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Jack Weinberg, New York City (Marianne Bretton-Granatoor, Therese M. Doherty, Graubard Mollen Horowitz Pomeranz & Shapiro, of counsel), for respondent-appellant.
Celia Goldwag Barenholtz, New York City (Richard A. Edlin, Kronish, Lieb, Weiner & Hellman, of counsel), for petitioner-appellee.
Before: PRATT, MAHONEY, and McLAUGHLIN, Circuit Judges.
MAHONEY, Circuit Judge:
Respondent-appellant Refco F/X Associates, Inc. ("Refco") appeals from an order of the United States District Court for the Southern District of New York, Whitman Knapp, Judge, entered September 16, 1991. That order affirmed an order of the United States Bankruptcy Court for the Southern District of New York, Cornelius Blackshear, Bankruptcy Judge, that granted summary judgment in favor of petitioner-appellee Koreag, Controle et Revision S.A. ("Koreag"), liquidator in a Swiss insolvency proceeding, on Koreag's petition pursuant to 11 U.S.C. 304 (1988); ordered the turnover to Koreag of certain funds deposited in a New York bank account; and enjoined the continuation of a related lawsuit by Refco.
We vacate and remand, concluding that the district court and bankruptcy court should have made a threshold determination whether certain disputed funds in the bank account were "property of [the insolvent] estate" within the meaning of 11 U.S.C. 304(b)(2) (1988).
This action arises from a series of currency exchange transactions that took place in April 1989. The issue on this appeal concerns the parties' respective interests in funds deposited in a New York bank account in connection with these exchanges.
A. The Transactions at Issue.
Much that follows has been stipulated by the parties. Refco is a corporation that engages in commodity and currency transactions around the world. It is organized under the laws of New York, and has its principal place of business in New York City. Mebco Bank, S.A. ("Mebco") is a Swiss bank currently in bankruptcy liquidation under the laws of Switzerland. Prior to liquidation, Mebco engaged in worldwide banking activities, including the trading of currencies.
Koreag is a Swiss corporation which has been appointed liquidator in charge of administering the distribution of Mebco's estate. Under Swiss law, Koreag is the sole entity authorized to act on behalf of Mebco. Swiss Bank Corporation is a Swiss bank whose New York branch office ("Swiss Bank-NY") is the locus of the bank account in which are deposited the funds at issue in this action.
Refco and Mebco first discussed doing business together at a meeting in Geneva, Switzerland in May 1986 between a Mebco representative and a representative of Refco's London office. Mebco subsequently provided its annual reports for 1986 and 1987 to Refco. On June 3, 1988, Refco granted Mebco a ten million dollar line of credit to be used for daily settlement of currency transactions.
Refco and Mebco engaged in extensive currency transactions beginning in June 1988. The trading of currencies was accomplished by direct communication between two dealers to determine the terms of the exchange: the currencies involved, the amounts, the exchange rate, and the banks to be used. The exchange was then consummated several days later by wire transfers of currencies in accordance with the prior agreement.
The currency exchanges conducted by Refco and Mebco were of two varieties, in both of which (according to the stipulation of the parties) "Refco and Mebco were each, at once, a purchaser and seller of currencies." The parties have also stipulated that "[t]he agreements between Refco and Mebco contemplated simultaneous exchanges of currencies."
One type of transaction involved Refco's selling foreign currency to Mebco in exchange for U.S. dollars. In that event, Refco would wire transfer the foreign currency into Mebco's account at a designated European bank. Mebco in turn would wire U.S. dollars into an account that Mebco maintained at Swiss Bank-NY (the "Account") with instructions to credit a Refco account at Citibank in New York. Alternatively, Refco purchased foreign currency from Mebco. In that case, the transaction would proceed in reverse, with Refco wiring U.S. dollars to the Account, and Mebco transferring foreign currency to a designated Refco bank account in Europe.
Refco and Mebco entered into several currency exchange contracts during the period April 20 to April 27, 1989. In partial settlement thereof, Refco wired $7,407,510 to the Account at 3:52 p.m. Eastern Standard Time1 on April 28, 1989, in exchange for which Refco was to receive from Mebco foreign currencies of comparable value, to be delivered to Refco bank accounts abroad. Refco also delivered foreign currencies worth approximately 4.1 million dollars to Mebco European accounts from April 28 to May 2, 1989, and in exchange was to receive that amount in U.S. dollars from Mebco via the Account. In connection therewith, from April 20 to April 27, 1989, Mebco had transmitted orders to Swiss Bank-NY for payments from the Account to Refco's account at Citibank in the total amount of $8,789,800. Each of the individual trades was subject to approval by Refco's New York office, which sent confirmation slips for each transaction to Mebco in Switzerland.
At 10:15 a.m. on April 27, 1989, however, the Swiss Banking Commission of Switzerland placed Mebco into liquidation under Swiss law. Immediately thereafter, Koreag was appointed as liquidator. At approximately 2:00 p.m. that day, in accordance with instructions from its Geneva office, Swiss Bank-NY stopped all payments out of the Account, including the payments intended as performance for the Refco currency exchanges. Swiss Bank-NY received no instruction to stop receiving incoming transfers, on the other hand, and the Account remained open to receive deposits.
Refco was not informed by Debtor, Koreag, or Swiss Bank-NY that Debtor had been placed in liquidation, that the Account was closed to outgoing payments, or that Mebco would not perform its side of most of the pending currency exchanges.2 The commencement of the liquidation proceedings was reported by the Dow Jones International News Service newswire, but Refco does not subscribe to that service, and claims that it never received notice that Mebco was in liquidation and its payment orders had been stopped.
Refco received a portion of the foreign currencies covered by its April 28 transfer to the Account of $7,407,510, but the remaining foreign currencies--corresponding to approximately 6.9 million of the U.S. dollars delivered to Mebco--were never delivered. Similarly, there has been no delivery to Refco of U.S. dollars in exchange for the foreign currencies worth approximately 4.1 million dollars that Refco delivered to Mebco European accounts from April 28 to May 2, 1989, although funds had been provided to the Account by Mebco for that purpose. The net result of these aborted currency exchanges is that Refco transferred approximately 6.9 million dollars into the Account, and approximately 4.1 million dollars worth of foreign currency to overseas Mebco accounts, for which Mebco failed to make reciprocating transfers.3
On May 3, 1989, Refco first learned of Mebco's financial situation in response to an inquiry into Mebco's failure to perform its side of the pending currency exchanges. During this conversation between Gary M. Weiss, senior vice president of Refco, and a Mr. Savio to whom Weiss was referred when he called Mebco in Geneva, Weiss orally demanded that Mebco return the U.S. dollars and foreign currencies that Refco had delivered to Mebco in connection with those exchanges. Thereafter, also on May 3, Citibank sent a telex message on behalf of Refco to Swiss Bank-NY requesting the return, inter alia, of the disputed 6.9 million dollars previously wired to the Account by Refco on April 28, 1989. Swiss Bank-NY responded by telex on May 4, 1989 that it would release the funds when authorized by Koreag to do so. Koreag never provided authorization, however, and the funds were never released.
Also on May 4, 1989, Weiss wrote a letter to Mebco, c/o Koreag, detailing "the amounts that are claimed from [Mebco] by [Refco] as of May 4, 1989." Further, see infra, a litigation affidavit by Weiss dated May 4, 1989 and served upon Mebco reiterated Refco's claim.
B. The Proceedings Below.
On May 5, 1989, Refco commenced an action against Mebco in the United States District Court for the Southern District of New York to recover the Disputed Funds. At the same time, Refco obtained an ex parte attachment of the Account. In support of the attachment, Refco served Koreag with papers that included an affidavit by Weiss dated May 4, 1989 which repeated Refco's claim and demand against Mebco, and attached as an exhibit Weiss' letter to Mebco, c/o Koreag, dated May 4, 1989. The attachment papers were delivered to an air courier for transmission to Mebco, and also mailed to Mebco, on May 5, 1989, and the courier completed its delivery to Mebco on May 8, 1989.
Refco moved the district court to confirm the attachment, and Koreag, intervening as Mebco's successor-in-interest, cross-moved to dismiss Refco's action. Koreag's position was that comity should be accorded to the Swiss insolvency proceeding, and that all the funds in the Account should accordingly be turned over for administration in Switzerland. The district court concluded that a proceeding pursuant to 11 U.S.C. 304 (1988)4 was the appropriate vehicle for determining whether to defer to the Swiss insolvency proceedings, and invited Koreag to initiate such a proceeding by application to the bankruptcy court.
Koreag promptly petitioned the bankruptcy court for relief ancillary to a foreign proceeding pursuant to § 304. The petition alleged that the "economical, expeditious and equitable administration of Mebco's liquidation governed by the insolvency laws of Switzerland" required that Mebco's assets in the United States be marshalled and turned over to Swiss insolvency authorities to "prevent the dismemberment of Mebco's estate, to avoid preferences, and to ensure the equitable administration of [the] estate[.]" The petition sought an injunction against further attempts by Refco to reach the funds in the Account, and an order turning over the Account to Koreag as liquidator pursuant to § 304(b)(2).
By decision entered August 26, 1991, the bankruptcy court granted summary judgment to Koreag. In re Koreag, Controle et Revision S.A., 130 B.R. 705 (Bankr.S.D.N.Y.1991). In reaching its decision, the court first rejected Refco's contention that the court lacked jurisdiction over the property sought by Koreag, i.e., the funds on deposit at the Account. Id. at 710-12.
Refco argued that before property could be turned over pursuant to § 304(b)(2), the court must determine that the property was part of the debtor's estate; in other words, the debtor's property. The bankruptcy court declined to make a threshold finding as to who owned the property, stating that Refco's argument "plac[ed] the proverbial 'cart before the horse.' " Id. at 711. The court initially stated that in order to establish jurisdiction to proceed pursuant to § 304, it need only be established that: "(1) a foreign proceeding was commenced against the debtor; (2) the petitioner is a foreign representative entitled to file the action under section 304; and (3) 'the debtor had certain assets within the judicial district where the petition was filed.' " Id. at 711 (quoting In re Trakman, 33 B.R. 780, 783 (Bankr.S.D.N.Y.1983)).
The court then declined to decide the need to satisfy the third (quoted) requirement, however, see 130 B.R. at 711 n. 3 (citing In re Metzeler (Metzeler v. Bouchard Transp. Co.), 78 B.R. 674 (Bankr.S.D.N.Y.1987)), because it deemed that requirement, in any event, fulfilled in this case. The court ruled that "when conducting a jurisdictional analysis, the laws in the foreign proceeding are determinative of whether the foreign bankrupt has assets located in the district in which the section 304 petition was filed," 130 B.R. at 711, and "[u]nder Swiss law, the funds in [the Account] are included in the property involved in Mebco's liquidation proceedings." 130 B.R. at 712. The court concluded: "The last jurisdictional requirement is satisfied since the funds are located in this district." Id.5
The bankruptcy court next evaluated the turnover request in light of the policy considerations set forth in § 304(c). The court stated that "[c]omity is inevitably the more significant factor since the other factors (except for the sixth element dealing with the fresh start theory) are inherently taken into account when considering comity." 130 B.R. at 712 (citing In re Culmer, 25 B.R. 621, 629 (Bankr.S.D.N.Y.1982)). Concluding that the laws of Switzerland were "not repugnant and violative of our fundamental notions of fairness," id. at 716, and that the "marshalling of Mebco's assets should be conducted in one forum with one set of laws so as to ensure equality among all of the creditors," id., the bankruptcy court granted summary judgment directing that the funds in the Account be turned over to Koreag. Id. Although the bankruptcy court's opinion stated that "the balance of [Koreag's] requests in its motion are denied in light of this Court's decision to turnover the funds," id., the order entered by the bankruptcy court permanently enjoined Refco from pursuing the action it had initiated against Mebco in the district court, in addition to directing turnover of the Account to Koreag.
The district court then entered an order on September 13, 1991, revised on September 16, 1991, that affirmed the bankruptcy court order "on Judge Blackshear's opinion below," but stayed enforcement of the order of the district court "until September 30, 1991 at 5:00 p.m. to permit [Refco] to apply to the Court of Appeals for a further stay." Refco thereupon appealed, and on October 1, 1991, this court granted a further stay directing "that the principal amount of $11,191,334.52 [see supra note 3], together with interest on that amount from May 5, 1989, ... be held by Swiss Bank pending final determination of Refco's appeal ..., and may not be transferred to Koreag," and expedited the appeal.
We begin by noting that we will review the decision of the bankruptcy court (and of the district court affirming on the opinion of the bankruptcy court) de novo because the questions presented are matters of statutory interpretation. See Truck Drivers Local 807 v. Carey Transp. Inc., 816 F.2d 82, 88 (2d Cir.1987).
Refco presents two arguments on appeal. First, Refco contends that because Refco had a superior property interest in the Disputed Funds, they were not "property of [Mebco's] estate" within the meaning of § 304(b)(2), and the bankruptcy and district courts accordingly erred in ordering their turnover to Koreag. Refco's alternative position is that even if the Disputed Funds were part of Mebco's estate, the bankruptcy and district courts incorrectly applied the factors set forth in § 304(c) in fashioning the turnover remedy.
We first turn to Refco's argument based upon § 304(b)(2). Responding to Refco's contentions, we initially consider whether, when an adverse claimant raises a plausible dispute concerning the ownership of property whose turnover is sought by a foreign liquidator pursuant to § 304(b)(2), a court should resolve that threshold issue before ordering turnover. Answering that question in the affirmative, we next consider what law governs the resolution of the ownership issue. Concluding that New York law provides the rule of decision in this case, we then address the § 304(b)(2) issue in terms of (1) the New York law of constructive trusts, and (2) the New York Uniform Commercial Code.
A. Threshold Determination of Ownership Issue.
Section 304(a) authorizes a "foreign representative" in a "foreign [bankruptcy] proceeding" to commence a "[c]ase ancillary to [that] proceeding" in a United States bankruptcy court to protect the administration of the foreign proceeding. The purpose of a § 304 petition is to prevent the piecemeal distribution of assets in the United States by means of legal proceedings initiated in domestic courts by local creditors. Victrix S.S. Co., S.A. v. Salen Dry Cargo A.B., 825 F.2d 709, 713-14 (2d Cir.1987); Cunard S.S. Co. v. Salen Reefer Servs. AB, 773 F.2d 452, 454-55 (2d Cir.1985). A bankruptcy court is given broad latitude in fashioning an appropriate remedy in a § 304 proceeding. In re Axona Int'l Credit & Commerce Ltd., 88 B.R. 597, 606 (Bankr.S.D.N.Y.1988), aff'd, 115 B.R. 442 (S.D.N.Y.1990), appeal dismissed, 924 F.2d 31 (2d Cir.1991); In re Culmer, 25 B.R. at 624; see also S.Rep. No. 989, 95th Cong., 2d Sess. 35 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5821 (§ 304(c) "guidelines are designed to give the court the maximum flexibility in handling ancillary cases").
We nonetheless disagree with the bankruptcy court's ruling in this case that a turnover was properly ordered upon the de minimis showing that the disputed funds in the Account were "included in the property involved in Mebco's liquidation proceedings, ... [and] located in this district." 130 B.R. at 712. The court rejected the notion that it was required to make a threshold finding as to the ownership of the funds prior to issuance of the turnover order. In our view, this was not a proper reading of § 304(b)(2).
The applicable distinction is drawn in Lawrence P. King, 2 Collier on Bankruptcy p 304.01, at 304-3 (15th ed. 1992) (emphasis added): "For purposes of section 304, the estate of a foreign debtor is defined by the law of the jurisdiction in which the foreign proceeding is pending, with other applicable law serving to define the estate's interest in particular property." See also In re Lines, 81 B.R. 267, 271 (Bankr.S.D.N.Y.1988) (same).
This interpretation of § 304(b)(2) is supported by the language of the statute. While § 304(b)(1) empowers a bankruptcy court to enjoin litigation "with respect to property involved in" a foreign insolvency proceeding, presumably "to prevent dismemberment by local creditors of assets located here," S.Rep. No. 989 at 35, § 304(b)(2) authorizes turnover only of "property of such estate, or proceeds of such property." Thus, the use of the term "property of such estate" presupposes an antecedent determination of property interests as a condition to the turnover of property to a foreign representative.
This analysis finds further support in the analogy provided by the related provisions of federal bankruptcy law applicable to domestic cases. In a domestic bankruptcy, the commencement of a case creates a bankruptcy estate. 11 U.S.C. 541(a) (1988). The estate is defined to comprise "all legal or equitable interests of the debtor in property as of the commencement of the case" (with exceptions not pertinent here), which definition is supplemented by a listing of several more specifically described categories of property interests. Id. § 541(a)(1)-(7). Nonetheless, "[a]lthough federal bankruptcy law determines the outer boundary of what may constitute property of the estate, state law determines the 'nature of a debtor's interest' in a given item." In re Crysen/Montenay Energy Co. (Crysen/Montenay Energy Co. v. Esselen Assocs., Inc.), 902 F.2d 1098, 1101 (2d Cir.1990) (quoting In re Howard's Appliance Corp. (Sanyo Elec., Inc. v. Howard's Appliance Corp.), 874 F.2d 88, 93 (2d Cir.1989)).
We see no reason why a similar allocation as to controlling law should not apply in § 304 cases. Property interests have an independent legal source, antecedent to the distributive rules of bankruptcy administration, that determines in the first instance the interests of claimant parties in particular property. It logically follows that before a particular property may be turned over pursuant to § 304(b)(2), a bankruptcy court should apply local law to determine whether the debtor has a valid ownership interest in that property when the issue is properly posed by an adverse claimant.
Koreag advances two objections to such application of local law by a bankruptcy court. Its first argument, that § 304 permits the turnover of any property "involved in" a foreign bankruptcy, is simply at odds with the relevant statutory language. Although Congress provided in § 304(b)(1) for certain injunctions to be issued regarding property "involved in" a foreign insolvency proceeding, § 304(b)(2) authorizes turnover only of "property of [the] estate" in a foreign proceeding. Thus, Congress used different language in § 304(b)(1) and (2), the two provisions perform different functions, and we are not at liberty to ignore this legislative choice.
Koreag next contends that if local law is to be applied, the foreign forum presiding over the insolvency estate, and not a local bankruptcy court, should apply that law. Koreag presses the point that adjudication of creditors' claims in a U.S. court will deprive other creditors of an opportunity to be heard, and defeat the policy of distribution by a single forum which § 304 is designed to ensure. In this connection, Koreag cites In re Lines, 81 B.R. at 272, for the proposition that Refco's claims should be adjudicated in the Swiss proceeding. We find these arguments unavailing.
Koreag, as liquidator, has asked a United States bankruptcy court to require the turnover of disputed assets to a foreign insolvency proceeding. The power of the court extends to "property of [the] estate." § 304(b)(2). Once a plausible challenge is presented as to whether particular property falls within the statutory definition, the bankruptcy court whose authority is invoked must determine the legitimacy of that invocation. The nature of this determination demands that it be made prior to the turnover of the property. It is unsatisfactory to say that the property should first be turned over, because it is the ascertainment that property is "of [the] estate" under local law that defines the extent of the court's power to issue the turnover order.
It is also not the case that Mebco's other creditors are prejudiced by such a threshold determination as to property ownership. Refco is not merely asserting rights as an ordinary creditor or claimant in a bankruptcy proceeding. Its position is that Mebco does not own the Disputed Funds. A determination that the funds are not property of the estate therefore does not improperly affect other creditors of the estate, because they have valid claims only against the estate's bona fide assets. The situation is clearly distinguishable from an effort by a normal bankruptcy creditor, without any plausible ownership claim to a specific asset, to gain a preferred position vis-a-vis other creditors by initiating a separate legal proceeding. Cf. Victrix, 825 F.2d at 714 (refusal to countenance attachment designed to evade writ of Swedish bankruptcy court); Cunard, 773 F.2d at 456 (same).
Finally, In re Lines does not support Koreag's position. That case involved an injunction under § 304(b)(1), utilizing the broader "involved in" standard of that provision. See 81 B.R. at 272. Nevertheless, the court did engage in a threshold determination of local law, holding that the particular property at issue, an insurance fund, was sufficiently connected to the debtor under New York law to be "involved in" the foreign insolvency proceeding. See id. at 271. We similarly conclude that particular property must be determined to be "of [the] estate" before it may be turned over pursuant to § 304(b)(2).
B. Choice of Law.
Having held that local law determines whether particular property is part of a debtor's estate, we must decide what local law will supply the substantive rule. Refco argues that New York is the jurisdiction whose law is controlling, while Koreag counters that Switzerland should provide the rule of decision.
Preliminarily, we are faced with an apparent problem of what choice-of-law rule to apply. Federal courts sitting in diversity jurisdiction are required by Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941), to apply the choice-of-law doctrines of the forum state. Many bankruptcy courts have read Klaxon as imposing the forum state's choice-of-law rules on bankruptcy adjudications where the underlying rights and obligations are defined by state law. See, e.g., In re Chanel Fin., Inc. (Continental Cas. Co. v. Kellogg), 102 B.R. 549, 550 (Bankr.N.D.Tex.1988); In re O.P.M. Leasing Servs., Inc. (Hassett v. Far West Fed. Sav. & Loan Ass'n), 40 B.R. 380, 391-92 (Bankr.S.D.N.Y.), aff'd, 44 B.R. 1023 (S.D.N.Y.1984); In re Shepard (Central Trust Co. v. Shepard), 29 B.R. 928, 931 (Bankr.M.D.Fla.1983). In contrast, federal principles should guide our consideration of which jurisdiction's substantive law applies in cases arising out of federal law. See Corporacion Venezolana de Fomento v. Vintero Sales Corp., 629 F.2d 786, 795 (2d Cir.1980), cert. denied,
Selecting the appropriate conflicts rules would thus seem to require us to characterize the present issue under § 304(b)(2) as either predominantly founded upon state-created rights, or involving important concerns implicating national bankruptcy policy. For purposes of this appeal, however, we need not untangle the interwoven features of state and federal law, for we discern no significant difference between the applicable federal and New York choice-of-law rules.
The federal common law choice-of-law rule is to apply the law of the jurisdiction having the greatest interest in the litigation. See Wells Fargo Asia Ltd. v. Citibank, N.A., 936 F.2d 723, 726-27 (2d Cir.1991), petition for cert. filed, 60 U.S.L.W. 3360 (U.S. Oct. 24, 1991) (No. 91-689); Corporacion Venezolana de Fomento, 629 F.2d at 795. The goal of this analysis is to evaluate the various contacts each jurisdiction has with the controversy, and determine which jurisdiction's laws and policies are implicated to the greatest extent.
New York law provides " 'that "the law of the jurisdiction having the greatest interest in the litigation will be applied and that the facts or contacts which obtain significance in defining State interests are those which relate to the purpose of the particular law in conflict." ' " Wells Fargo Asia Ltd., 936 F.2d at 726 (quoting Wells Fargo Asia Ltd. v. Citibank, N.A., 695 F.Supp. 1450, 1453 (S.D.N.Y.1988) (quoting Intercontinental Planning, Ltd. v. Daystrom, Inc., 24 N.Y.2d 372, 382, 248 N.E.2d 576, 582, 300 N.Y.S.2d 817, 825 (1969))). The federal and New York doctrines " 'invoke[ ] similar considerations.' " Wells Fargo Asia Ltd., 936 F.2d at 726 (quoting Wells Fargo Asia Ltd., 695 F.Supp. at 1453 (citing Corporacion Venezolana de Fomento, 629 F.2d at 795)).
Accordingly, we apply an interest analysis consistent with the law of either jurisdiction. Both New York and Switzerland have an interest in the litigation before this court. On the one hand, Refco is incorporated under the laws of New York, with its principal place of business in New York City. Refco performed its obligations under the contract, including confirming the individual transactions, from its New York offices. The Disputed Funds and the Account are located in New York. Moreover, New York as a world financial center has a special concern with transactions such as occurred here and spawned this litigation. See Wells Fargo Asia Ltd., 936 F.2d at 726-27. On the other hand, Switzerland has a valid interest in the administration of Mebco's bankruptcy estate. The Swiss liquidator is concerned with marshalling Mebco's assets and looking after the interests of Mebco's many creditors. Undeniably, Swiss concerns will be affected by the outcome of the current dispute.
Despite connections to both jurisdictions, we conclude that New York has a superior interest in the particular question at issue here. New York's concerns relate to the underlying property claims at stake, the corresponding contract rights of the parties, and the conduct giving rise to this particular property dispute. These relationships are ordinarily regulated under New York law, and New York is concerned with how this law operates as to a New York corporation with its principal place of business in New York. Switzerland's interests, on the other hand, focus less upon the ownership of particular property than upon the fair and organized administration of the debtor's estate, once defined.
The legal policy of fair and efficient distribution of a debtor's estate is distinct from the policy of how various property rights are determined. In the same way that the question is bifurcated under United States bankruptcy law--with state law defining property interests and federal law providing the scheme of distribution--the interests of the competing jurisdictions should be bifurcated in choice-of-law analysis. Switzerland's primary interest is in the administration of Mebco's insolvency estate. New York's primary interest is in defining and protecting the property interests of its citizens and those who do business there. Thus, New York law is more closely related to the particular property dispute at issue. We conclude that New York law should apply.6
C. New York Law.
Our rulings that (1) a threshold determination as to ownership of the Disputed Funds should have been made, (2) applying New York law, require us to vacate the affirming order of the district court. We now apply New York law to address Refco's claims that it has a superior ownership interest in the particular property subject to this litigation. To the extent that these claims depend upon the resolution of legal issues, we will consider those issues at this juncture to facilitate their definitive resolution upon remand. See United States v. Borello, 766 F.2d 46, 60 n. 23 (2d Cir.1985). Conversely, insofar as determinations of fact must be made in order to adjudicate the claims of the parties, we shall remand to the district court for proceedings not inconsistent with this opinion.
As indicated earlier, Refco has advanced contentions premised upon (1) the New York law of constructive trusts, and (2) the New York Uniform Commercial Code. We turn initially to the constructive trust issue, for that question is at least potentially dispositive as to the ownership of all the Disputed Funds.1. Constructive Trust.
Refco argues that the Disputed Funds are not property of Mebco's estate because Mebco obtained them by fraud, and the funds should therefore be impressed with a constructive trust in Refco's favor. Specifically, Refco contends that fraud was committed (1) by Mebco's concealment of its deteriorating financial condition following previous representations of financial health which induced Refco to transfer currency to the Account and to Mebco's overseas bank accounts; and (2) by Mebco and Koreag, as liquidator, in that they took Refco's money post-liquidation knowing that Mebco was insolvent and incapable of performing its end of the bargained-for exchange, and without notifying Refco of the liquidation. Refco further alleges that such conduct contravenes equity and good conscience, and results in substantial unjust enrichment of Mebco's insolvency estate. Refco maintains that a constructive trust is "necessary to satisfy the demands of justice." Latham v. Father Divine, 299 N.Y. 22, 27, 85 N.E.2d 168, 170 (1949).
As we noted in In re Howard's Appliance Corp.:
[T]he Supreme Court has declared that, while the outer boundaries of the bankruptcy estate may be uncertain, "Congress plainly excluded property of others held by the debtor in trust at the time of the filing of the petition," [United States v.] Whiting Pools, [Inc., 462 U.S. 198, 205 n. 10, 103 S.Ct. 2309, 2314 n. 10, 76 L.Ed.2d 515 (1983) ]; see S.Rep. No. 989, 95th Cong., 2d Sess. 82 and H.R.Rep. No. 595, 95th Cong., 2d Sess. 368, reprinted in 1978 U.S.Code Cong. & Ad.News 5787, 5868, 6323-24; see also In re Kennedy & Cohen, Inc., 612 F.2d 963, 965 (5th Cir.) (under previous bankruptcy statute, property held by debtor in constructive trust "belongs to the beneficiary and never becomes a part of the bankruptcy estate"), cert. denied,
874 F.2d at 93 (footnote omitted).
The foregoing authorities deal with domestic bankruptcies, where the bankruptcy estate is defined to include, inter alia, "all legal or equitable interests of the debtor in property as of the commencement of the case," 11 U.S.C. 541(a)(1), but to exclude "any power that the debtor may exercise solely for the benefit of an entity other than the debtor." Id. § 541(b)(1). We believe, however, that they should also govern determinations regarding "the property of [a bankruptcy] estate" under § 304(b)(2), and accordingly that Refco should be given the opportunity to present its constructive trust theory in a trial setting. The courts below never reached this issue, so we hear this appeal without an adequate factual record for its resolution. Accordingly, after setting forth the applicable principles of New York law, we will leave the definitive resolution of this issue for determination upon remand.
Under New York law, a party claiming entitlement to a constructive trust must ordinarily establish four elements: (1) a confidential or fiduciary relationship; (2) a promise, express or implied; (3) a transfer made in reliance on that promise; and (4) unjust enrichment. See Bankers Sec. Life Ins. Soc'y v. Shakerdge, 49 N.Y.2d 939, 940, 406 N.E.2d 440, 440, 428 N.Y.S.2d 623, 624 (1980); Simonds v. Simonds, 45 N.Y.2d 233, 241-42, 380 N.E.2d 189, 194, 408 N.Y.S.2d 359, 363 (1978); Sharp v. Kosmalski, 40 N.Y.2d 119, 121, 351 N.E.2d 721, 723, 386 N.Y.S.2d 72, 75 (1976). Although these factors provide important guideposts, the constructive trust doctrine is equitable in nature and should not be "rigidly limited." Simonds, 45 N.Y.2d at 241, 380 N.E.2d at 194, 408 N.Y.S.2d at 363; see also Bankers Sec. Life Ins. Soc'y, 49 N.Y.2d at 940, 406 N.E.2d at 440, 428 N.Y.S.2d at 624 (application of doctrine to particular circumstances "susceptible of some flexibility").
" ' "A constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee." ' " Brand v. Brand, 811 F.2d 74, 77 (2d Cir.1987) (quoting Simonds, 45 N.Y.2d at 241, 380 N.E.2d at 193, 408 N.Y.S.2d at 363 (quoting Beatty v. Guggenheim Exploration Co., 225 N.Y. 380, 386, 122 N.E. 378, 380 (1919) (Cardozo, J.))). The doctrine's " 'applicability is limited only by the inventiveness of men who find new ways to enrich themselves unjustly by grasping what should not belong to them.' " Simonds, 45 N.Y.2d at 241, 380 N.E.2d at 194, 408 N.Y.S.2d at 363 (quoting Latham, 299 N.Y. at 27, 85 N.E.2d at 170).
Koreag contends that a constructive trust may not be imposed here because there is no confidential or fiduciary relation between the parties. We agree that no such relationship existed between Refco and Mebco. By virtue of their exchange agreements, Refco and Mebco stood in an ordinary, arms-length commercial relationship. Purely commercial transactions do not give rise to a fiduciary relationship. See Rodgers v. Roulette Records, Inc., 677 F.Supp. 731, 738-39 (S.D.N.Y.1988); Van Valkenburgh, Nooger & Neville, Inc. v. Hayden Publishing Co., 33 A.D.2d 766, 766, 306 N.Y.S.2d 599, 600 (1st Dep't 1969), aff'd, 30 N.Y.2d 34, 281 N.E.2d 142, 330 N.Y.S.2d 329, cert. denied,
Moreover, "[i]t is a firmly established principle that if a recipient of funds is not prohibited from using them as his own and commingling them with his own monies, a debtor-creditor, not a trust, relationship exists." In re Black & Geddes, Inc. (Dampskibsselskabet AF 1912 Aktieselskab v. Black & Geddes, Inc.), 35 B.R. 830, 836 (Bankr.S.D.N.Y.1984) (collecting cases). Here, Mebco contracted with Refco to buy and sell currencies, and was under no special duty to segregate the funds from its general account.
We do not believe, however, that the lack of a fiduciary relationship between Mebco and Refco automatically defeats Refco's claim of constructive trust. Although a fiduciary relationship is one of the factors cited by New York courts, the absence of any one factor will not itself defeat the imposition of a constructive trust when otherwise required by equity. See Simonds, 45 N.Y.2d at 241, 380 N.E.2d at 194, 408 N.Y.S.2d at 363; Latham, 299 N.Y. at 27, 85 N.E.2d at 170. New York courts have consistently stressed the need to apply the doctrine with sufficient flexibility to prevent unjust enrichment in a wide range of circumstances. See Palazzo v. Palazzo, 121 A.D.2d 261, 264, 503 N.Y.S.2d 381, 383-84 (1st Dep't 1986) ("the power of equity to employ a constructive trust to reach a just result is not strictly limited by the conditions set forth in Sharp v. Kosmalski "); Tordai v. Tordai, 109 A.D.2d 996, 997, 486 N.Y.S.2d 802, 804 (3d Dep't 1985) (Sharp v. Kosmalski factors "are not rigid, but flexible considerations for the court to apply in determining whether a constructive trust should be imposed"); Coco v. Coco, 107 A.D.2d 21, 24, 485 N.Y.S.2d 286, 289 (2d Dep't 1985) (" 'these factors are merely useful guides and are not talismanic' ") (quoting Reiner v. Reiner, 100 A.D.2d 872, 874, 474 N.Y.S.2d 538, 541 (2d Dep't 1984)).
Hence, New York courts have at times dispensed with one or more of these requirements. In Palazzo, 121 A.D.2d at 264, 503 N.Y.S.2d at 383-84, for example, the court stated that the arguable lack of a transfer would not prevent the imposition of a constructive trust when the other conditions were met and equitable considerations warranted this resolution. See also Tordai, 109 A.D.2d at 997, 486 N.Y.S.2d at 804 (promise implied from existence of confidential relation).
More relevant to the issue at hand, the New York Court of Appeals has expressly stated that a person wrongfully acquiring property can be treated as a constructive trustee notwithstanding the lack of a fiduciary relationship. See Simonds, 45 N.Y.2d at 242, 380 N.E.2d at 194, 408 N.Y.S.2d at 363 (citing Latham, 299 N.Y. at 27, 85 N.E.2d at 170); see also Cavallaro v. Lewis, 198 Misc. 412, 413, 98 N.Y.S.2d 730, 731 (Sup.Ct.1950). Further, the key factor is unjust enrichment, not willfully wrongful conduct. As the Court of Appeals stated in Simonds:
It is agreed that the purpose of the constructive trust is prevention of unjust enrichment (Sharp v. Kosmalski, 40 N.Y.2d 119, 123, 386 N.Y.S.2d 72, 76, 351 N.E.2d 721, 724, supra; Restatement, Restitution, § 160; 5 Scott, Trusts [3d ed.], § 462.2).
Unjust enrichment, however, does not require the performance of any wrongful act by the one enriched (Lengel v. Lengel, 86 Misc.2d 460, 465-66, 382 N.Y.S.2d 678, 681-682, supra; Richards v. Richards, 58 Wis.2d 290, 293-294, 206 N.W.2d 134, supra; see, generally, 5 Scott, Trusts [3d ed.], § 462.2). Innocent parties may frequently be unjustly enriched. What is required, generally, is that a party hold property "under such circumstances that in equity and good conscience he ought not to retain it" (Miller v. Schloss, 218 N.Y. 400, 407, 113 N.E. 337, 339; see Sharp v. Kosmalski, 40 N.Y.2d 119, 123, 386 N.Y.S.2d 72, 76, 351 [N.E.]2d 721, 724, supra; Sinclair v. Purdy, 235 N.Y. 245, 253-254, 139 N.E. 255, 258-259).
45 N.Y.2d at 242, 380 N.E.2d at 194, 408 N.Y.S.2d at 364.
Federal courts applying this doctrine have not been insensitive to the need for flexibility, and thus on occasion have not required a fiduciary relationship in order to impose a constructive trust. See, e.g., E.W. Lines v. Bank of Am. Nat'l Trust & Sav. Ass'n, 743 F.Supp. 176, 179-80 (S.D.N.Y.1990) (constructive trust imposed, applying New York law, despite absence of fiduciary relationship); SEC v. Levine, 689 F.Supp. 317, 321-23 (S.D.N.Y.1988) (same), modified on other grounds,
We note, further, that the Disputed Funds were transferred after Mebco had been declared insolvent and Koreag had assumed its office as liquidator of the insolvency estate under Swiss law. Such an entity is generally deemed to occupy a fiduciary status vis-a-vis creditors of the insolvency estate. See, e.g., Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 355, 105 S.Ct. 1986, 1994, 85 L.Ed.2d 372 (1985) (bankruptcy trustee has fiduciary duty to both creditors and shareholders); Stein v. United Artists Corp., 691 F.2d 885, 892-93 (9th Cir.1982) (debtor in possession holds title to property as fiduciary for creditors); In re Nat'l Molding Co., 230 F.2d 69, 71 (3d Cir.1956) (bankruptcy trustee, " 'as the title of his office imports, ... is trustee for all who have interests, and according to those interests ' ") (quoting In re Ducker, 134 F. 43, 47 (6th Cir.1905) (emphasis in Nat'l Molding )); Ragsdale v. New England Land & Dev. Co., 250 Ga. 233, 234-35, 297 S.E.2d 31, 32-33 (1982) (trustee in bankruptcy acts for benefit and protection of creditors).
Clearly, Koreag was acting in some fiduciary capacity toward some entities at the time it received the Disputed Funds from Refco. Whether or not this status resulted in a fiduciary relationship between Refco and Koreag for purposes of the transactions at issue and New York constructive trust doctrine, furthermore, it remains relevant to our overall assessment of the issue whether unjust enrichment has occurred for which a constructive trust should be imposed. In any event, to the extent that Koreag might be deemed not to have been acting as a fiduciary for Refco, we have seen that such a relationship is not invariably required for the imposition of a constructive trust under New York law.
As to the other requirements for a constructive trust, a promise of reciprocal exchange clearly arises from the stipulations that, as to both types of currency exchanges at issue, "Refco and Mebco were each, at once, a purchaser and seller of currencies," and "[t]he agreements between Refco and Mebco contemplated simultaneous exchanges of currencies." Further, the transfer of the Disputed Funds by Refco was manifestly made in reliance upon that promise, and the receipt of the Disputed Funds by Koreag without ultimate performance of the promised exchanges unjustly enriched Mebco's insolvency estate.
Thus, if we were to decide the issue on the present record, we would impose a constructive trust upon the Disputed Funds in behalf of Refco. The issue has not been addressed in a trial setting, however, and the definitive resolution of this essentially equitable issue should be made only after the parties have had a full opportunity to present all pertinent considerations to a finder of fact. Among other things, for example, it is at least puzzling that some currency exchanges were bilaterally performed between Refco and Mebco after Mebco went into liquidation, although those involving the Disputed Funds were not. See supra note 2. In any event, the question should be resolved upon a complete record.
We will therefore remand for further proceedings on this issue, not inconsistent herewith, in which Koreag will bear the practical burden, at least, of establishing why a constructive trust should not be imposed upon the Disputed Funds.
2. New York Uniform Commercial Code.
In the event that Refco does not prevail on the constructive trust issue, Refco's contentions regarding the New York Uniform Commercial Code (the "Code") must then be considered. Article 2 of the Code "applies to transactions in goods." N.Y.U.C.C. § 2-102 (McKinney 1964). As a threshold matter, therefore, it must be determined whether the foreign currencies that Refco and Mebco agreed to exchange were "goods" within the meaning of section 2-102.
As pertinent here, N.Y.U.C.C. § 2-105 (McKinney 1964) defines "[g]oods" as "all things ... which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid " (emphasis added). This definition indicates that money is excluded only when it is used as the medium of exchange. In a currency exchange contract, however, the money is not the medium of exchange, but rather the object of exchange. Such currency thus constitutes "goods" within the meaning of section 2-102, and accordingly a contract to exchange currencies is subject to the Code. This view has recently been approved by the New York Court of Appeals, which applied the Code to a contract to exchange U.S. dollars for Italian lire. See Intershoe, Inc. v. Bankers Trust Co., 77 N.Y.2d 517, 521, 571 N.E.2d 641, 643, 569 N.Y.S.2d 333, 336 (1991) ("There seems no question that the UCC applies to foreign currency transactions (see, UCC 2-105 Official Comment 1, McKinney's Cons.Laws of N.Y., Book 62 1/2, UCC 2-105, at 96; Buerger & O'Connor, Practice Commentary, op. cit., at 94).").
Since currency exchanges involve the simultaneous trading of money qua goods, a participant in such an exchange is both a seller with respect to the currency it is delivering, and a buyer with respect to the currency it is receiving. N.Y.U.C.C. § 2-304(1) (McKinney 1964) provides that payment under a contract can be made "in money or otherwise," and that if the price "is payable in whole or in part in goods each party is a seller of the goods which he is to transfer." Therefore, in any exchange of currencies, the parties are both sellers of the currencies that they transfer. It follows that they are both buyers of the currencies that they receive.
Thus, Refco was at once a seller of the approximately 6.9 million dollars of the Disputed Funds that it transferred to the Account, and a buyer of the foreign currencies that the parties intended Refco to receive in exchange (the "6.9 Million Dollar Transaction"). In addition, Refco was a seller of the foreign currencies that it delivered to Mebco's European accounts from April 28 to May 2, 1989, and a buyer of the approximately 4.1 million U.S. dollars in the Account and apparently designated to pay for the transferred foreign currencies (the "4.1 Million Dollar Transaction"). The remedies available to Refco will correspond to, and vary in accordance with, Refco's respective positions as buyer and seller in the two transactions, which we address in turn.
The 6.9 Million Dollar Transaction
As a seller of U.S. dollars in this transaction, Refco is entitled to reclaim those dollars, whether the contract to exchange currencies is considered a sale on credit or for cash. If the transaction is deemed a credit sale, "[w]here the seller discovers that the buyer has received goods on credit while insolvent he may reclaim the goods upon demand made within ten days after [their] receipt." N.Y.U.C.C. § 2-702(2) (McKinney 1964). It is clear that Mebco was in fact insolvent at the time it received the U.S. dollars in question, and as will appear, Refco made appropriate demand within ten days thereafter.
If the currency exchange is considered a cash sale, Refco has a similar right of reclamation. N.Y.U.C.C. § 2-310(a) (McKinney 1964) provides that unless the parties agree otherwise, payment for goods is due on delivery. Section 2-507(2) further specifies that "[w]here payment is due and demanded on the delivery to buyer of goods ..., his right as against the seller to retain or dispose of them is conditional upon his making the payment due." These provisions operate to create a seller's right to reclaim goods from an insolvent buyer who takes possession of the goods, but fails to tender payment. See Szabo v. Vinton Motors, Inc., 630 F.2d 1, 3 (1st Cir.1980); In re Samuels & Co. (Stowers v. Mahon), 526 F.2d 1238, 1244-45 (5th Cir.) (in banc), cert. denied,
Applying these principles, we find that Refco has a right of reclamation against Mebco with respect to the 6.9 Million Dollar Transaction. Refco's interest in the approximately 6.9 million dollars of Disputed Funds related to this transaction is therefore superior to Mebco's. Under these circumstances, these funds cannot be considered "property of [Mebco's] estate" within the meaning of 11 U.S.C. 304(b)(2) (1988), and thus cannot be the subject of a turnover order thereunder.7
Koreag concedes that Refco made an adequate section 2-207(2) demand for the return of those funds, but contends that Refco's state law right of reclamation is limited by 11 U.S.C. 546(c) (1988), which provides in pertinent part:
(c) Except as provided in subsection (d) of this section, the rights and powers of a trustee under sections 544(a), 545, 547, and 549 of this title are subject to any statutory or common-law right of a seller of goods that has sold goods to the debtor, in the ordinary course of such seller's business, to reclaim such goods if the debtor has received such goods while insolvent, but--
(1) such a seller may not reclaim any such goods unless such seller demands in writing reclamation of such goods before ten days after receipt of such goods by the debtor....
Id. (emphasis added).
Koreag contends that § 546(c) provides the exclusive remedy for a seller who seeks to reclaim goods from a debtor in bankruptcy, see In re Rawson Food Serv., Inc. (Flav-O-Rich, Inc. v. Rawson Food Serv. Inc.), 846 F.2d 1343, 1346 (11th Cir.1988); In re Rozel Indus., Inc. (Hitachi Denshi Am., Ltd. v. Rozel Indus., Inc.), 74 B.R. 643, 645 (Bankr.N.D.Ill.1987) (collecting cases), and that Refco made only an oral demand upon Mebco (i.e., the Weiss-Savio conversation on May 3, 1989) for return of the approximately 6.9 million dollars during the ten-day period stipulated by section 546(c)(1). Mebco discounts the written demand made by Citibank upon Swiss Bank-NY the same day because, Mebco contends, the relationship between Mebco (as a depositor) and Swiss Bank was that of debtor and creditor, not principal and agent. The Weiss affidavit filed in the attachment proceedings is similarly disparaged because it "did not mention Refco's alleged right to reclamation under the UCC in words or substance."
We see no merit in Koreag's position. We note that Swiss Bank-NY appears clearly to have performed agency functions for Mebco with respect to the transactions at issue herein that went well beyond the "bare bones" relationship between a bank and a depositor. See Delbrueck & Co. v. Manufacturers Hanover Trust Co., 609 F.2d 1047, 1051-52 (2d Cir.1979); Ehag Eisenbahnwerte Holding Aktiengesellschaft v. Banca Nationala a Romaniei, 306 N.Y. 242, 250-51, 117 N.E.2d 346, 350 (1954). In any event, § 546(c) is addressed to "the rights and powers of a trustee under sections 544(a), 545, 547, and 549 of this title," and has no bearing here.
We note in this connection that a § 304 proceeding is not a bankruptcy case that implicates the full range of procedural and substantive provisions applicable to domestic bankruptcies. See In re Axona Int'l Credit & Commerce Ltd., 88 B.R. at 606 (§ 304 case does not give rise to full-scale bankruptcy with automatic stay or avoidance powers); In re A. Tarricone, Inc., 80 B.R. 21, 23 (Bankr.S.D.N.Y.1987) (§ 304 does not grant avoidance powers); In re Metzeler, 78 B.R. at 677 (same); In re Gee (Universal Casualty & Sur. Co. v. Gee), 53 B.R. 891, 896 (Bankr.S.D.N.Y.1985) (§ 304 case a limited one designed to function in aid of foreign proceeding); 2 Collier on Bankruptcy p 304.01, at 304-3 (same). Thus, the limited function of § 304 reinforces the clear language of § 546(c). Section 546(c) does not apply in a § 304 proceeding, and Koreag's arguments premised upon § 546(c) are accordingly unavailing.
The 4.1 Million Dollar Transaction
Refco's Code remedies with respect to this transaction are remarkably different. Here, Refco transferred foreign currencies to Mebco European accounts in anticipation of receiving corresponding U.S. dollars from the Account. Thus, Refco stands in the position of buyer with respect to those dollars. Accordingly, Refco has available to it only the Code remedies of a buyer, which do not include a right equivalent to that of reclamation in this case.
These remedies are set forth in N.Y.U.C.C. § 2-711 (McKinney 1964), which provides in pertinent part:
(1) Where the seller fails to make delivery or repudiates ... then with respect to any goods involved, and with respect to the whole if the breach goes to the whole contract (Section 2-612), the buyer may cancel and whether or not he has done so may in addition to recovering so much of the price as has been paid
(a) "cover" and have damages under the next section as to all the goods affected whether or not they have been identified to the contract; or
(b) recover damages for non-delivery as provided in this Article (Section 2-713).
(2) Where the seller fails to deliver or repudiates the buyer may also
(a) if the goods have been identified recover them as provided in this Article (Section 2-502); or(b) in a proper case obtain specific performance or replevy the goods as provided in this Article (Section 2-716).
The official comment to this section specifies that its purpose is "[t]o index ... the buyer's remedies, subsection (1) covering those remedies permitting the recovery of money damages, and subsection (2) covering those which permit reaching the goods themselves." Id. § 2-711 official comment 1. Thus, only the subsection (2) remedies could arguably provide any basis for ownership rights in specific property.
Subsection (2)(a) authorizes recovery of "identified" goods, pursuant to section 2-502. In turn, section 2-502(1) authorizes recovery of specific goods from an insolvent buyer where the goods have been identified to the pertinent contract pursuant to section 2-501. No such identification has occurred, however, in this case. Mebco was not required to provide especially identified or segregated currency, but rather any nonspecific U.S. dollars in the specified quantity.
Subsection (2)(b) authorizes specific performance or replevin as provided in section 2-716. Section 2-716(1) allows specific performance "where the goods are unique or in other proper circumstances." The U.S. dollars at issue here are obviously not "unique." The pertinent official comment states that "inability to cover is strong evidence of 'other proper circumstances.' " N.Y.U.C.C. § 2-716 (McKinney 1964) official comment 2. Similarly, section 2-716(3) authorizes replevin "for goods identified to the contract if after reasonable effort [the buyer] is unable to effect cover for such goods." Clearly, Refco can "cover" Mebco's failure to perform its side of the 4.1 Million Dollar Transaction by obtaining other U.S. dollars.
We conclude that the Code poses no impediment to deeming the portion of the Disputed Funds that is involved in the 4.1 Million Dollar Transaction to be "property" of Mebco's estate within the meaning of § 304(b)(2). We therefore turn to Refco's alternative contention that under a proper analysis of § 304(c), turnover is inappropriate.
D. Turnover under Section 304(c).
Section 304(c) specifies six factors that are to be considered in fashioning a remedy in an ancillary case, including turnover of property. Four of those factors are relevant to this case:
(1) just treatment of all holders of claims against or interest in such estate;
(2) protection of claim holders in the United States against prejudice and inconvenience in the processing of claims in such foreign proceeding;
(4) distribution of proceeds of such estate substantially in accordance with the order prescribed by this title; [and]
(5) comity....
11 U.S.C. 304(c) (1988).
Further, as noted earlier, the overriding purpose of § 304 is to prevent piecemeal distribution of a debtor's estate, and a bankruptcy court is accorded broad latitude in fashioning an appropriate remedy in a § 304 proceeding.
Refco argues that under the relevant § 304(c) factors, turnover of the property was improper because the bankruptcy court improperly emphasized the factor of "comity" to the exclusion of other vital considerations. Although neither the Code nor the legislative history accords superior weight to the comity factor, the bankruptcy court deemed itself bound by prior Southern District of New York decisions holding that comity is of paramount concern. See Koreag, 130 B.R. at 712 (citing In re Culmer, 25 B.R. at 628; In re Gee, 53 B.R. at 891). But see In re Papeleras Reunidas, S.A., 92 B.R. 584, 594 (Bankr.E.D.N.Y.1988) (comity given only equal weight with other factors; Southern District view explicitly rejected).
We see no need to reconcile these disparate views in the present posture of this case. If Refco prevails on the constructive trust issue upon remand, none of the Disputed Funds will be subject to turnover. If Koreag prevails on that issue, only the portion of the Disputed Funds involved in the 4.1 Million Dollar Transaction will be subject to turnover. Under any view of the relative weight to be accorded the pertinent § 304(c) factors, turnover would be a permissible exercise of discretion as to those funds.
In the only possible turnover scenario, the funds subjected to turnover would be subject only to Refco's claim as a general, unsecured creditor. Refco could assert no valid security interest or other benefit of domestic law whose deprivation might render a turnover unfair or otherwise improper. Cf. Interpool, Ltd. v. Certain Freights of the M/V Venture Star, 102 B.R. 373, 378-80 (D.N.J.1988) (denying § 304 petition because American creditor denied procedural protections and remedy of equitable subordination under Australian law), appeal dismissed, 878 F.2d 111 (3d Cir.1989); In re Toga Mfg. Ltd., 28 B.R. 165, 168-71 (Bankr.E.D.Mich.1983) (denying § 304 petition because domestic creditor would lose priority status in Canadian proceeding).
As the bankruptcy court stated, "Refco does not dispute that Switzerland's insolvency procedures are fundamentally fair." Koreag, 130 B.R. at 715. Accordingly, Refco will not be prejudiced if required to litigate unsecured claims in a Swiss proceeding. Comity calls for such a result, and Refco's prior attachment of the Disputed Funds does not suffice to defeat a turnover order under § 304(c). See Cunard, 773 F.2d at 458.
The revised order of the district court is vacated and the matter is remanded for further proceedings not inconsistent with this opinion. The order of this court entered October 1, 1991 that granted a stay pending final determination of this appeal is continued, pending final determination of the § 304 proceeding upon remand. Any future appeal in that proceeding shall be referred to this panel. The mandate shall issue forthwith.
1 All times herein are Eastern Standard Time
2 As will appear, Refco received a small portion of the foreign currencies covered by its April 28 transfer to the Account of $7,407,510. In addition, the parties have stipulated that at 3:46 p.m. on April 27, 1989, after Mebco was placed into liquidation, Refco wired two million dollars to the Account for which it received the agreed foreign currencies in exchange
3 The precise amount in dispute is $11,191,334.52 (the "Disputed Funds")
4 Section 304 provides:
(a) A case ancillary to a foreign proceeding is commenced by the filing with the bankruptcy court of a petition under this section by a foreign representative.
(b) Subject to the provisions of subsection (c) of this section, if a party in interest does not timely controvert the petition, or after trial, the court may--
(1) enjoin the commencement or continuation of--
(A) any action against--
(i) a debtor with respect to property involved in such foreign proceeding; or
(ii) such property; or
(B) the enforcement of any judgment against the debtor with respect to such property, or any act or the commencement or continuation of any judicial proceeding to create or enforce a lien against the property or such estate;
(2) order turnover of the property of such estate, or the proceeds of such property, to such foreign representative; or
(3) order other appropriate relief.
(c) In determining whether to grant relief under subsection (b) of this section, the court shall be guided by what will best assure an economical and expeditious administration of such estate, consistent with--
(1) just treatment of all holders of claims against or interests in such estate;
(2) protection of claim holders in the United States against prejudice and inconvenience in the processing of claims in such foreign proceeding;
(3) prevention of preferential or fraudulent dispositions of property of such estate;
(4) distribution of proceeds of such estate substantially in accordance with the order prescribed by this title;
(5) comity; and
(6) if appropriate, the provision of an opportunity for a fresh start for the individual that such foreign proceeding concerns.
5 There were concededly funds in the Account, when Koreag initiated the § 304 proceeding, in addition to those claimed by Refco, so we can see no impediment to the bankruptcy court's exercise of jurisdiction over that proceeding under any view of the jurisdictional issue. As will appear, however, we disagree with the bankruptcy court's conclusion that the threshold determination of the ownership of the funds in the Account claimed by Refco is to be made under Swiss law
6 Refco argues on appeal that the bankruptcy court lacked an adequate basis for its conclusion that "[u]nder Swiss law, the [Disputed Funds] are included in the property involved in Mebco's liquidation proceedings." 130 B.R. at 712. Our conclusion that Swiss law does not govern this controversy moots the contention
7 We note that a seller's right to reclaim under N.Y.U.C.C. § 2-702(2) (McKinney 1964) "is subject to the rights of a buyer in ordinary course or other good faith purchaser under this Article (Section 2-403)," id. § 2-702(3), and that a similar rule applies in the case of a constructive trust. See Simonds, 45 N.Y.2d at 242, 380 N.E.2d at 194, 408 N.Y.S.2d at 364; Majer v. Schmidt, 169 A.D.2d 501, 502, 564 N.Y.S.2d 722, 725 (1st Dep't 1991); Birnbaum v. Birnbaum, 117 A.D.2d 409, 420, 503 N.Y.S.2d 451, 458 (4th Dep't 1986). The existence of a third party with a property interest superior to that of both the initial claimant and the debtor, however, would simply be an added reason to preclude turnover under § 304(b)(2)
This document cites
- U.S. Code - Title 11: Bankruptcy - 11 USC 546 - Sec. 546. Limitations on avoiding powers
- U.S. Code - Title 11: Bankruptcy - 11 USC 541 - Sec. 541. Property of the estate
- U.S. Code - Title 11: Bankruptcy - 11 USC 304 - Sec. 304. Cases ancillary to foreign proceedings
- U.S. Supreme Court - Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343 (1985)
- U.S. Supreme Court - Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941)
See other documents that cite the same legislation


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Life Nomadic: Beating The Moroccan Hustle
I have a lot of great things to say about Morocco, and I'll get to those soon. Today, though, I'm going to talk about an insane part of the culture that can be found everywhere from Tangier to Marakkech: the hustle.
As a visitor who doesn't speak the language, I'm only really able to interact with a small percentage of the population. Of those people I interacted with, I'd say that a good ninety percent of them are full fledged hustlers.
What do I mean by hustlers? I mean people who are hell bent on getting money from you, whether it's through lying, aggressive salesmanship, or cheating. They don't cross that fine line from cheating to stealing, though.
The biggest scam is the outright price change. We became so used to this one that as shocking as it was the first time it happened, we had come to expect it by the end. Here's a real life example of how it works:
The Price Bump
Determined to ride camels in the desert, we hired a taxi driver to take us seven hours south of Fez to the edge of the desert. On the way we made phone calls to different tour companies and arranged for a one night camel ride into the desert, including lodging, food, and return by minibus to Marrakech the next day. Already brutally familiar with the Price Bump, we three times clearly articulated how much we were to pay, 300 Dirhams each, and what we were to receive.
"Do you need a bus to Marrakech? 350 Dirhams each."
Yes, he was trying to charge us more for the bus that was supposed to be included already than we had agreed to pay for the entire tour. It was the only bus to Marrakech that day and was leaving in fifteen minutes.
How do you deal with the Price Bump? The only way to win is to refuse to give a single dirham more. When you show your surprise at the new price, the hustler will always try to act compassionate and bring the price down a bit, trying to get you to renegotiate.
I'd fallen for it the first couple times (orange juice salesman are ruthless), but I'd had enough. I made it very clear that not only was I not going to pay any more than we'd already agreed, but that I also wasn't going to leave until he put me on a bus. I kept my feet planted and my money in my pocket.
He finally relented and let us on the bus with a smile.
Super Aggressive Salesmen
It sometimes seems like everyone in Morocco is either selling something or is acting as an agent for someone selling something. "Need hash? Get high before you fly" may as well be a national slogan. I don't care where point A and B are; traveling between them will absolutely result in someone following you, belting out some sort of sales pitch.
If you make the mistake of actually talking to one of the would-be salesmen, he won't leave until you get where you're going, and often times will follow you inside.
The salesmen in shops are brutal. They'll try to make you articulate which of their wares you like best, even if you say you're not interested, and start the bargaining shortly after. They'll tell you that even if you're a poor student who doesn't have any need for a fine wool rug, you should buy five to sell back at home.
The key to dealing with aggressive salesmen is to first realize that you're under no obligation to buy anything, whether they approach you or you go into their store. Ignoring people who approach you, even if it's with friendly conversation, is the only way to stave off the roaming touts.
By the end of the trip I'd started to like the bargaining battlefield and even the bait and switch price gouging. It was offensive, but somehow perversely satisfying to stand my ground and win. The casualty of being jaded, which is the only way to cope with the hustle, is that you miss out on meeting the really amazing friendly Moroccans.
In the beginning we'd talk to everyone who stopped us to ask where we were from. Ninety percent would then pester us relentlessly about something or other, but the remaining ten percent became our friends: people who showed us around Morocco, shared its stories, and became familiar faces around the Medina.
I'd recommend that everyone visit Morocco. It's very different from Western culture, has a lot of great historic things to see, and truly has the best orange juice in the world. But be prepared for the hustle-- we weren't.
Filed under: Morocco, Life Nomadic
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Reader Comments (Page 1 of 1)
Mike Barish Jun 17th 2009 12:41PM
I'm fortunate enough to have olive skin and a dark beard...in other words, I can blend in while in Morocco. When I was there, my friends and I were largely left alone because it was assumed that I was our guide and the group was already spoken for.
So, my advice to travelers: Bring a friend who can blend in with the locals.
Better advice: GO TO MOROCCO. GO TO MARRAKECH. GET THE OJ! Tynan, spot on with that assessment for sure!
Jeff Jun 17th 2009 2:55PM
The hustling was the biggest surprise for me, when I visited Marrakech in mid-April. It was like nonstop. From the first minute I was in the Djeema el Fna with my luggage to when I was waiting for the bus to the airport, the young in old pestered nonstop. But by the end, I felt the same way, ready for the challenge and the feeling from not budging! Definitely worth the hassling and hustling, though!
BrianM Jun 17th 2009 6:22PM
Any tips for finding a guide that can help you deal with this and avoiding the hussle?
JimmyC Jun 18th 2009 8:05AM
My first experience of 'the hustle' caught my by surprise as well. Our first night there we wandered down to the main square in Marakech, Djemaa el Fna, to absorb the vibrancy of the evening. The place was packed with locals and tourists alike, the former hustling for all they're worth, the latter often looking slightly bewildered.
We were approached by a group of women who were set up to paint Henna on your hands - they were surrounded by picture books containing amazing dye art, which had caught our attention. They grabbed our hands and began drawing unrecognisable scribbles on them, before demanding money. When we refused to pay they became a bit irate and we ended up giving them a token payment and walking away.
The lesson we quickly learned is that you have to keep to yourself and be polite but very firm when saying, "La Shukran".
Eric Bomblatus Jul 21st 2009 12:42AM
Que tal?
I have recently returned from a fabulous trip in Buenos Aires. I spent a month taking Spanish lessons for my own enrichment (and college credit). I also saw and experienced many incredible things, to be vague. It was truly life changing.
I'd love to tell you more about Buenos Aires. You have to go! I know a few people who are very helpful and I can also give you my own advice. Send me an email when you have the opportunity.
Last remark: You've once mentioned to me a really great language-learning program you used for Japanese. Could you please give me the details?
Niels Bom Aug 14th 2009 4:43AM
I heard that in the country's capital Marrakech it used to be worse but then the king decided that for the tourists' comfort the hustlers couldn't hustle that hard any more. Interesting country though :)
John Sep 9th 2009 11:21PM
Assuming all your valuables are safely on your person, just stare at the person without responding with words or non-verbal cues.
Eventually the aggressive person will walk away thinking that your are an idiot or deaf.
Don't look at their hands or the merchandise or anything other than their eyes.
No positive response and no negative response drives these people bonkers.
If your up to it, follow them into the store (with your friend tagging along and doing the same as you), follow them into the store and continue to just stare at their eyes whatever they show you or say.
The coup de grace is to say shukran when they gesture for you to leave.
Chemis Sep 22nd 2009 6:13AM
That place is just amazing, of course it took me two days to stop looking from my left to the right shoulder to feel that I am safe and not going to be kidnapped :P
I miss it..thanks for bringing back some great memories.
Best wishes, Chema from sweden
aureliainkaos Jun 15th 2010 8:31PM
I loved living in Morocco. I never got hustled though. A couple people tried, but I have a husband, three brothers in law, three sisters in law and a mother in law who wouldn't let anyone mess with me. Of course I lived in a neighborhood where everyone knew everyone else and knew I was the only American living there. Also, the only American most had ever actually seen. On our forays to the Medina (which were often!) sometimes the locals would approach me speaking French, thinking I was a Euro tourist. But that only lasted a second until whoever I was with made it clear not to mess with me. I miss being there so much.


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Neighborhoods: Historic Downtown, Downtown - Van Vorst Park
Never Again – The bartender looked like she really did not appreciate her job. She was rude. I tried to ask her how''s she doing but she was short and rude. She showed NO skill as a professional bartender. She was munching the whole time I sat on the bar. The only beer she had was Coors Light and Amstel Light. I opened the bathroom door and some girl was inside.....apparently door lock did not work. The place was deserted on a Saturday night. I guess I should have tried Mon or Tue night..... I simply found this place wastage of time. Can never recommend it to anyone.
Cute place, nice selection – We went to Bar Majestic for the first time this past weekend and will definitely be going back. Although the menu wasn't huge, what we did order was delicious and arrived artfully displayed on the plate. We had some sort of crispy shrimp that came with jasmine rice, and also a quesadilla with mushrooms. We liked the ambience, very low key and the candlelight was nice. We also enjoyed the drinks, while my husband had a nice red wine that our server helped him select, I had a fantastic mojito.
Never again! – Aside from their new decor, this place just plain stinks. Are they under new management or something? Went for drinks a couple weeks ago, sat at the bar, and when my girlfriends and I asked for the check, the greedy bartender told us a larger amount than the check...must have wanted to make sure we would tip. Granted, we may have looked a little scrubby after going to yoga (upstairs), but that is just plain wrong.
Keep your overpriced drinks. I'd rather drink toilet water.
Liked the vibe – I have been to this place twice. Once on date and the other in a group. Onethe date I ordered some type of seafood pasta and it was not good at all but my date ordered pork tenderloin and it was delicious. The second time fwhen I went with friends it was a blast. The belly dancers and a twist to your nite. I liked the vibe and would go back, it is a bit pricey but a nice change for jersey city.
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NEWBURYPORT — The union protesting Anna Jaques Hospital's decision to hire nonunion electrical workers as part of its $15 million renovation project has been conspicuously absent from the downtown area the last several days.
But those hoping that members of the International Brother of Electrical Workers Local 103 have decided to pack up their 9-foot-tall inflatable rat and leave the city for good are in for a disappointment. A union representative said yesterday they would be back protesting today.
IBEW Local 103 representative Louis Antonellis said the union decided to take a few days off after he was asked by Mayor Donna Holaday to remove the inflatable rat from the Market Square area for the rest of Yankee Homecoming, the eight-day celebration that wrapped up Sunday.
"We decided that, talking to the mayor, we would pull back a little bit to let the people of Newburyport enjoy their weekend," Antonellis said.
Holaday confirmed the conversation, saying the inflatable rat, which was last seen outside the Firehouse Center for the Performing Arts near the beginning of the Homecoming celebration, was creating a safety hazard and taking up too much space, as thousands of people a day visited the downtown area.
Months of back and forth
Prior to Yankee Homecoming, IBEW Local 103 had been stationing its large, gray rat inside the bullnose area of Market Square during several consecutive weekends.
The union has been upping the ante in its protests over the past few months, staging rallies during the city's Memorial Day parade and renting a plane to fly a banner highlighting an anti-hospital website during Newburyport High School graduation exercises. Like the inflatable rat, the flyovers have been part of the weekend landscape for weeks now.
Those activities and other statements made by the union infuriated Holaday, who said yesterday she has been exchanging letters and other correspondence with Antonellis for months.
Holaday said she was fairly outraged by union activities during the Memorial Day parade and graduation exercises. In June, Holaday penned a letter to the union detailing her disgust and asking the organization to stop the protests. In the letter, dated June 16, she also expressed her belief that the union was turning residents against them.
"I do not know what you hope to accomplish by this display of negativity in portraying our local hospital and physicians, and if you expect to generate sympathy for unions, it is working against you," she wrote.
"On Memorial Day, we were walking with veterans and their families to the waterfront to place a wreath for those who died in service of our country. Front and center were your members detracting from the profound and moving nature of this event. And on graduating day for our high school seniors and families, you interrupted the ceremony with multiple flyovers with your banners — it was appalling."
Later, according to the mayor, Antonellis and Holaday met in person. At that meeting, Antonellis asked Holaday whether she could use her influence to somehow bring Anna Jaques Hospital back to the negotiating table regarding potentially hiring the union workers. Holaday said she declined, saying it wasn't her job to act as mediator.
A Homecoming break
Just before the start of Yankee Homecoming, the festival's chairwoman in charge of vendors, Janet Richey, asked both pro- and anti-Anna Jaques Hospital demonstrators to clear out of Market Square's bullnose area for the duration of the annual event.
Richey said both sides agreed, which prompted IBEW Local 103 to move the giant rat out of the bullnose and across the street outside the Firehouse Center.
Near or during the first few days of Homecoming, Holaday then asked the union to remove the inflatable rat from in front of the Firehouse, saying it could present a safety hazard and restrict the flow of pedestrian traffic.
Holaday said she did not ask the union to temporarily stop its protests during Homecoming, rather just to move the rat out of downtown.
The mayor said she was pleased the union went above and beyond what she asked, but added she preferred the union wouldn't return.
"I wish they would leave the city," Holaday said.
Citizens In Support of Anna Jaques Hospital, a pro-hospital group formed by local businessman Michael Roy, meanwhile, remained a presence in the bullnose during Yankee Homecoming, selling banners and lawn signs from a rented booth.
Yesterday, Roy defended the decision to man a booth in Market Square, saying his group wasn't protesting but rather selling its wares just like the dozen or so other vendors.
"They could have done that also," Roy said, referring to IBEW Local 103.
In addition to manning a booth on the bullnose, Citizens In Support of Anna Jaques Hospital had a very visible presence during the entire Homecoming celebration. Dozens of supporters wearing pro-hospital T-shirts were seen throughout the week, and the group donated $500 to Sunday's Yankee Homecoming parade, which they also marched in.
"It would be our greatest wish that we'd go back to our normal lives, but I guess we'll wait and see," Roy said.
A separate protest
The disappearance of IBEW Local 103 protesters early this week coincided with the arrival of another group of Newburyport picketers representing dozens of the roughly 45,000 Verizon workers who went on strike across the northeast and mid-Atlantic states Sunday morning. The 45,000 workers walked off their jobs after months of contract negotiations with Verizon failed to reach a desired conclusion.
About 25 to 30 Verizon employees of the communication giant's landline sectors have been outside Verizon offices on Green Street and Graf Road in Newburyport. They are members of two separate unions: Communications Workers of America and IBEW Local 2321.
Reached yesterday on Green Street, IBEW Local 2321 workers said they had no idea whether IBEW Local 103's decision to clear out of the city and halt its protest of Anna Jaques for a few days was related to their protests.


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Clubhouse Insider Boston Red Sox News
After 17 seasons with Red Sox, Tim Wakefield elects to retire
FORT MYERS -- Tim Wakefield has decided to retire.
After 19 seasons, including the past 17 with the Red Sox, the veteran knuckleballer will call it quits in a 5 p.m. press conference tonight at JetBlue Park. As recently as December, he had expressed a "strong desire" to play one more season, preferably with the Red Sox, and agent Barry Meister said he "would win 15 games somewhere else" if the Sox didn't want him. But the Sox didn't reciprocate with a major-league offer, and last week, Meister told the Herald that Wakefield was mulling his options, including retirement.
Wakefield (Herald photo) -- at 45, the oldest player in the majors last season -- finishes with a 200-180 record and 4.41 ERA in 627 appearances (463 starts) for the Pirates and Red Sox. With the Sox, he notched 186 wins, six shy of matching Roger Clemens and Cy Young for the all-time club record, a mark he admitted would have had great significance to him.
But over the past two seasons, he lost his grip on a permanent spot in the Red Sox' rotation, serving mostly as a swingman and a spot starter when Daisuke Matsuzaka and Clay Buchholz were injured. His final victory, Sept. 13 against the Blue Jays, was the 200th of his career.
Jason Varitek, facing a similar predicament as Wakefield, "is in a position where he's ready to play but he has not made any decisions yet" about whether to continue playing this season, agent Scott Boras said by phone today. The Red Sox have offered a minor-league contract with an invitation to spring training, but after the addition of veteran backup catcher Kelly Shoppach, his chances of making the team would be slim. If Varitek elects to retire, a job within the organization would be a "definite" if he wants to accept it, a major league source said last month.
(Twitter: @ScottLauber)
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Concept of political correctness masks education solutions
What is the problem with our education system? Political correctness hides the problem and therefore the means to address it effectively.
First, many parents are anxious to pass off their parental responsibilities to others. This happens for many reasons: They have to work, child-care responsibilities interfere with their social lives, they wish to escape the burdens of family life, or it is to much trouble to say no.
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Distilling the Distillation of Vision Mobile's Market Sense
Vision Mobile is a UK think tank whose periodic reports are geared to assist mobile developers and other players in the vast mobile ecosystem in making sense of the cacophony of mobile trends. Their reports provide informed guidance that can help devs make the best decision about where to concentrate their marketing efforts.
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Delaney & Bonnie
Delaney & Bonnie
The Best of Delaney & Bonnie
Original Release Date: November 1990
Track Listing
1. Get Ourselves Together
2. When the Battle Is Over
3. Ghetto [*]
4. Piece of My Heart [*]
5. Comin' Home
6. Groupie (Superstar)
7. Things Get Better
8. Where There's a Will, There's a Way
9. That's What My Man Is For [*]
10. I Don't Want to Discuss It
11. Soul Shake
12. Free the People
13. The Love of My Man [*]
14. Will the Circle Be Unbroken
15. Never Ending Song of Love
16. Going Down the Road Feeling Bad
17. Only You Know and I Know
18. Move 'Em Out
John Hartford: ?
Rita Coolidge: Vocals, Choir, Chorus, ?
Steve Cropper: ?
Dave Mason: Guitar, ?
Gram Parsons: ?
Leon Russell: Guitar, Piano, ?
Bonnie Bramlett: Vocals, Choir, Chorus
Delaney Bramlett: Guitar, Guitar (Rhythm), Vocals, Choir, Chorus, Producer, Horn Arrangements
The Memphis Horns: Group
Jim Price: Trombone, Trumpet, Horn Arrangements
Jim Keltner: Percussion, Drums, ?
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Bobby Keys: Saxophone, ?
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Ed Logan: Sax (Tenor)
Andrew Love: Horn, Sax (Tenor)
Bob Mason: Guitar
Tommy McClure: Bass
Jerry McGee: Guitar
Floyd Newman: Sax (Baritone)
Carl Radle: Bass, Guitar (Bass)
Jerry Scheff: Bass
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Jay York: ?
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Blueberry Crumble
Blueberries have more antioxidants than any other popular fruit and help prevent cancer, diabetes, age-related memory loss and are anti-inflammatory. They are also rich in potassium, fibre and vitamins A & C.
"Inflammation is a key driver of all chronic diseases, so blueberries have a host of benefits," says Ann Kulze, MD, of Charleston, S.C.
Interesting Fact: The paint the Shakers used for the woodwork on their houses was made from sage blossoms, indigo, blueberry skins & mixed in milk.
1 – 2 apples
2 cups berries (blue berries, blackberries, Saskatoons, currants or strawberries)
Stevia – light liquid (Sunny Dew is best)
1. Core and slice apples.
2. Simmer apples with a few spoons of water in a covered pot.
3. Mix in berries and simmer a few minutes.
4. Sweeten to taste with stevia.
5. Place berry/apple mixture in a baking dish
1 ½ cups brown rice flour
1 cup rolled oats
1 tsp. salt
1/3 cup vegetable oil
1/4 cup rice syrup
1/4 tsp Stevia – light liquid (Sunny Dew is best)
1. Mix dry ingredients together
2. Mix oil, stevia and rice syrup and add to dry ingredients.
3. Mix thoroughly.
4. Sprinkle on top of fruit
5. Bake at 350º F. in oven for approximately 40 minutes.
Tags: apples, dairy free, gluten free, healthy cooking, healthy dessert, PowerFoods, vegan
Category: Gluten Free, Recipes, Sugar Free Desserts


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My partner has been raving about 2game for the last few weeks so I decided to give it a go, bought Aliens Colonial Marines for him and it arrived just before the release date.
Amazing company, It means we've saved £25 on our first 2 orders rather than buying it from game.co.uk which makes me 1 happy lady!!
This means it gives me an extra £25 to spend on a bag without him knowing!!
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text: Aah, the joys of being a dad. To my wife i am the Mighty Bug Killer, to my daughter in College i am the ATM, to the county tax collector i own an "Estate", to my dentist i make the payments for his Mercedes, to the LBS i am a welcome sight, my family says " You got another bike?', are you nuts?:twitchy::lol::thumb:. But it is all worth it when i go to the Local Hawaiian Shirt store and buy another one that lights up the party!:eek:. When they all gather around to day and wish us a happy fathers day, cook our favorite food, bring us our beverage of choice, sit back in our easy chair and yes we will be" King for a day ". (I hope they don't see that other bike i just saved from the dump). :lol: Happy Fathers Day to all.


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Home | Press Room | Careers | Physicians & Providers | Contact Us
A bowed chest is also called pectus carinatum. It is a protrusion of the chest over the sternum often described as bird-like. Pectus carinatum is usually only a cosmetic defect but can be associated with other genetic diseases.


text: home >> news DEAL WITH HLS, THEN EXPECT PROTESTS Saturday, 30th July GREAT day of home demos engaged in by Friends of Animals United New Jersey (FAUN) members from both the NY & NJ contingents of the group, highlighted with a surprise "cherrybusting" visit to AstraZeneca Investor Relations bigwig Jorgen Winroth. Apparently some of the upper crusties residing in this posh Upper West Side bldg were infuriated enough with our "street rabble" as to confront us, call police for "disturbing the peace" etc, only to find themselves dismissed/overrun via a wall of chanting echoing throughout the neighborhood, calling Winroth out for his $take in innumberable bloody deeds. Brilliant poetic chant spontaneously invented by activist Linda G. permeated our visit to Pfizer VP Corp. rep Elizabeth Golden: "Where could an animal abuser be? .. Elizabeth Golden , 22C!" Of course we said hello to old pals Andrew Baker, CEO of Huntingdon Life Sciences and Lamberto Andreotti, CEO of Bristol-Myers Squibb in loud, vocal, militant appearances. Despite the heat, crowds & traffic, FAUN activists came together for a powerful day, with thousands of leaflets given out across 25 blocks of NYC!


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Katie Ledecky
Discover topics related to Katie Ledecky on FoxSports.com. Find the most recent sports news and videos about Katie Ledecky
Ledecky crushes world record
Updated Jul 30, 2013 3:14 PM ET BARCELONA, Spain (AP After swimming nearly a mile, Katie Ledecky knew it was time to get going. Did she ever. WORLD CLASS The world's best are chasing gold in the world championships. Check
Ledecky named SportsWoman of Year
Olympic champion swimmer Katie Ledecky has won the U.S. Olympic Committee's SportsWoman of the Year award. The award was announced Thursday. It will be presented
Ruta Meilutyte sets record
in the semifinals when her right leg slipped while pushing off the wall. Another young American, 16-year-old Katie Ledecky , followed up her gold medal in the 400 freestyle by easily qualifying for the 1,500 free final. "It's so incredible
Efimova aces breaststroke
Franklin will later aim for her fifth gold of the competition, in the 200 backstroke final, and fellow American teenager Katie Ledecky will bid for a world record in the 800 free. Finals are also scheduled in the men's 50 free and 100 butterfly and
Ledecky wins 4th gold at worlds
Katie Ledecky capped a brilliant world swimming championships with her fourth gold medal and second world record Saturday. The 16-year-old
Franklin shoots for more gold
right back for the 200. It's nice that I have the final before the semi, for sure." Meanwhile, American teammate Katie Ledecky led the 800 freestyle in 8:20.65 as she goes for her fourth gold in her final event of the meet. Also on Day 6
Franklin ties record with fifth gold
world's best chased gold in London. Look back at all the action . The U.S. women's coach gives his vote to Katie Ledecky . "She's not normal," said Dave Salo, marveling at another world-record performance by the 16-year-old
Franklin makes history at worlds
shoulders." Franklin was not even chosen as the top female swimmer of the meet. That award went to fellow American Katie Ledecky , who won four golds and set two world records. She edged out Franklin based on a formula that doesn't count the
Ledecky storms through opening swim
Canada was second with 3:45.74. Olympic silver medalist Park Tae-hwan skipped the meet. Also, American teenager Katie Ledecky led the women's 400 free heats by a large margin, touching in 4:03.05. And the United States led both the men's
Lochte wins 200m IM at worlds
feels like himself again. Looks more like himself, too, with that gold medal around his neck. Missy Franklin and Katie Ledecky have felt this way all along. They're piling up so much gold they might need bigger suitcases to get home. Lochte


text:
Found October 02, 2012 on
Redlegs Review:
Mat Latos,
Scott Rolen,
Dioner Navarro,
Ryan Hanigan,
Jay Bruce,
Sam Lecure,
Sean Marshall,
Jonathan Broxton,
Aroldis Chapman,
Drew Stubbs,
Homer Bailey,
Adam Wainwright
TEAMS: Cincinnati Reds, St. Louis Cardinals
TEAMS: Cincinnati Reds, St. Louis Cardinals
The Reds (97-64) remained in contention to earn the National League's No. 1 seed by defeating the host Cardinals (87-74), 3-1, on Tuesday night.
Mat Latos improved to 14-4 with considerable help from his bullpen.
Meanwhile, Cincinnati's offense was fueled by Scott Rolen and Dioner Navarro, who both tallied a pair of hits in the contest. One of Rolen's was of the four-base variety -- his 8th of the 2012 campaign.
Read on for the full recap of the good, bad and notables:
The Good:
+ Rolen had a good night by going 2-4 at the dish. His solo homer helped raise his RBI total to 39.
+ Navarro was also 2-4 with an RBI. He's proved to be a valuable backup to Ryan Hanigan since coming up from Louisville.
+ Jay Bruce notched his 99th RBI with a run-scoring single in the sixth. He could very well get to the 100-RBI mark in tomorrow's season finale.
+ The bullpen. The combination of Sam LeCure, Sean Marshall, Jonathan Broxton and Aroldis Chapman pitched f...
Original Story:
Reds will start playoffs on road despite having better record
Reds set their rotation for NLDS
Navarro getting his kicks with the Reds
Homer Bailey named National League Player of the Week
Rolen homer lifts Reds over Cards
Time set for Game One of the Reds-Giants NLDS
Reds' Baker feels 'truly blessed'
Baker returns from mini-stroke
Game 162: Reds 0, Cardinals 1
Reds announce starting rotation for playoffs
Reds have two days to capture home-field
Reds deny Cardinals, keep magic number at 1
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Cards clinch wild card tie with win over Reds
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