registered office in England but was
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 60 of 91

61
part of a larger, international corporate group that was incorporated in Delaware. Videology,
EWHC 2186 (Ch) ¶ 4. The sole director of the parent and Videology was a resident of the
United States, who conducted regular business on behalf of the group of companies from the
United States. A shared “senior executive team” for the group of the companies was also located
in the United States. Nevertheless, the court refused to find a COMI in the United States for
Videology. The court explained:
Taking all of these factors together, I was not persuaded that the
presumption that the COMI of [Videology Ltd.] is located in the
place of its registered office had been displaced. 	In addition to
being the place of its registered office, the UK is where the
[Videology Ltd.’s] trading premises and staff are located, where its
customer and creditor relationships are established, where it
administers its relations with its trade creditors on a day-to-day
basis using those premises and local staff, and where its main assets
(the receivables and cash at bank) are located. All of those factors
will be visible and immediately ascertainable by the customers, and
in particular by the trade creditors, of the Company. 	The UK is
also, 	importantly, 	where 	representations 	were 	made 	to 	the
Company’s main finance creditor that its COMI was situated.
Videology ¶ 72.
Thus, even though the ultimate COMI analysis resulted in a COMI in the UK, shared
aspects of the management of the international corporate group provided enough presence in the
United States to find that the chapter 11 case was a nonmain proceeding.
Moreover, the Videology judgment shows that courts should be wary of using the location
of the senior management of groups of internationally operated companies as evidence of the
COMI of one subsidiary company within the international group. For example, after noting that
the CEO and senior executive team were permanently based in the United States, Justice
Snowden dismissed this evidence as non-persuasive in changing Videology Ltd.’s COMI by
explaining that there was no evidence suggesting that the senior management of Videology Ltd.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 61 of 91

62
were “in fact separately employed by, or only hold their positions within” Videology Ltd.
Videology ¶ 57. Rather, the senior management of the group of companies, like that of the
Constellation Group’s executive team, was apparently responsible for certain high-level business
decisions on behalf of the whole group of companies. This evidence regarding the senior
management was sufficient to establish a nonmain proceeding in the U.S., but insufficient to
establish Videology Ltd.’s COMI in the U.S.
F. Non-Recognition
There are circumstances in which courts applying chapter 15 should refuse to recognize
foreign proceedings, whether as main or nonmain proceedings. For instance, where a foreign
debtor seeking recognition under chapter 15 maintains only what can be described as a “letter
box” company in the location of the foreign proceeding. See, e.g., Bear Stearns I, 374 B.R. at
129-31. The Bear Stearns opinion explains that if the only business done in the jurisdiction
where a proceeding is sought to be recognized consists of “those steps necessary to maintain the
[companies] in good standing as registered . . . companies” in those jurisdictions, this is a close
approximation of a “letterbox” company. Id. at 129 n.8.
However, even in cases of letterbox companies or other cases where the court refuses to
grant any recognition of the foreign proceeding, the foreign representative may still obtain
certain forms of relief from U.S. Courts. Id. at 132. Other forms of relief that the foreign
representative may obtain after the court refuses to recognize a foreign proceeding include (i)
filing a case under Title 11 in coordination with the foreign proceeding and (ii) suing in a court
in the United States to collect or recover a claim which is the property of the debtor. Id. at 132–
33. In this case, it is not clear that each of the Chapter 15 Debtors has its COMI or an
establishment within Brazil.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 62 of 91

63
G. COMI Analysis Applied to Each Chapter 15 Debtor
As the SPhinX court explained, “[o]n the issue of recognition of foreign proceedings as
‘main’ or ‘nonmain,’ the Bankruptcy Code provides considerable but not complete discretion.
351 B.R. at 117. Based on the legal discussion above and the understanding that COMI is a
flexible determination and not a rigid application of factors, the Court will now review the COMI
of Chapter 15 Debtors and in the process consider any COMI-relevant evidence that is available
in the evidentiary record regarding each Chapter 15 Debtor individually, inter alia: (1) the
SPhinX Factors, (2) international interpretations of COMI, (3) the reasonable expectations of
interested third parties, (4) the expectations or support of creditors, and (5) interpretations of a
corporation’s “principal place of business” as the “nerve center” of a corporation. In assessing
these factors, the Court is mindful that a Chapter 15 Debtor’s COMI is determined as of the
filing date of the chapter 15 petition, without regard to the debtor’s historic operational activity.28
See In re Fairfield Sentry Ltd., 714 F. 3d at 137. The ultimate aim of the analysis is to locate the
“real seat” of each of the Chapter 15 Debtors. See Bear Stearns I., 374 B.R. at 130.
Although Alperton recognizes that COMI must be determined on a company-by-
company basis, the crux of its argument for the majority of the Chapter 15 Debtors is that “an
examination of the evidentiary record shows that each International Company is controlled and
managed by Parent from Luxembourg, and as a result, the COMI of each International Company
also lies in Luxembourg, not in Brazil.” (Alperton FOF ¶ 122.) While the Court and all parties
recognize that these entities are highly inter-related, each debtor entity must be considered, rather
than making a single top-down decision on the basis of the COMI of the parent company of the
group. See In re Oi Brasil, 578 B.R. at 206. Additionally, the Court has an independent
28 	The dates used for determining COMI differ under the Model Law (using the date when the foreign
proceeding was filed) and under Chapter 15 (using the date when the Chapter 15 petition was filed).
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 63 of 91

64
obligation to determine COMI before recognizing a foreign proceeding as a foreign main
proceeding. See In re Alpha Fund (Master), 381 B.R. 37, 40 (Bankr. S.D.N.Y. 2008) (“[A] court
engaging in a recognition determination under section 1517 is not bound by parties’ failures to
object; may, if it is so advised, consider any and all relevant facts (including facts not yet
presented); and that the circumstances here make further factual inquiry necessary and
appropriate.”); Bear Stearns I, 374 B.R. at 126 (“[R]ecognition under section 1517 is not to be
rubber stamped by the courts. This Court must make an independent determination as to whether
the foreign proceeding meets the definitional requirements of sections 1502 and 1517 of the
Bankruptcy Code.”).
The evidentiary burden to show where each debtor has its COMI is on the foreign
representative. H. Report No. 109-31, 112-13 (“The ultimate burden as to each element is on the
foreign representative”); see In re Oi Brasil, 578 B.R. at 194 (stating that “the burden rests on the
foreign representative to prove each of the requirements of Section 1517”). The rebuttable
presumption that COMI lies in the place of the registered office “at no time relieves a petitioner
of its burden of proof/risk of non-persuasion” and it imposes “on the party against whom it is
directed the burden of going forward with evidence to rebut or meet the presumption.” Bear
Stearns II., 389 B.R. at 335. The legislative history of chapter 15 further indicates that the
evidentiary burden lies with the foreign representative. Chapter 15 is modeled after the Model
Law, but chapter 15 changed the standard that established the presumption in “the absence of
proof to the contrary,” to a presumption in “the absence of evidence to the contrary.” Id. at 128.
The legislative history of chapter 15 explains that the word “proof” was changed to “evidence”
to make it clearer, using United States terminology, that the foreign representative has the
ultimate burden of showing where each debtor has its COMI. See H. Report No. 109-31, 112-13
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 64 of 91

65
(2005); see also In re Tri-Continental Exchange Ltd., 349 B.R. 627, 635 (Bankr. E.D. Cal.
2006). The evidentiary burden for the foreign representative is the same whether or not there is a
creditor objection. See In re Basis Yield Alpha Fund (Master), 381 B.R. at 40; Bear Stearns I,
374 B.R. at 126.
1. 	Parent/Constellation’s COMI is Luxembourg
Based upon the Court’s foregoing findings of fact related to Parent/Constellation and the
most relevant COMI factors, discussed below, the Court finds that Parent/Constellation’s COMI
is located in Luxembourg.
a. 	The Location of the Debtor’s Headquarters is Luxembourg
The location of Parent/Constellation’s headquarters is Luxembourg, where it is
incorporated, is a tax resident, and has its registered office. (See supra § II.H.1.)
b. 	The Location of those who Actually Manage the Debtor is
Luxembourg
As noted in the discussion section, Parent/Constellation’s board of directors meets in
Luxembourg. (Id.) Parent/Constellation’s board of directors appoints the executives, based in
London and Brazil, who serve the entire Constellation Group. (Id.) Because
Parent/Constellation is ultimately a parent company that exists for the task of high level
management of all subsidiaries, it makes sense that the location from which the board of directors
conducts its activities should weigh more heavily than the daily operational staff’s location—
which is spread between two nations, in any case and therefore would not provide a strong weight
against finding management to be principally located in Luxembourg. Thus, the Court finds that
the location of those who manage Constellation is Luxembourg.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 65 of 91

66
c. 	The Location of the Debtor’s Primary Assets is Brazil
For a holding company, the location of its subsidiaries and the location of their principal
assets is relevant to the COMI analysis. See In re Inversora Electrica de Buenos Aires S.A., 560
B.R. at 656 (recognizing COMI in Argentina where a holding company’s assets were located in
Argentina). As noted in the background section, Parent/Constellation’s physical assets are
primarily located in Brazil. (See supra § II.H.1.)
d. 	The Location of the Majority of the Debtor’s Creditors or of a
Majority of Creditors who would Be Affected by the Case is Neutral
The Court found that the location of most of Parent/Constellation’s creditors is
indeterminate, as a matter of fact. (Id.) Therefore, this factor does not impact the COMI analysis
of Parent/Constellation.
e. 	The Jurisdiction Whose Law Would Apply to Most Disputes is
Luxembourg
As discussed above, an array of international law could apply to Parent/Constellation
since it is the parent of an international group of companies and since all of the debt it issued is
written in English and governed by New York law. (Id.) However, because Parent/Constellation
is a Luxembourg incorporated entity, that depends upon Luxembourg law for its existence and its
corporate operations, the Court found that Luxembourg law should be considered the law that
would apply to most of Parent/Constellation’s disputes. (Id.)
f. 	The Reasonable Expectations of Interested Third Parties and Creditors
is Luxembourg
The Chapter 15 Debtors have stipulated that Parent/Constellation has its “central
administration” in Luxembourg for purposes of Luxembourg tax law. 	(Stipulation ¶ 7.) The
meaning of the phrase “central administration” under Luxembourg tax law is not before the
Court, but the fact that Parent/Constellation takes the position with Luxembourg authorities that
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 66 of 91

67
its “central administration” is in Luxembourg, for tax or any other purpose, is itself readily
ascertainable evidence to third parties of a connection to Luxembourg beyond a letter box.
Additionally, when the Constellation Group makes important decisions, it issues press
releases from its Luxembourg office. These press releases are available to the public on the
Constellation Group’s website and are therefore in the “public domain.” (Alperton FOF ¶ 94.)29
For example, when the Constellation Group announced its restructuring on December 6, 2018, it
issued a press release from Luxembourg. When an issue was identified with the 2017
consolidated financial statements for Parent (encompassing the financial statements for its
subsidiaries, including each of the Chapter 15 Debtors), Parent issued a press release from
Luxembourg notifying users of the financial statements that they should not place reliance on
them. (Id.) Therefore, an interested third party that visits and reads these press releases would
readily ascertain that the Parent/Constellation is headquartered in, and makes key decisions from,
Luxembourg. (See id.) As an extension, it seems reasonable that—at the very least—these press
releases would put interested third parties on notice that Parent/Constellation makes key
decisions from Luxembourg.
In sum, while creditors were notified of the underlying operations of the Constellation
Group as being in Brazil, the offering memoranda clearly express that Parent/Constellation is a
Luxembourg company. Given that Luxembourg was chosen and well publicized to creditors as
the jurisdiction from which ultimate board meetings, tax laws, and corporate laws would take
29 	Since the Recognition Hearing, the Constellation Group’s website appears to have changed. If one visits
the web address discussed by Alperton for the group, qgogconstellation.com, a pop-up box appears notifying users
that the investor relations portion of the website is under construction, but for more information about Constellation,
it directs users to a link to theconstellation.com. The Constellation Group’s main website, which now appears to be
located at theconstellation.com, loads in Portuguese but provides a link to convert the website to English. The
contacts portion of this website provides Brazilian phone numbers. The website details the business of the “the
Constellation” as onshore rigs, offshore rigs, and FPSOs; thus the website now predominately represents the entire
Constellation Group as a Brazilian enterprise group. Its vision statement beings with the vision to “Consolidate the
Company’s leadership position in Brazil.” 	See Constellation, qgogconstellation.com (last visited Apr. 26, 2019.).
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 67 of 91

68
place, the Court found that objective creditors expectations of Parent/Constellation’s COMI
weighs in favor of a Luxembourg COMI. (Supra § II.H.1.)
g. 	The Nerve Center Analysis Weighs in Favor of COMI in Luxembourg
Parent/Constellation’s activities are directed, controlled and coordinated in Luxembourg.
(Id.) Luxembourg therefore meets the criteria for a “principal place of business” set forth by the
Supreme Court in Hertz Corp. See Hertz Corp., 130 S. Ct. at 1193-94. The Court therefore
finds that Parent/Constellation’s nerve center is in Luxembourg.
h. 	Parent/Constellation has Sufficient Ties to Brazil for Foreign Nonmain
Proceeding Recognition
Although Parent/Constellation’s COMI is in Luxembourg, all of its subsidiaries have
substantial and ongoing business connections in Brazil. These non-transitory ties to Brazil are
sufficient to recognize the Brazilian Proceeding as a foreign nonmain proceeding with respect to
Parent/Constellation. Alperton does not argue otherwise.
2. 	Constellation Overseas’ COMI is Brazil
Based upon the Court’s foregoing findings of fact related to Constellation Overseas and
the most relevant COMI factors, discussed below, the Court finds that Contellation Overseas’
COMI is located in Brazil as a matter of law.
a. 	Location of the Debtor’s Incorporation and Registered Office is the
BVI
Constellation Overseas is incorporated in the BVI and has registered office in the BVI.
(Supra § II.H.10.)
b. 	Location of those who Actually Manage the Debtor is Neutral
Constellation Overseas’ sole director (Michael Pearson) is a resident of the Cayman
Islands and a citizen of the United Kingdom. (Stipulation ¶ 2.) It benefits from the day-to-day
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 68 of 91

69
operational management of the Brazilian Offices, which, together with those in the Panama
offices, co-ordinate its operational management activities with the activities of its affiliates.
(FRFOF at 66.)
The Brazilian Offices are of particular importance to the management of Constellation
Overseas, because its role in the Constellation Group—in addition to acting as a holding and
financing company—is to centralize treasury services. (FRFOF ¶ 143.) As holding company of
several Chapter 15 Debtors and an integrated member of the Constellation Group, Constellation
Overseas relies on persons employed by its affiliates, most of whom are Brazilian citizens
working at Brazilian Offices. (Supra § II.B.1(c).) Although the Brazilian office’s functions are
carried out predominately by Petróleo Constellation, this does not fully detract from the Brazilian
office’s inclusion in the COMI consideration for Constellation Overseas or other affiliates. See
In re British Am. Ins. Co., 425 B.R. at 911 (where debtor “outsourced essentially all of its central
management” to a wholly-owned subsidiary in Trinidad, the debtor’s “administrative hub” was
located in Trinidad); see also In re Ocean Rig UDW Inc., 540 B.R. at 697-98 (finding COMI in
Cayman Islands where, inter alia, debtors were managed by a non-debtor affiliate that performed
operations for the debtors in the Cayman Islands).
Because the various forms of Constellation Overseas management are so diffuse—
ranging across a sole director who is a citizen of the UK, day-to-day management in Brazil, and
ultimate legal control of a Parent company incorporated in Luxembourg—this factor does not
strongly indicate any particular COMI.
c. 	The Location of the Debtor’s Primary Assets is Brazil
Constellation Overseas is the sole owner of Lone Star, Gold Star, Olinda Star, Snover,
and Alpha Star. Its direct ownership of assets is therefore the equity in these companies that it
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 69 of 91

70
holds in the BVI. Given its role as a holding company, it has no employees, officers, or
customers of its own, instead its limited functions are to own equity in subsidiaries, guarantee
debt and centralize certain treasury functions to support subsidiaries operating and generating
revenue in Brazil. (FRFOF ¶ 150.) However, for a holding company, the location of its
subsidiaries and the location of their principal assets is relevant to the COMI analysis. See In re
Inversora Electrica de Buenos Aires S.A., 560 B.R. at 656. Through Constellation Overseas’
holdings of the Offshore Rig Owners incorporated in the Cayman Islands and BVI, Constellation
Overseas indirectly owns the Group’s drilling rigs that were principally located in Brazil at the
time of the chapter 15 filing. (Supra § II.B.1(a).) Additionally, the vast majority of the dividends
it receives from its subsidiaries are generated in Brazil. (FRFOF ¶ 150.)
Because the assets held by Constellation Overseas are all of the Constellation Group’s
rigs, which with the exception of Olinda Star are located in Brazil, this factor weighs in favor of
a COMI in Brazil.
d. 	The Location of the Majority of the Debtor’s Creditors or of a
Majority of Creditors who would Be Affected by the Case is Neutral
Constellation Overseas has obligations under the 2024 Notes and is an obligor under the
2019 Notes. (FRFOF ¶ 166.) There is no evidence in the record regarding the location of the
beneficial holders of the 2019 Notes and the 2024 Notes (except one holder of the 2019 Notes
that is a Brazilian national located in New York). (FRFOF ¶ 166.) Thus, the Court draws no
conclusion relevant to a finding of COMI for obligors of this debt.
Constellation Overseas is also an obligor under the Bradesco Working Capital Facility.
(FRFOF ¶ 167.) Bradesco is a local Brazilian bank and the Group’s ongoing unsecured working
capital lender. (FRFOF ¶ 167.) The Bradesco Working Capital Facility was advanced by
Bradesco’s Cayman branch, but originated by principals based in Brazil. (Id.) Bradesco filed a
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 70 of 91

71
support statement which states, inter alia, that it is a “local Brazilian bank.” (“Bradesco Support
Statement,” ECF Doc. # 16 at 2.) Thus, the location of this creditor may either weigh in favor of
a COMI in Brazil or the Cayman Islands.
Constellation Overseas also has obligations under the A/L/B facility. The lenders on the
A/L/B facility are a syndicate of various international financial institutions, none of which are
located in Luxembourg or Brazil.
Finally, Alperton is a contingent, unliquidated creditor of Constellation Overseas. (Supra
§ II.B.2.) Alperton’s principals and beneficial owners are Brazilian nationals and their business
with Constellation Overseas is rooted in serving Brazilian customers and accessing Brazilian
markets. (FRFOF ¶ 168.) Thus, for purposes of this element in the COMI analysis, the potential
creditor Alperton is located in Brazil.
In sum, there is no clear location of a majority of Constellation Overseas’ creditors. This
factor is neutral in the COMI analysis.
e. 	The Jurisdiction Whose Law Would Apply to Most Disputes Weighs
Weakly in Favor of a COMI in BVI
Constellation Overseas has a primary interest in the operational business activities of the
Constellation Group, which are almost exclusively centered in Brazil and, therefore, is greatly
impacted by Brazil’s regulations and laws. (FRFOF ¶ 158.) By virtue of being incorporated in
the BVI, Constellation Overseas is subject to the BVI’s laws, regulations, and jurisdiction,
including with respect to potential corporate disputes. It is also subject to BVI law with respect
to potential tax disputes. (FRFOF ¶ 158.)
New York is the governing law of all of the Prepetition Debt of the Constellation Group.
(Verified Petition ¶ 20; Alperton FOF ¶ 62.) New York law also governs the Shareholders’
Agreement between Alperton and Constellation Overseas. (Alperton FOF ¶ 63.) Alperton’s
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 71 of 91

72
claims against Constellation Overseas to be resolved by the arbitral tribunal are, therefore, New
York law governed claims. 30 (Alperton FOF ¶ 63.)
As an entity that is ultimately owned (though through a non-debtor intermediary) by a
Parent incorporated and acting under the Law of Luxembourg, Constellation Overseas is also
impacted by Luxembourg law. Thus, one could view Constellation Overseas as receiving a
trickle-down effect from Luxembourg law and a bottom-up effect from Brazilian law, but the
company always maintains the direct governance of BVI law. Thus, on balance, this factor
likely loosely weighs in favor of a BVI COMI.
f. 	The Reasonable Expectations of Interested Third Parties Weighs in
Favor of a COMI in Brazil
An important element for each of the BVI incorporated Chapter 15 Debtors is the support
of the JPLs. The JPLs are independent, court-appointed officers who favor recognition of the
Brazilian RJ Proceeding as a foreign main proceeding. (FRFOF ¶ 176.) The JPLs are officers of
the BVI Court whose function is to represent the collective interests of the creditors of each
debtor for which they are appointed by overseeing and protecting their interests in the
restructuring process. In this way, they arguably serve as a collective voice for the creditors of
the BVI debtors. The JPLs Support Statement provided that “It is the understanding of the BVI
JPLs . . . that Brazil is the ‘center of main interests’ or ‘COMI’ of each of the BVI Debtors for
the purposes of U.S. restructuring law.” (JPL Support Statement, ECF Doc. # 31-3 ¶ 2.)
Creditors’ reasonable expectations are a factor in COMI analysis. The Offering
Memoranda are indicia of the Noteholders’ objectively ascertainable expectations. Many
30 	Although the arbitral Tribunal issued the Interim Award aimed at preserving Alperton’s potential 45%
shareholding in the Disputed Companies during the pending arbitration, the ultimate determination of whether
Alperton was wrongfully deprived of its 45% interest in the Disputed Companies has not been reached. The Interim
Award is described as “interim relief . . . pending a final Award in this arbitration . . . .” (Interim Award at 4.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 72 of 91

73
disclosures within the Offering Memoranda would have put Noteholders on notice that their
investment was, in substance, Brazilian-centered. The Offering Memoranda also informed
Noteholders that the vast majority of revenues that would repay their notes were derived in
Brazil from Brazilian operations with Brazilian customers and contracts and operations governed
and regulated by Brazilian laws. (FRFOF ¶ 170.) That said, Noteholders were also aware of the
ultimate reality described in the Notes—that the Constellation Group is a highly integrated group
of companies with its parent in Luxembourg, its main source of revenues in Brazil, and several
of its subsidiaries place of incorporation in the BVI. Thus, Noteholders could have reasonably
foreseen Brazilian, Luxembourg, and BVI proceedings affecting Constellation Overseas.
If anything weighs heavily for Constellation Overseas’ COMI to be located in Brazil, it is
the factor of creditor support. As the SPhinX Court explained, “[b]ecause their money is
ultimately at stake, one generally should defer . . . to the creditors’ acquiescence in or support of
a proposed COMI . . . [they] can . . . best determine how to maximize the efficiency . . . of a
reorganization and ultimately, the value of the debtor.” 351 B.R. at 117. Bradesco and the
Consenting A/L/B Lenders collectively hold over 60% of the Constellation Group’s debts and
Constellation Overseas is an obligor and/or grantor to both the A/L/B Lenders and Bradesco.
These two groups of creditors collectively, therefore, have the most at stake in these proceedings.
Each of them expressed their support of COMI in Brazil. (See Bradesco Support Statement
(“Bradesco’s expectation and understanding is, and always has been, that Constellation
Overseas’ and its Debtor affiliates’ center of main interests is in Brazil.”); “A/L/B Lender
Support Statement,” ECF. Doc. # 8 ¶ 3 (“The A/L/B Lenders have always understood and
operated with the expectation that the center of main interests (‘COMI’) of each Debtor was and
remains located firmly in Brazil.”).) Further, the 2024 Ad Hoc Group—who hold a majority of
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 73 of 91

74
the 2024 Notes—also support the finding of COMI in Brazil for each of the Debtors incorporated
outside of Brazil. (FRFOF ¶ 175.)
Because the offering memoranda of the notes heavily discuss the Constellation Group’s
economic base in Brazil, the BVI JPLs have expressed their support of a Brazilian COMI, and all
creditors other than Alperton have expressed support for Brazil as the COMI of Constellation
Overseas, this factor weighs in favor of a COMI in Brazil.
g. 	The Nerve Center Analysis Weighs in Favor of Brazil
Constellation Overseas is a holding/financing company that centralizes treasury and
financial services for certain companies in the Constellation Group. (FRFOF at 66.) It is a mid-
level holding company that Parent/Constellation fully owns through a non-debtor intermediary.
(Alpterton FOF ¶ 124.) In OAS, the SPV debtor’s parent was the debtor’s sole shareholder and
had the power to “determine the outcome of any action requiring shareholder approval, including
transaction with related parties, acquisitions and dispositions of assets and the timing and
payment of any future dividends.” In re OAS, 533 B.R. at 101-02. In noting that the COMI of
the SPV depended upon the location of the nerve center of the corporate group the SPV served,
the OAS Court held that the SPV debtor’s COMI was with its parent. Id. Here, Constellation
Overseas is an SPV that is controlled and partially managed by its parent (management is
described as partial, since day-to-day operations of the Constellation Group entities takes place
in Brazil and Constellation Overseas’ sole director is not located in Luxembourg). Thus, the
nerve-center test should point towards Luxembourg, as in OAS, since the Parent of this SPV is in
Luxembourg.
Ultimately, determining the COMI of Constellation Overseas is the most difficult of the
Court’s recognition determinations. From the perspective of technical, top-down legal control,
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 74 of 91

75
the Parent/Constellation, which is based in Luxembourg “controls” the company. That said,
from a realistic consideration of the perspective of the true seat of Constellation Overseas, it is
difficult to overlook the fact that its revenues used to pay creditors and the day-to-day
management of those revenue streams come from Brazil. Essentially, the Court is asked, with
respect to Constellation Overseas, to choose between the importance of high-level management
or the location of the management of the generation of actual positive cash flows (as opposed to
debt incursion) for the group of companies. Given the relatively equal pulls of the analysis in
favor of Luxembourg or Brazil, the Court’s determination here essentially makes one of two
conclusions: (1) a determination that senior management should always be considered more
important in similar cases or (2) a determination that when a proper analysis of COMI has been
conducted and it leads to essentially a toss-up between locales as the “ultimate-seat,” the Court
should allow the weight of the relevant factors in evidence to determine the outcome. Because
there appears to be such strong creditor support in favor of a Brazilian COMI and Constellation
Overseas has significant management, interest, and revenue generation in Brazil, the Court finds
that the weight of evidence favors a COMI in Brazil. Although Constellation/Parent indirectly
owns Constellation Overseas and the Court found Constellation/Parent’s COMI to be in
Luxembourg, this location of the parent company’s management should not be a strong enough
factor to sway all of the other factors that point toward Brazilian recognition (particularly when
half of Parent’s Board of Directors are Brazilian citizens) for Constellation Overseas.
Indeed, Alperton seeks to oversimplify the COMI analysis for the Group of companies by
essentially equating the COMI of the ultimate parent as the de-facto COMI for the group. In its
proposed findings of fact, where it argues that all Chapter 15 Debtors other than Petróleo
Constellation have a Luxembourg COMI, Alperton asserts:
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 75 of 91

76
The 	fact 	that 	each 	of 	Constellation 	Overseas, 	the 	Drillship
Subsidiaries and Snover has the same sole director illustrates that
the decision making for these entities is not done at the Drillship
Subsidiary or the Constellation Overseas levels. 	Instead, they are
ultimately wholly owned, controlled and managed by Parent and, as
a result, the COMI of each of these entities also lies with Parent in
Luxembourg.
(Alperton FOF ¶ 128.)
However, this would be fundamentally improper as a governing rule; it is simply untrue
that looking at the location of the board of directors for a group of companies, in isolation, can be
determinative of the COMI of each company within the group. It overlooks the important fact
that board meetings are for most large companies, far less routine or central to management than
the work performed by the executives of a company. It overlooks the fact that 98.7% of the
Constellation Group’s revenue is generated in Brazil, the vast majority of the Group’s 1,200
employees are in Brazil, Brazil law regulates the operation of most of the Group’s physical
assets, most of the strategic day to day operations for the Group take place in Brazil, and more of
Parent/Constellation’s board members reside in Brazil than in Luxembourg. To suggest that the
true COMI of the entire group is in Brazil based on the number and location of board members
of the subsidiaries combined with the fact that the Parent’s COMI is Luxembourg misinterprets
the law. If anything, the case law asks the Court to look at a spectrum of factors—including non-
board management, the location of assets, the expectations of creditors, the desires of creditors,
and the jurisdiction with the greatest interest in the outcome etc. When the Court considers the
spectrum of these factors with respect to Constellation Overseas, Brazil seems to be the real
COMI.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 76 of 91

77
3. 	Alpha Star’s COMI is in Brazil
Based upon the Court’s foregoing findings of fact related to Alpha Star and the most
relevant COMI factors, discussed below, the Court finds that Alpha Star’s COMI is located in
Brazil at this time as a matter of law.
a. 	Location of the Debtor’s Place of Incorporation is the BVI
Alpha Star is incorporated in the BVI. (Supra § II.H.2.)
b. 	The Location of those who Actually Manage the Debtor is Brazil
Alpha Star’s sole director is Michael Pearson, who resides in the Cayman Islands and is a
citizen of the United Kingdom. (Id.)
As discussed above, the Brazilian Offices are of particular importance to the rig-owning
entities insofar as all operation and management of their rigs—their primary assets—are run
from those locations. The Court found that Alpha Star’s operations, including day-to-day
operations are managed by the Brazilian Offices. (Id.) Alpha Star also benefits from the
Constellation Group’s shared management in Brazil that is responsible for its shared financial,
legal, investor relations services and operational co-ordination activities. (Supra § II.B.1(b).)
Petróleo Constellation, the Brazilian incorporated Chapter 15 Debtor, maintains and operates
Alpha Star’s sole asset—the offshore drilling rig. (Supra § II.H.2.) As such, the Court finds that
the location of those who actually manage Alpha Star is Brazil.
c. 	Location of the Debtor’s Primary Assets is in Brazil
Alpha Star’s function is to own an offshore drilling rig, which is presently located in
Brazil and typically operates in Brazilian waters. (Id.) This factor points towards Brazil.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 77 of 91

78
d. 	Location of the Majority of the Debtor’s Creditors or of a Majority of
Creditors who would Be Affected by the Case is Indeterminate
Alpha Star has obligations under the 2024 Notes. There is no evidence in the record
regarding the location of the beneficial owners of the 2024 Notes. (Id.)
e. 	The Jurisdiction Whose Law Would Apply to Most Disputes Weighs
Moderately in Favor of Brazil
The operation of Alpha Star’s Brazilian located assets are subject to Brazilian regulatory
regimes (including contract law, maritime law, employee law, environmental law, and Brazilian
regulatory approvals necessary for the operation of drilling rigs). (Id.)
By virtue of being incorporated in the BVI, Alpha Star is also subject to the BVI’s laws,
regulations, and jurisdiction, including with respect to potential corporate disputes. It is also
subject to BVI law with respect to potential tax disputes. (FRFOF ¶ 158.)
Because operations are more likely to create legal disputes, this factor weighs moderately
in greater favor of a COMI in Brazil.
f. 	Relevant International Interpretations Weigh in Favor of Brazil
As discussed in Videology, a parent company’s management and the fact that a parent’s
board of directors operate the high-level management of a group of companies does not dictate
the COMI of all subsidiaries where other evidence suggests that the subsidiaries’ real operations
take place elsewhere. Like Videology, most of the drill ship corporations within the
Constellation Group have day-to-day management in Brazil, a location of assets in Brazil, and
the group as a whole has a substantial presence in Brazil. As such, Videology reminds, with
respect to all the drillship companies in the group that the location of the management of the
parent holding companies should not be given undue weight. Thus, evidence showing the
majority of the Constellation Group’s employees and day-to-day management in Brazil weigh
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 78 of 91

79
more heavily on the Court’s COMI analysis than evidence regarding Parent/Constellation’s
COMI for drillship owning debtors, such as Alpha Star.
g. 	The Reasonable Expectations of Interested Third Parties Weighs in Favor
of COMI in Brazil
The debt documents for the 2024 Notes for which Alpha Star is a guarantor explain that
operations and customers are located in Brazil. The 2024 Notes documents also explain
potential restructurings in Brazil. (Supra § II.H.2.) Additionally, the JPLs support a finding of
COMI in Brazil. (Id.) Based on these facts, the Court finds that the reasonable expectations of
interested third parties weighs in favor of recognizing Alpha Star’s COMI in Brazil.
h. 	The Nerve Center Analysis Favors a COMI in Brazil
The central coordination of the rigs is particularly important to the nerve center concept
in a business where asset ownership and asset operation are separated, as is the case here. The
location of the sole director of each of these entities in the Cayman Islands is outweighed by the
importance of the day-to-day management in Brazil, particularly where few factors point to the
Cayman Islands and no party in interest (including the JPLs) suggests the Cayman Islands as the
COMI.
The central coordination of the rigs in Brazil is also important as weighed against
Alperton’s suggestion that the COMI of these drillship subsidiary entities should be in
Luxembourg. In addition to arguing that their sole director located in the Cayman Islands
suggests that these entities should have a COMI in Luxembourg, Alperton argues that Oi
supports a finding of COMI in Luxembourg for these entities, because in Oi the court considered
that the larger corporate group was “headquartered and managed from the principal executive
office of Oi in Rio de Janeiro Brazil.” (Alpteron FOF ¶ 129 (citing In re Oi Brasil, 578 B.R. at
227).) However, Alperton’s own quote seems to support a COMI in Brazil for these entities in
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 79 of 91

80
the sense that the Oi court looked to the principal executive office of the group of companies (not
the location of the headquarters). There are no executives of any of the Constellation Group of
companies located in Luxembourg. Rather, all of the executives of the Constellation Group are
either in London or Brazil.31 The weight of the evidence also supports the fact that the day-to-
day operations of the management, the Chief Operational Officer, Chief Commercial Officer,
Chief Legal Officer, and additional staff in charge of operational finances and investor relations
are located in Brazil. The Court finds that the nerve center analysis weighs in favor of a COMI
in Brazil for Alpha Star.
4. 	Lone Star’s COMI is in Brazil
Based upon the Court’s foregoing findings of fact related to Lone Star and the most
relevant COMI factors, discussed below, the Court finds that Lone Star’s COMI is located in
Brazil at this time as a matter of law.
a. Location of the Debtor’s Place of Incorporation is the BVI
Lone Star is incorporated in and subject to the jurisdiction of the BVI. (Supra § II.H.5.)
b. Location of those who Actually Manage the Debtor is Brazil
Lone Star’s sole director is Michael Pearson, who resides in the Cayman Islands and is a
citizen of the United Kingdom. (Id.)
As discussed above, the Brazilian Offices are of particular importance to the rig-owning
entities insofar as all operation and management of their rigs—their primary assets—are run
from those locations. The Court found that Lone Star’s operations, including day-to-day
31 	Alperton notes that members of senior management are appointed from time to time by vote of the Parent’s
board of directors. (Alperton FOF ¶ 49.) However, this is not persuasive that Luxembourg is the true seat of
management of the drillship subsidiaries since: (1) the majority of the board of directors of even the
Parent/Constellation are citizens of Brazil and (2) the facts at the time of filing the Chapter 15 Petitions were that no
executives were located in Luxembourg, while many were located in Brazil.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 80 of 91

81
operations are managed by the Brazilian Offices. (Id.) Lone Star also benefits from the
Constellation Group’s shared management in Brazil that is responsible for its shared financial,
legal, investor relations services and operational co-ordination activities. (Supra § II.B.1(b).)
Petróleo Constellation, the Brazilian incorporated Chapter 15 Debtor, maintains and operates
Lone Star’s sole asset—the offshore drilling rig. (Supra § II.H.5.) As such, the Court finds that
the location of those who actually manage Lone Star is Brazil.
c. 	The Location of the Debtor’s Primary Assets is in Brazil
Lone Star maintains and operates an offshore drilling rig. (FRFOF at 78.). The rig is
located in Brazil.
d. 	The Location of the Majority of the Debtor’s Creditors or of a Majority of
Creditors who would Be Affected by the Case is Indeterminate
Lone Star has obligations under the 2024 Notes. There is no evidence in the record
regarding the location of the beneficial owners of the 2024 Notes. (FRFOF at 79.)
e. 	The Jurisdiction Whose Law Would Apply to Most Disputes Weighs
Moderately in Favor of Brazil
The Operation of its Brazilian located assets are subject to Brazilian regulatory regimes
(including contract law, maritime law, employee law, environmental law, and Brazilian
regulatory approvals necessary for the operation of drilling rigs.) (FRFOF at 67.)
By virtue of being incorporated in the BVI, Lone Star is subject to the BVI’s laws,
regulations, and jurisdiction, including with respect to potential corporate or tax disputes.
(FRFOF ¶ 158.)
f. 	Relevant International Interpretations
As discussed in Videology, a parent company’s management and the fact that a parent’s
board of directors operate the high-level management of a group of companies does not dictate
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 81 of 91

82
the COMI of all subsidiaries where other evidence suggests that the subsidiaries real operations
take place elsewhere. Similar to Videology, most of the drill ship corporations within the
Constellation Group have day-to-day management in Brazil, a location of assets in Brazil, and
the group as a whole has a substantial presence in Brazil. As such, Videology reminds, with
respect to all the drillship companies in the group that the location of the management of the
parent holding companies should not be given undue weight.
g. 	The Reasonable Expectations of Interested Third Parties
The debt documents for the 2024 Notes for which Lone Star is a guarantor explain that
operations and customers are located in Brazil. The 2024 Notes documents also explain
potential restructurings in Brazil. (FRFOF at 68.) Additionally, the JPLs support a finding of
COMI in Brazil. (Id.)
h. 	The Nerve Center Analysis
The nerve center analysis for Lone Star is the same as that applied to Alpha Star, as such,
the Court finds that this factor weighs in favor of COMI in Brazil.
5. 	Gold Star’s COMI is in Brazil
Based upon the Court’s foregoing findings of fact related to Gold Star and the most
relevant COMI factors, discussed below, the Court finds that Gold Star’s COMI is located in
Brazil at this time as a matter of law.
a. 	The Location of the Debtor’s Place of Incorporation is the BVI
Gold Star is incorporated in and subject to the jurisdiction of the BVI. (Supra § II.H.3.)
b. 	Location of those who Actually Manage the Debtor is Brazil
The Brazilian Offices are of particular importance to the rig-owning entities insofar as all
operation and management of their rigs—their primary assets—are run from those locations.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 82 of 91

83
Gold Star’s day-to-day operations are managed by the Brazilian Offices, responsible for its
shared financial, legal, investor relations services and operational co-ordination activities. (Id.)
Petróleo Constellation, the Brazilian incorporated Chapter 15 Debtor, maintains and operates its
sole asset—the offshore drilling rig. (Id.)
The sole director is Michael Pearson, a citizen of the United Kingdom, who resides in the
Cayman Islands. (Id.)
Based upon the foregoing, the Court finds that Gold Star’s management is best described
as located in Brazil for COMI purposes.
c. 	The Location of the Debtor’s Primary Assets is in Brazil
Gold Star owns the Gold Star offshore drilling rig, which is not presently under contract
and is being maintained in a shipyard in Brazil. (Id.) The offshore rig is operated and
maintained by Debtor Petróleo Constellation pursuant to operating and maintenance
agreements, through its operational management team and operational staff located in the
Brazilian Offices. (Id.) The Court finds that this factor weighs in favor of a COMI in Brazil.
d. 	The Location of the Majority of the Debtor’s Creditors or of a Majority of
Creditors who would Be Affected by the Case is Indeterminate
Gold Star has obligations under the 2024 Notes. There is no evidence in the record
regarding the location of the beneficial owners of the 2024 Notes. (Id.)
e. 	The Jurisdiction Whose Law Would Apply to Most Disputes is Brazil
Gold Star’s Brazilian located assets are subject to Brazilian regulatory regimes (including
contract law, maritime law, employee law, environmental law, and Brazilian regulatory
approvals necessary for the operation of drilling rigs.) (Id.) However, by virtue of being
incorporated in the BVI, Gold Star is subject to the BVI’s laws, regulations, and jurisdiction,
including with respect to potential corporate or tax disputes. (FRFOF ¶ 158.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 83 of 91

84
On balance, the Court finds that this factor weighs in favor of a COMI in Brazil.
f. 	Relevant International Interpretations Favor Gold Star’s COMI in Brazil
As discussed in Videology, a parent company’s management and the fact that a parent’s
board of directors operate the high-level management of a group of companies does not dictate
the COMI of all subsidiaries where other evidence suggests that the subsidiaries real operations
take place elsewhere. Similar to Videology, most of the drill ship corporations within the
Constellation Group have day-to-day management in Brazil, a location of assets in Brazil, and
the group as a whole has a substantial presence in Brazil. As such, Videology reminds, with
respect to all the drillship companies in the Constellation Group, that the location of the
management of the parent holding companies should not be given undue weight.
g. 	The Reasonable Expectations of Interested Third Parties Weighs in Favor
of Finding COMI in Brazil
The debt documents for the 2024 Notes for which Gold Star is a guarantor explain that
operations and customers are located in Brazil. The 2024 Notes documents also explain
potential restructurings in Brazil. (Supra § II.H.3.)
The JPLs have been appointed with respect to each of Lone Star, Gold Star, Olinda Star,
and Alpha Star, and function to protect the interests of the collective creditors of each. (Supra §
II.E.) They have expressed support for the Brazilian RJ Proceeding and for a finding of COMI
in Brazil for each of these Debtors. (Id.)
h. 	The Nerve Center Analysis Weighs in Favor of Brazil
The nerve center analysis for Gold Star is the same as that applied to Alpha Star. Thus,
the Court finds that the nerve center factor weighs in favor of a COMI in Brazil.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 84 of 91

85
6. 	Star Int’l Has a COMI in Brazil
Based upon the Court’s foregoing findings of fact related to Star Int’l and the most
relevant COMI factors, discussed below, the Court finds that Star Int’l’s COMI is located in
Brazil at this time as a matter of law.
a. 	The Location of the Debtor’s Place of Incorporation is the Cayman Islands
Star Int’l is incorporated in and subject to the jurisdiction of the Cayman Islands. (Supra
§ II.H.6.)
b. 	The Location of those who Actually Manage the Debtor is Brazil
The Brazilian Offices are of particular importance to the rig-owning entities insofar as all
operation and management of their rigs—their primary assets—are run from those locations.
Star Int’l’s day-to-day operations are managed by the Brazilian Offices, responsible for its shared
financial, legal, investor relations services and operational co-ordination activities. (Id.)
Petróleo Constellation, the Brazilian incorporated Chapter 15 Debtor, maintains and operates its
sole asset—the offshore drilling rig. (Id.) The location of those who manage Star Int’l is best
described as Brazil for purposes of Star Int’l’s COMI analysis.
c. 	Location of the Debtor’s Primary Assets is Brazil
Star Int’l owns the Atlantic Star offshore drilling rig; as of the petition date, the Atlantic
Star was under contract with Petrobras and operating in Brazilian waters. (Id.) This factor
weighs strongly in favor of Star Int’l’s COMI in Brazil.
d. 	The Location of the Majority of the Debtor’s Creditors is Indeterminate
Star Int’l has obligations under the 2024 Notes. There is no evidence in the record
regarding the location of the beneficial owners of the 2024 Notes. (Id.) This factor does not
affect the Court’s COMI analysis for Star Int’l.
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 85 of 91

86
e. 	Brazilian Law Would Apply to Most Disputes
The operation of Star Int’l’s drilling rig is subject to Brazilian regulatory regimes
(including contract law, maritime law, employee law, environmental law, and Brazilian
regulatory approvals necessary for the operation of drilling rigs.) (Id.) Additionally, by virtue of
being incorporated in the Cayman Islands, Star Int’l is subject to the Cayman Island’s laws,
regulations, and jurisdiction, including with respect to potential corporate or tax disputes.
(FRFOF ¶ 158.)
The Court finds that this factor weighs in favor of a COMI in Brazil for Star Int’l.
f. 	Relevant International Interpretations Weigh in Favor of COMI in Brazil
As discussed in Videology, a parent company’s management and the fact that a parent’s
board of directors operate the high-level management of a group of companies does not dictate
the COMI of all subsidiaries where other evidence suggests that the subsidiaries real operations
take place elsewhere. Similar to Videology, most of the drill ship corporations within the
Constellation Group have day-to-day management in Brazil, a location of assets in Brazil, and
the group as a whole has a substantial presence in Brazil. As such, Videology reminds, with
respect to all the drillship companies in the Constellation Group that the location of the
management of the parent holding companies should not be given undue weight.
g. 	The Reasonable Expectations of Interested Third Parties Weigh in Favor
of COMI in Brazil
The debt documents for the 2024 Notes, for which Star Int’l is a guarantor, explain that
the offshore drilling rigs operate “mainly in Brazil” and were currently chartered mainly to
Petrobras. (Supra § II.H.6.) The 2024 Notes documents also explain potential restructurings in
Brazil. (Id.) Additionally, Star Int’l operated a drilling rig that was under contract with Petrobas
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 86 of 91

87
and operating in Brazilian waters as of the petition date. (Id.) The Court therefore finds that this
factor weighs in favor of COMI in Brazil for Star Int’l.
h. 	The Nerve Center Analysis Weighs in Favor of COMI in Brazil
The nerve center analysis with respect to Star Int’l is the same as that applied with respect
to Alpha Star, as above. Thus, this factor weighs in favor of a COMI in Brazil.
7. 	Snover’s COMI is in Brazil
Based upon the Court’s foregoing findings of fact related to Snover and the most relevant
COMI factors, discussed below, the Court finds that Snover’s COMI is located in Brazil at this
time as a matter of law.
a. 	The Location of the Debtor’s Place of Incorporation is the BVI
Snover is incorporated in and subject to the jurisdiction of the BVI. (Supra § II.H.7.)
b. 	The Location of those who Actually Manage the Debtor is Brazil
Petróleo Constellation maintains and operates Snover’s Onshore Drilling Rigs from
Brazil. (Id.) Snover’s rigs are all located, operated, and maintained in Brazil. (Id.) For this
reason, despite two members of the Constellation Group’s executive management being located
in London and its sole director being located in the Cayman Islands, the Court found that the
location of those who actually manage Snover are best described as located in Brazil. (Id.)
c. 	The Location of the Debtor’s Primary Assets is Brazil
Snover’s only assets are three Onshore Drilling Rigs (the QG-V, QG-VIII, and QG-IX).
Each of these Onshore Drilling Rigs is located in Brazil. (Id.) As decided above, the Court finds
that Snover’s assets are located in Brazil for purposes of COMI. (Id.)
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 87 of 91

88
d. 	The Location of the Majority of the Debtor’s Creditors or of a Majority of
Creditors who would Be Affected by the Case is Indeterminate
The location of the majority of creditors is unclear and does not affect the COMI analysis
of Snover. (Id.)
e. 	Brazilian Law Would Apply to Most Disputes
Snover’s active onshore rig is operated and maintained by debtor Petróleo Constellation.
Any actions related to the rig or its operations, as well as Snover’s non-operational onshore rigs
would therefore be subject to Brazilian law. The Court therefore finds that the jurisdiction
whose law would apply to most disputes is Brazil.
f. 	Relevant International Interpretations Favor Finding Management in
Brazil
As discussed in Videology, a parent company’s management and the fact that a parent’s
board of directors operate the high-level management of a group of companies does not dictate
the COMI of all subsidiaries where other evidence suggests that the subsidiaries real operations
take place elsewhere. Similar to Videology, most of the drill ship corporations within the
Constellation Group have day-to-day management in Brazil, a location of assets in Brazil, and
the group as a whole has a substantial presence in Brazil. (Supra § II.B.1(b).) As such,
Videology reminds, with respect to all the drillship companies in the group that the location of
the management of the parent holding companies should not be given undue weight. Thus, for
Snover and other entities owning drillships, the location of the day-to-day management in Brazil
should be given greater weight than the location of Parent/Constellation’s registered office.
g. 	The Reasonable Expectations of Interested Third Parties
Parent/Constellation’s offering memoranda for the 2024 Notes, for which Snover is a
guarantor, explain that operations and customers are located in Brazil. The 2024 Notes
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 88 of 91

89
documents also explain potential restructurings in Brazil. (Supra § II.H.7.) Additionally, the
JPLs support a finding of COMI in Brazil. (Id.) The Court therefore found that the reasonable
expectations of interested third parties, here creditors or proxies for creditors interests, weighed
in favor of finding Snover’s COMI in Brazil. (Id.)
h. 	The Nerve Center Analysis Weighs in Favor of COMI in Brazil
The nerve center analysis for Snover points strongly in favor of Brazil because it is the
owner of three onshore rigs located in Brazil, with operation and management of those rigs
emanating from Brazil.
8. 	Petróleo Constellation’s COMI is in Brazil
Petróleo Constellation is an entity organized under the laws of Brazil with its registered
office at the Rio Office in Rio de Janeiro, Brazil. (Supra § II.H.9.) No objections were filed to
the recognition of the Brazilian RJ Proceeding for Petróleo Constellation, and Alperton does not
object to foreign main recognition in respect of Petróleo Constellation. (Id.) No evidence has
been submitted to suggest that the COMI of Petróleo Constellation is located anywhere other
than its registered office. (Id.) Thus, the COMI presumption holds with respect to this Chapter
15 Debtor. The Court holds that Petróleo Constellation’s COMI is in Brazil.
H. Discretionary Relief that May be Applied to Foreign Debtors after Recognition
as a Non-Foreign Main Proceeding
Debtors who are recognized as participating in foreign nonmain proceedings may be
afforded nearly identical relief as those recognized as operating in foreign main proceedings.
Section 1521(a) outlines the discretionary relief a court may order upon recognition of a foreign
proceeding, whether recognized as main or nonmain. 11 U.S.C. § 1521(a).
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 89 of 91

90
In Winsway Enterprises Holdings Limited, this Court recognized a proceeding in Hong
Kong as a foreign nonmain proceeding. (See Order Granting Motion for Related Relief, the
“Winsway Order,” Case No. 16-10833, ECF Doc. # 22.). The Court recognized the Hong Kong
proceeding of the BVI incorporated debtor as a foreign nonmain proceeding but fully recognized
the scheme of arrangement that was entered by the Hong Kong Court. (Winsway Order ¶ 2.)32
The Winsway Order went on to provide that certain aspects of the scheme (such as creditor
releases) would be “given full force and effect within the territorial jurisdiction of the United
States in accordance with their terms and to the maximum extent enforceable under Hong Kong
law; . . . .” (Winsway Order ¶ 4.) The Winsway Order went on to clarify that all scheme
creditors would be permanently enjoined from, inter alia, “commencing any suit, action or
proceeding in the territorial jurisdiction of the United States to settle any dispute which arises out
of any provision of the Scheme and/or relating to the Scheme.” (Winsway Order ¶ 5(b).)
Thus, Parent/Constellation, although currently recognized as operating in a foreign
nonmain proceeding, may receive nearly identical relief as the relief afforded to the Chapter 15
Debtors whose COMI was determined to be in Brazil. The only discretionary relief granted so
far is to extend the stay to the Parent/Constellation within the territorial jurisdiction of the United
States. Of course, the issues of what, if any, further discretionary relief should be granted to the
Chapter 15 Debtors will have to await further action in the Brazilian RJ Proceeding.
32 	The Winsway Order states, “The Scheme and the Sanction Order entered by the Hong Kong Court are
granted comity and entitled to full force and effect against all entities (as that term is defined in section 101(15) of
the Bankruptcy Code) in accordance with their terms, and such terms shall be binding and fully enforceable on all
creditors whether or not they actually agreed to be bound by the Scheme or participated in the Hong Kong
Proceeding.”
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 90 of 91

91
III. 	CONCLUSION
In sum, as set forth above, the Court grants recognition as a foreign main as to the
following Chapter 15 Debtors: Petróleo Constellation, Constellation Overseas, Alpha Star, Gold
Star, Lone Star, Star Int’l, and Snover.
The Court grants recognition as a foreign nonmain proceeding as to Parent/Constellation.
The Court reaches no decision about recognition as to Olinda Star and Arazi since the
Brazil courts have ordered the Brazilian RJ Proceeding dismissed as to those two entities.
A determination of the COMI may be revisited and the Court may change its COMI
determination if parties provide new evidence of changed circumstances of any of the Chapter 15
Debtors.
IT IS SO ORDERED.
Dated: 	May 9, 2019
New York, New York
_____Martin Glenn____________
MARTIN GLENN
United States Bankruptcy Judge
18-13952-mg Doc 86 Filed 05/09/19 Entered 05/09/19 09:25:41 Main Document
Pg 91 of 91