In Re Sabadash, the US Bankruptcy Court of the Central District of California granted Mr Gaava’s petition for the recognition of the Russian bankruptcy proceedings of Mr Sabadash, however it directed the parties to draft the court order in such a way that did not undermine US sanctions on Russia.
Mr Sabadash sought to argue that the court should not recognise the Russian proceedings because doing so would benefit a US-designated entity, as one of his creditors was Tavrichesky Bank, which is wholly owned by US-designated Russian bank, International Financial Club.
The court held that the Russian bankruptcy proceedings should be recognised to facilitate the recovery of assets for the eventual benefit of a large number of non-DP creditors, however any change in control over Mr Sabadash’s assets should be limited so as not to benefit Tavrichesky Bank.
The court left it to the parties to draft an order consistent with that limitation.
Please find this case and other US sanctions cases on our US judgments page.