KRyS Global was appointed as liquidators over Fairfield, a BVI based fund, which had invested in the Bernard Madoff Ponzi scheme and suffered a net loss of $6 billion.

At the time of KRyS Global’s appointment, the fund was the subject of litigation by the US Chapter 11 bankruptcy trustee for Bernard L. Madoff Investment Securities and had no unencumbered assets. Initial inquiries determined that for any assets to be distributed to investors, a litigation driven strategy would need to be pursued.

After considering the various options, KRyS Global determined that if it was to better its position vis-à-vis the trustee’s suit, and pursue causes of action in the United States, KRyS Global would need the US Courts to recognise and give legitimacy to the BVI liquidation proceedings.


Learning from its experience with the SPhinX liquidations, and aware of the adverse Chapter 15 decisions concerning offshore vehicles (i.e. Bear Stearns and Basis Yield), KRyS Global knew it would have to focus its attention to the issue of the fund’s COMI (Centre of Main Interests), and persuade the United States Bankruptcy Court that the COMI was in fact BVI in order to be granted full main recognition.

Once KRyS Global decided that Chapter 15 recognition was an appropriate measure to take, it reviewed and analysed the limited available case law and history to ensure the highest possible likelihood of securing successful recognition. This included establishing a premises for the storage of books and records in BVI, opening accounts in BVI, retaining lead counsel in BVI and ensuring that creditors and investors knew that decisions were directed from KRyS Global’s offices in BVI.

The petition for recognition was heavily contested by derivative shareholder claimants. In a ground-breaking decision, the United States Bankruptcy Court determined to grant full recognition.  This decision was ratified at both the New York District Court and the Second Circuit, and is currently the leading decision on COMI and Chapter 15.


Recognition in the United States enabled KRyS Global to avail itself of certain protections and powers contained within the United States Bankruptcy Code. For example, KRyS Global was granted a stay of two years to investigate litigation claims. It was able to obtain important discovery of records that would have been difficult without Chapter 15. Chapter 15 was also a critical element in our negotiations with the United States trustee to resolve his suit against the fund.

Certain statutory remedies available in the BVI, in relation to challenging antecedent transactions, are being pursued in New York pursuant to Chapter 15. KRyS Global has also utilised Chapter 15 to consider whether to enforce anti-suit injunctions, and most recently, section 363 of the US Bankruptcy Code was deemed an appropriate consideration in KRyS Global’s efforts to overturn an undervalued sale of a large Madoff claim.

As a result of the liquidators’ actions, recoveries of nearly $200 million have been collected to date.