21-11051-lgb doc 91 filed 07/19/21 entered 07/19/21 01:42

Hearing Date and Time: August 17, 2021 at 10:00 a.m. (Eastern Time)

Objection Deadline: August 10, 2021 at 4:00 p.m. (Eastern Time)

Benjamin Mintz

Lucas B. Barrett

Arnold & Porter Kaye Scholer LLP

250 W. 55th Street

New York, NY 10019-9710

Telephone: (212) 836-8000

Facsimile: (212) 836-8689

-and-

Seth J. Kleinman

Arnold & Porter Kaye Scholer LLP

70 West Madison Street, Suite 4200

Chicago, IL 60602-4321

Telephone: (312) 583-2300

Facsimile: (312) 583-2360

Attorneys for the Kyrgyz Republic

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

In re:

Kumtor Gold Company CJSC and Kumtor

Operating Company CJSC,1

Debtors.

Chapter 11

Case No. 21-11051 (LGB)

(Jointly Administered)

NOTICE OF MOTION OF THE KYRGYZ REPUBLIC

TO DISMISS CHAPTER 11 BANKRUPTCY CASES

PLEASE TAKE NOTICE that on the date hereof, the government of the Kyrgyz Republic

(the “Kyrgyz Republic”), by and through its undersigned counsel, filed the Motion of the Kyrgyz

Republic to Dismiss Chapter 11 Bankruptcy Cases (the “Motion to Dismiss”).

1 The Debtors’ corporate headquarters is located at 24 Ibraimova Street, 720001, Bishkek, the Kyrgyz Republic.

21-11051-lgb Doc 91 Filed 07/19/21 Entered 07/19/21 01:42:41 Main Document Pg 1 of 55

2

PLEASE TAKE FURTHER NOTICE that the undersigned counsel will present the

Motion to Dismiss to the Honorable Lisa G. Beckerman, United States Bankruptcy Court for the

Southern District of New York (the “Court”) at a hearing to be held on August 17, 2021 at 10:00

a.m. (Eastern Time) (the “Hearing”), or as soon thereafter as counsel may be heard. In light of

the COVID-19 pandemic and in accordance with the Court’s General Order M-543, dated March

20, 2020, the Hearing will only be conducted virtually. Parties should not appear in person.

Procedures for participation in the hearing will be filed at a later date.

PLEASE TAKE FURTHER NOTICE that responses or objections (“Objections”), if

any, to the relief requested in the Motion to Dismiss must: (a) be in writing; (b) conform to the

Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), the Local Bankruptcy Rules

for the Southern District of New York (the “Local Rules”), all General Orders applicable to

chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York; (c)

be filed electronically with the Court on the docket of In re Kumtor Gold Company CJSC and

Kumtor Operating Company CJSC, Case No. 21-11051 (LGB) by registered users of the Court’s

electronic filing system and served upon (i) the Chambers of the Honorable Lisa G. Beckman,

United States Bankruptcy Court for the Southern District of New York, One Bowling Green, New

York, New York 10004; (ii) Arnold & Porter Kaye Scholer LLP, counsel to the Kyrgyz Republic;

(iii) Sullivan & Cromwell LLP, proposed counsel to the Debtors; (iv) the Office of the United

States Trustee for the Southern District of New York; (v) the parties identified on the Debtors’

consolidated list of 30 largest unsecured creditors; and (vi) to the extent not listed herein, those

parties requesting notice pursuant to Bankruptcy Rule 2002, so as to be actually received no later

than August 10, 2021 at 4:00 p.m. (Eastern Time).


3

PLEASE TAKE FURTHER NOTICE that only those Objections that are timely filed,

served and received will be considered at the Hearing. Failure to file and/or serve a timely

Objection may result in the entry of an order granting the relief requested in the Motion to

Dismiss without further notice. Failure to attend the Hearing in person or by counsel may

result in relief being granted or denied upon default. In the event that no Objection to the

Motion to Dismiss is timely filed and served, the relief requested in the Motion to Dismiss

may be granted without a hearing before the Court.

Dated: July 18, 2021

By: /s/ Benjamin Mintz

ARNOLD & PORTER KAYE SCHOLER LLP

Benjamin Mintz

Lucas B. Barrett

250 W. 55th Street

New York, NY 10019-9710

Telephone: (212) 836-8000

Facsimile: (212) 836-8689

Email: [email protected]

[email protected]

-and-

Seth J. Kleinman



Telephone: (312) 583-2300

Facsimile: (312) 583-2360




4



In re:



Debtors.

Chapter 11

Case No. 21-11051 (LGB)


MOTION OF THE KYRGYZ REPUBLIC TO DISMISS

CHAPTER 11 BANKRUPTCY CASES

1 The Debtors’ corporate headquarters is located at 24 Ibraimova Street, 720001, Bishkek, the Kyrgyz Republic.


i

TABLE OF CONTENTS

Page

PRELIMINARY STATEMENT .....................................................................................................1

JURISDICTION, VENUE, AND STATUTORY BASES ..............................................................3

RELEVANT BACKGROUND .......................................................................................................4

A. The Debtors ..............................................................................................................4

B. Events in the Kyrgyz Republic Leading Up to the Chapter 11 Filing .....................5

C. The Chapter 11 Cases ..............................................................................................8

REQUESTED COURT ACTION..................................................................................................12

BASIS FOR COURT ACTION REQUESTED ............................................................................12

A. The Debtors’ Bankruptcy Cases Must be Dismissed Because Centerra as

Sole Shareholder Lacks the Authority to Commence these Cases Under

the Debtors’ Charters and Applicable Kyrgyz Law ...............................................12

1. Centerra Lacked the Requisite Corporate Authority to File these

Chapter 11 Cases........................................................................................12

2. The External Management Legislation Had Suspended KGC’s

Board and General Meeting Prior to When Centerra Held Its

Purported General Meeting ........................................................................15

B. Cause Also Exists to Dismiss Pursuant to Section 1112(b) ...................................16

1. The Debtors’ Bankruptcy Filing was in Bad Faith ....................................16

a. The Chapter 11 Cases are a Two-Party Dispute ............................17

b. The Chapter 11 Cases Lack a Proper Reorganization Purpose ......17

2. The Debtors are Unable to Effectuate a Chapter 11 Plan ..........................19

C. The Court Should Exercise its Discretion to Abstain and Grant the Motion

Under Section 305(a)(1) of the Bankruptcy Code .................................................26

1. Dismissal Under Section 305 is Appropriate Under the Second

Circuit’s Seven-Factor Test .......................................................................28

2. The Court Should Dismiss the Chapter 11 Cases on the Grounds of

International Comity ..................................................................................30


ii

3. Act of State Doctrine .................................................................................35

D. The Court Should Dismiss the Bankruptcy Cases on Grounds of Forum

Non Conveniens .....................................................................................................36


iii

TABLE OF AUTHORITIES

Page(s)

Cases

Allstate Life Ins. Co. v. Linter Grp. Ltd.,

994 F.2d 996 (2d Cir. 1993)...............................................................................................30, 31

Associated Container Transp. (Australia) Ltd. v. United States,

705 F.2d 53 (2d Cir. 1983).......................................................................................................35

Beierwaltes v. L’Office Federale De La Culture De La Confederation Suisse,

999 F.3d 808 (2d Cir. 2021).....................................................................................................19

C-TC 9th Ave. P’ship v. Norton Co. (In re C-TC 9th Ave. P’ship),

113 F.3d 1304 (2d Cir. 1997)...................................................................................................15

DB Cap. Holdings, LLC v. Aspen HH Ventures, LLC (In re DB Cap. Holdings, LLC),

Nos. Co-10-046, 10-23242, 2010 WL 4925811 (B.A.P. 10th Cir. Dec. 6, 2010) .............14, 15

Finanz AG Zurich v. Banco Economico S.A.,

192 F.3d 240 (2d Cir. 1999).....................................................................................................30

First Nat. City Bank v. Banco Nacional de Cuba,

406 U.S. 759, 92 S. Ct. 1808, 32 L. Ed. 2d 466 (1972) ...........................................................34

Food & Drug Admin. v. Brown & Williamson Tobacco Corp.,

529 U.S. 120 (2000) .................................................................................................................20

Fraternal Composite Servs., Inc. v. Karczewski,

315 B.R. 253 (N.D.N.Y. 2004) ................................................................................................17

Goss Int’l Corp. v. Man Roland Druckmaschinen Aktiengesellschaft,

491 F.3d 355 (8th Cir. 2007) ...................................................................................................30

Gucci Am., Inc. v. Weixing Li,

768 F.3d 122 (2d Cir. 2014).....................................................................................................31

Hilton v. Guyot,

159 U.S. 113 (1895) .................................................................................................................29

Hoffman v. Conn. Dep’t of Income Maint.,

492 U.S. 96 (1989) ...................................................................................................................22

In re 801 S. Wells St. Ltd. Pshp.,

192 B.R. 718 (Bankr. N.D. Ill. 1996) ......................................................................................28


iv

In re Arcapita Bank B.S.C.(c),

575 B.R. 229 (Bankr. S.D.N.Y. 2017) ...............................................................................30, 31

In re Argus Grp. 1700, Inc.,

206 B.R. 737 (Bankr. E.D. Pa. 1996), aff’d sub nom. Argus Grp. 1700, Inc. v.

Steinman, 206 B.R. 757 (E.D. Pa. 1997) ...........................................................................27, 28

In re Commodore Int’l, Ltd.,

242 B.R. 243 (Bankr. S.D.N.Y. 1999), aff’d, No. 00CIV.1679(SAS), 2000

WL 977681 (S.D.N.Y. July 17, 2000) .....................................................................................36

In re Compania de Alimentos Fargo, S.A.,

376 B.R. 427 (Bankr. S.D.N.Y. 2007) ...............................................................................28, 29

In re DCNC North Carolina I, LLC,

407 B.R. 651 (Bankr. E.D.Pa. 2009) .......................................................................................18

In re EAL (Delaware) Corp.,

No. 93-578-SLR, 1994 WL 828320 (D. Del. Aug. 3, 1994) .............................................20, 22

In re First Fin. Enters., Inc.,

99 B.R. 751 (Bankr. W.D.N.Y. 1989) .....................................................................................18

In re Gen. Growth Prop., Inc.,

409 B.R. 43 (Bankr. S.D.N.Y. 2009) .......................................................................................15

In re Globo Comunicacoes e Participacoes S.A.,

317 B.R. 235 (S.D.N.Y. 2004) .................................................................................................25

In re Gucci,

174 B.R. 401 (Bankr. S.D.N.Y.1994) ......................................................................................15

In re Gucci,

309 B.R. 679 (S.D.N.Y. 2004) .................................................................................................24

In re HBA E., Inc.,

87 B.R. 248 (Bankr. E.D.N.Y. 1988) .................................................................................16, 18

In re Hellas Telecomms. (Luxembourg) II SCA,

555 B.R. 323 (Bankr. S.D.N.Y 2016) ......................................................................................37

In re Int’l Admin. Servs., Inc.,

211 B.R. 88 (Bankr.M.D.Fla.1997) .........................................................................................24

In re Integrated Telecom Express, Inc.,

384 F.3d 108 (3d Cir. 2004).....................................................................................................17


v

In re Landmark Cap. Co.,

27 B.R. 273 (Bankr. D. Ariz. 1983) ...................................................................................16, 18

In re Lehman Bros. Holdings Inc.,

544 B.R. 16 (Bankr. S.D.N.Y. 2015) .......................................................................................24

In re Maxwell Commc’n Corp. plc by Homan,

93 F.3d 1036 (2d Cir. 1996).........................................................................................29, 30, 33

In re MF Glob. Holdings Ltd.,

465 B.R. 736 (Bankr. S.D.N.Y. 2012) .....................................................................................15

In re Monitor Single Lift I, Ltd.,

381 B.R. 455 (Bankr. S.D.N.Y. 2008) .........................................................................25, 26, 27

In re National Rifle Association of America and Sea Girt LLC,

Case No. 21 30085 (HDH) (Bankr. N.D. Tex. May 11, 2021) ................................................17

In re Navient Sols.,

LLC, 625 B.R. 801 (Bankr. S.D.N.Y. 2021) ...........................................................................27

In re Picard, Tr. for Liquidation of Bernard L. Madoff Inv. Sec. LLC,

917 F.3d 85 (2d Cir. 2019), cert. denied sub nom. HSBC Holdings PLC v.

Picard, 140 S. Ct. 2824, 207 L. Ed. 2d 157 (2020) .................................................................30

In re Schur Mgmt. Co., Ltd.,

323 B.R. 123 (Bankr. S.D.N.Y. 2005) ...............................................................................25, 28

In re Stavola/Manson Electric Co., Inc.,

94 B.R. 21 (Bankr. D. Ct. 1988) ........................................................................................11, 14

In re TPG Troy, LLC,

492 B.R. 150 (Bankr. S.D.N.Y. 2013), subsequently aff’d, 793 F.3d 228

(2d Cir. 2015) ...........................................................................................................................27

In re Van Owen Car Wash, Inc.,

82 B.R. 671 (Bankr. C.D. Cal. 1988) .......................................................................................16

In re Yukos Oil Co.,

321 B.R. 396 (Bankr. S.D. Tex. 2005) ....................................................................................24

JP Morgan Chase Bank v. Altos Hornos de Mexico, S.A. de C.V.,

412 F.3d 418 (2d Cir. 2005)...............................................................................................30, 34

Little Creek Dev. Co. v. Commonwealth Mortgage Corp. (In re Little Creek Dev. Co.),

779 F2d 1068 (5th Cir. 1986) ..................................................................................................15


vi

Magi XXI, Inc. v. Sato della Citta del Vaticano,

714 F.3d 714 (2d Cir. 2013).....................................................................................................36

Matter of Axona Int’l Credit & Com. Ltd. (Formerly Bancom Int’l Ltd.),

924 F.2d 31 (2d Cir. 1991).......................................................................................................25

Mobil Cerro Negro, Ltd. v. Bolivarian Republic of Venezuela,

863 F.3d 96 (2d Cir. 2017).......................................................................................................19

Monegasque De Reassurances S.A.M. v. Nak Naftogaz of Ukraine,

311 F.3d 488 (2d Cir. 2002).....................................................................................................37

Monsour Med. Ctr., Inc. v. Stein (In re Monsour Med. Ctr., Inc.),

154 B.R. 201 (Bankr. W.D. Pa. 1993) .....................................................................................18

Morton v. Mancari,

417 U.S. 535 (1974) .................................................................................................................21

New York Times Co. v. U.S. Dep’t of Just.,

756 F.3d 100, 137 (2d Cir.), opinion amended on denial of reh’g, 758 F.3d

436 (2d Cir. 2014), supplemented, 762 F.3d 233 (2d Cir. 2014) .............................................23

NML Cap.,

573 U.S. at 141 (2014) .............................................................................................................20

Oetjen v. Cent. Leather Co.,

246 U.S. 297 (1918) .................................................................................................................34

Piper Aircraft Co. v. Reyno,

454 U.S. 235 (1981) .................................................................................................................36

Price v. Gurney,

324 U.S. 100 65 S. Ct. 513, 89 L. Ed. 776 (1945) .............................................................11, 14

Royal & Sun All. Ins. Co. of Canada v. Century Int’l Arms, Inc.,

466 F.3d 88 (2d Cir. 2006).......................................................................................................31

Scottish Air Int’l Inc. v. British Caledonian Grp., PLC,

81 F.3d 1224 (2d Cir. 1996)...............................................................................................37, 39

SGL Carbon Corp.,

200 F.3d 154 (3d Cir. 1999)....................................................................................................18

Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp.,

549 U.S. 422, 127 S. Ct. 1184, 167 L. Ed. 2d 15 (2007) .........................................................36

Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Ct. for S. Dist. of Iowa,

482 U.S. 522 (1987) .................................................................................................................29


vii

Strategic Value Master Fund, Ltd. v. Cargill Fin. Servs., Corp.,

421 F. Supp. 2d 741 (S.D.N.Y. 2006)..........................................................................36, 37, 39

Underhill v. Hernandez,

168 U.S. 250 (1897) .................................................................................................................35

United States v. Nordic Village, Inc.,

112 S. Ct. 1011 (1992) .............................................................................................................22

W.S. Kirkpatrick & Co. v. Envtl. Tectonics Corp., Int’l,

493 U.S. 400 (1990) .................................................................................................................35

Wiwa v. Royal Dutch Petroleum Co.,

226 F. 3d 88 (2d Cir. 2000)......................................................................................................36

Statutes

11 U.S.C. § 101(27) .................................................................................................................19, 21

11 U.S.C. § 105(a) .....................................................................................................................3, 10

11 U.S.C. § 106 ...................................................................................................................... passim

11 U.S.C. § 106(a) ...................................................................................................................19, 20

11 U.S.C. § 305(a) ...........................................................................................................................2

11 U.S.C. § 305(a)(1) ............................................................................................................. passim

11 U.S.C. § 349(a) .........................................................................................................................11

11 U.S.C. § 1112(b) ............................................................................................................... passim

28 U.S.C. § 157 ................................................................................................................................2

28 U.S.C. § 1330 ............................................................................................................3, 10, 19, 22

28 U.S.C. § 1330(b) .......................................................................................................................22

28 U.S.C. § 1332(a) ...................................................................................................................3, 10

28 U.S.C. § 1334 ..............................................................................................................................2

28 U.S.C. § 1409 ..............................................................................................................................2

28 U.S.C. § 1602 ............................................................................................................................20

28 U.S.C. § 1604 .................................................................................................................... passim


viii

Other Authorities

A. Scalia & B. Garner, Reading Law 327 (2012) ..........................................................................20


MOTION OF THE KYRGYZ REPUBLIC TO DISMISS

CHAPTER 11 BANKRUPTCY CASES3

The government of the Kyrgyz Republic (the “Kyrgyz Republic”), by and through its

undersigned counsel, files this motion (the “Motion”) to dismiss the chapter 11 bankruptcy cases

(the “Chapter 11 Cases”) of Kumtor Gold Company CJCS (“KGC”) and Kumtor Operating

Company CJSC (“KOC”, and together with KGC, the “Debtors”) pursuant to 11 U.S.C. §§ 1112

and 305(a), 28 U.S.C. §§ 1330, 1332(a) and 1604, and/or on the grounds of international comity

and the Act of State doctrine, and respectfully represents as follows:

PRELIMINARY STATEMENT

1. The relevant facts are not in dispute. The Petitions were purportedly authorized by

Centerra in its capacity as sole shareholder of each of the Debtors at an extraordinary general

shareholders meeting (improperly) called by Centerra on May 31, 2021. However, this so-called

“approval” failed in numerous ways to comply with both the Debtors’ Charters and Kyrgyz law,

including (i) with respect to both KGC and KOC, their Charters dictated certain requirements for

initiating and conducting a general meeting which were not complied with, and (ii) with respect to

3 The submission of this Motion (and the supporting Declaration of Benjamin Mintz (the “Mintz Declaration”),

the supporting Declaration of Natalia Alenkina (the “Alenkina Declaration”) and the supporting Declaration of

Bolot Idrisov (the “Idirisov Declaration” and together with the Mintz Declaration and the Alenkina Declaration

the “Declarations”)) shall not in any way constitute a submission by the Kyrgyz Republic to the jurisdiction or

authority of the Bankruptcy Court for the resolution of any matter involving the Kyrgyz Republic and the Debtors.

The use of the term “Debtors” herein is for convenience purposes only and is not intended to be deemed consent

or recognition of KGC and KOC as validly filed debtors or debtors-in-possession. Nor is this Motion (and the

supporting Declarations) an admission that the Bankruptcy Court is the appropriate forum for disputes involving

the Kyrgyz Republic and the Debtors. The filing of this Motion (and the supporting Declarations) shall not

constitute a waiver or consent by the Kyrgyz Republic of any rights, claims, actions, defenses setoffs,

recoupments, or other matters to which the Kyrgyz Republic is entitled under any agreements or at law or in

equity. All of the foregoing rights are expressly reserved and preserved, without exception, and without the

intention or purpose of conceding jurisdiction in any way by this filing or by any other participation in these

Chapter 11 Cases. The Kyrgyz Republic expressly reserves all rights at law and equity to assert the jurisdiction

of the courts of the Kyrgyz Republic, or arbitration in Stockholm, as applicable, with respect to any disputes

involving the Kyrgyz Republic and the Debtors. The Kyrgyz Republic expressly reserves all rights at law and

equity it may have with respect to sovereign immunity or otherwise under the Foreign Sovereign Immunities Act

of 1976.


2

KGC, the powers of Centerra as shareholder had already been suspended under Kyrgyz law before

the improper general meeting occurred and the Filing Resolutions and Petitions were authorized.

2. Beyond the lack of requisite corporate authority, which on its own warrants dismissal,

the facts here merit dismissal of the cases as a bad faith filing pursuant to section 1112(b) of the

Bankruptcy Code. The key fact for this Court to consider is that the Debtors are not insolvent—

indeed their assets exceed their debts by nearly a billion dollar —and these cases clearly and

admittedly (by the Debtors) serve no legitimate restructuring purpose. Instead, Centerra has abused

the filings in an effort to disregard Kyrgyz law (laws to which Centerra and the Debtors voluntarily

submitted) and to exert maximum leverage over the Kyrgyz Republic in legal matters already

commenced by Centerra in Sweden (pursuant to an arbitration) and Canada (where Centerra is

formed) for substantive relief. Indeed, rather than supporting continued operations of the mine,

Centerra has taken affirmative steps to undermine and interfere with the ability of the Debtors and

the External Manager to operate the mine, including threatening vendors and suppliers. This is

contrary to the interests of the Debtors, their creditors and employees and evidences Centerra’s

bad faith and self-motivation to use the Debtors and the Chapter 11 Cases to advance its own

interests to the detriment of the Debtors.

3. These Chapter 11 Cases should also be dismissed on grounds of abstention pursuant to

section 305(a) of the Bankruptcy Code as well as codified and legal precepts of international

comity. The Debtors are Kyrgyz companies centralized in the Kyrgyz Republic and governed by

Kyrgyz law—all operations, substantially all assets, substantially all employees, and most

creditors of the Debtors are located in the Kyrgyz Republic. KGC is the largest private sector


3

employer and taxpayer in the Kyrgyz Republic and accounts for over 10% of its GDP.4 The

Debtors’ connections to the United States are plainly de minimis and limited to a $50,000 bank

account and a small handful of U.S.-based creditors whose claims are less than 0.5% of the total

claims pool. Given the insignificant connections between the U.S and these Debtors, as well as

practical constraints on this Court’s ability to fashion enforceable relief by virtue of Kyrgyz law,

the Foreign Sovereign Immunities Act and the Act of State doctrine, dismissal is warranted.

4. These Chapter 11 Cases are an unfortunate side-show commenced in bad-faith and

strategically implemented by Centerra in an effort to protect itself (not the Debtors) from the

consequences of its and the Debtors’ serious violations of Krygyz law (including occupational

health, environmental, and industrial safety laws). This Court should no longer countenance being

used as an instrument of obstruction by Centerra when venues of appropriate authority and

jurisdiction already exist to adjudicate these disputes.

JURISDICTION, VENUE, AND STATUTORY BASES

5. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and 1334.

Venue in this Court is proper pursuant to 28 U.S.C. §§ 1408 and 1409. This is a core proceeding

pursuant to 28 U.S.C. § 157(b). The statutory predicates for the action sought in the Motion are

11 U.S.C. §§ 105(a), 305(a)(1) and/or 1112(b), and 28 U.S.C. §§ 1330, 1332(a) and 1604. This

Motion is consistent with the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”),

and the Local Bankruptcy Rules for the Southern District of New York (the “Local Rules”).5

4 See Mintz Declaration Exhibit A, KGC 2020 Fourth Quarter and 2020 Year-end Results, at 6; Contribution to the

Economy, Kumtor Gold, https://www.kumtor.kg/en/contribution-to-the-kyrgyz-economy/ (last visited July 17,

2021). 5 As set forth herein, the Kyrgyz Republic is challenging this Court’s jurisdiction on a number of grounds, and is

also challenging that venue is appropriate in this Court. However, the Kyrgyz Republic concedes that this Court

has jurisdiction to take the actions requested in this Motion, and that venue is properly in this Court for the

purposes of this Motion.


https://www.kumtor.kg/en/contribution-to-the-kyrgyz-economy/

4

RELEVANT BACKGROUND6

A. The Debtors

6. The Debtors are both closed joint stock companies organized under and in accordance

with the laws of the Kyrgyz Republic.7 The Debtors are each 100% owned by Centerra Gold Inc.

(“Centerra”), a Canadian company.

7. KGC is the sole owner and operator of the Kumtor gold mine (the “Kumtor Mine”).

KOC previously operated the mine but is currently a non-operational entity that remains party to

certain agreements related to Kumtor Mine’s operations.8 The Debtors run a profitable and solvent

business, with assets of $1.14 billion and liabilities of approximately $148 million. Id. Exhibit F.

All of the seven premises from which the Debtors operate are located in the Kyrgyz Republic,

including the Kumtor Mine. Id. Exhibit H. The Kumtor Mine is a substantial operation with nearly

3,000 employees.9 The vast majority of these employees work locally at the Kumtor Mine.10

Approximately 98.5% of Kumtor Mine employees are citizens of the Kyrgyz Republic.11 None of

the Debtors’ thirty largest unsecured creditors are located in the United States. Desjardins

Declaration, at Exhibit C. Other than a United States bank account with less than $50,000 in it as

of May 31, 2021, all of KGC’s assets are located in the Kyrgyz Republic, including the seven

6 The Debtors have recited a number of facts with respect to the historical relationship among the Debtors, the

Kyrgyz Republic, and Centerra. While the Kyrgyz Republic disputes many of the characterizations in the Debtors’

recitations, these facts and disputes are not relevant to this Motion. 7 KGC is organized pursuant to the Charter of the Closed Joint Stock Company Kumtor Gold Company, amended

and restated as of March 22, 2004, May 22, 2013, and August 20, 2013, Alenkina Declaration Exhibit K (as

amended, restated, or otherwise modified, the “KGC Charter”). KOC is organized pursuant to the Charter of the

Closed Joint Stock Company Kumtor Operating Company, amended and restated as of June 5, 2004, May 22,

2013, and August 20, 2013, Alenkina Declaration Exhibit P (as amended, restated or otherwise modified, the

“KOC Charter”, and together with the KGC Charter, the “Charters”). 8 Declaration of Daniel Desjardins in Support of the Debtors’ Chapter 11 Petitions and First Day Pleadings [Docket

No. 9] (“Desjardins Declaration”) ¶ 7. 9 Second Chapter 11 Monthly Operating Report [Docket. No. 84] (KGC); Second Chapter 11 Monthly Operating

Report [Docket. No. 85] (KOC). 10 Transcript of First Day Hearing in Case No. 21-11051 (LGB), held June 8, 2021, Mintz Declaration Exhibit G

(“First Day Hearing Transcript”) 12:22-24. 11 Mintz Declaration Exhibit B Centerra Gold 2020 Annual Information Form March 15, 2021, at 39.


5

premises from which the Debtors operate the mine.12 There are only fifteen United States creditors

listed in the Debtors’ schedules and their claims aggregate less than $350,000 of the $71.4 million

in claims (or less than 0.5%). Id. at 38-42. Moreover, all of the current and former auditors,

accountants, and bookkeepers identified in the Debtors’ schedules are in the Kyrgyz Republic.13

B. Events in the Kyrgyz Republic Leading Up to the Chapter 11 Filing

8. On February 17, 2021, the Parliament of the Kyrgyz Republic (the “Jogorku Kenesh”)

issued Resolution No. 4405-VI to form a temporary parliamentary commission to, in part, verify

that the Debtors were in compliance with certain resolutions issued by the Jogorku Kenesh and the

Kyrgyz Republic related to occupational health, environmental, and industrial safety at the Kumtor

Mine. On February 24, 2021, the designation of the commission was changed to a state commission

(the “State Commission”) and was provided with support from the Kyrgyz Republic. The State

Commission presented preliminary findings in a report provided to the Jogorku Kenesh.14

9. On May 6, 2021, the Jogorku Kenesh adopted the Law of the Kyrgyz Republic No. 62

“Amending certain legislative acts of the Kyrgyz Republic” (Alenkina Declaration Exhibit C) (the

“Temporary Management Law”), which amended the Law of the Kyrgyz Republic “On Joint-

Stock Companies” (the “Law on Joint-Stock Companies”) to provide for the imposition of

temporary external management in case of violations by a company of Kyrgyz occupational health,

12 Schedule of Assets and Liabilities for Kumtor Gold Company CJSC (Case No. 21-11051(LGB)) [Docket No. 59]

(hereinafter “KGC Schedules of Assets and Liabilities”) at 13, 29. 13 Statement of Financial Affairs for Kumtor Gold Company CJSC (Case No. 21-11051(LGB)) [Docket No. 60], at

13, 68. The Kumtor Mine’s sole output is partially refined gold (gold doré), all of which is purchased by

Kyrgyzaltyn JSC (“Kyrgyzaltyn”), a state-owned corporation incorporated under the laws of the Kyrgyz

Republic and the largest shareholder of Centerra. Desjardins Declaration ¶ 10. Kyrgyzaltyn purchases the gold

doré from the Debtors for refining and ultimate sale outside the Kyrgyz Republic. Desjardins Declaration ¶ 9. 14 Alenkina Declaration, at 5-6.


6

environmental, and industrial safety regulations in order to protect against threats “to the life or

health of people working or living in the area of influence.”15

10. Based upon the findings contained in the State Commission’s report, the Cabinet of

Ministers of the Kyrgyz Republic issued a decree on May 17, 2021 that set forth the procedures to

be implemented in the event a temporary external manager is appointed to a company (Alenkina

Declaration Exhibit D) (the “External Manager Procedure Decree,” and the annex attached

thereto the “Procedure of Appointment of a Temporary External Manager”). Alenkina

Declaration, at 6-7. On the same day, the Jogorku Kenesh adopted a resolution instructing the

Cabinet of Ministers to introduce temporary external management at KGC and to appoint a

temporary external manager for KGC (Alenkina Declaration Exhibit E) (the “Jogorku Kenesh

External Management Resolution”). Alenkina Declaration, at 3. The Cabinet of Ministers of the

Kyrgyz Republic then issued Order No. 2-R, which required the appointment of temporary external

management over KGC (Alenkina Declaration Exhibit F) (the “External Management Order”).

Alenkina Declaration, at 3-4.

11. On May 17, 2021, Mr. Tengiz Bolturuk was appointed Temporary External Manager of

KGC (the “External Manager”) by order of the Chairman of the Kyrgyz Republic Cabinet of

Ministers (Alenkina Declaration Exhibit G) (the “External Manager Order”, and together with

the Temporary Management Law, the External Manager Procedure Decree, the Jogorku Kenesh

External Management Resolution, Procedure of Appointment of a Temporary External Manager,

and the External Management Order, the “External Management Legislation”). Alenkina

Declaration, at 3-4. By May 21, 2021, the External Manager and his team of managers were

operating KGC and the Kumtor Mine (the “Governance Action,” as used herein to describe the

15 See Alenkina Declaration Exhibit C. The Temporary Management Law received presidential consent on May 12,

2021. Alenkina Declaration, at 8.


7

effects of the External Management Legislation and the appointment of the External Manager) in

accordance with the External Management Legislation.

12. The External Manager was installed in response to cited violations of Kyrgyz Republic

occupational health, environmental, and industrial safety legislation at the Kumtor Mine. The

violations included, among others, (i) Centerra’s disablement of systems monitoring the stability

and movement of active glaciers in close proximity to the Kumtor Mine; (ii) subsoil use violations

that endangered the safety of mine employees and the local population; and (iii) subsoil and other

environmental pollution. Alenkina Declaration, at 7. The disablement of systems monitoring the

stability and movement of active glaciers occurred on May 15, 2021, when KGC employees’

access to the Kumtor Mine’s information technology system (the “IT System”) was shut off. The

IT System contains all historical, geological, mining, and safety information for the Kumtor Mine,

including monitoring and early warning systems.16 Access to the IT System was restored through

a difficult and time-consuming manual process. Idirisov Declaration, at 3.

13. Pursuant to the Temporary Management Law, upon the appointment of an external

manager, the powers of the management bodies (including the KGC Board and general

shareholders meeting) were suspended for the period the external manager remains in place, and

the external manager is vested with the power of the executive body of the company. Alenkina

Declaration, at 9-10. During the term of external management, shareholders of a company are not

permitted to interfere with the daily management and operations of the company, including giving

direct instructions, orders or any other type of direction, including a request or recommendation,

to the external manager. Alenkina Declaration, at 36.

16 Idirisov Declaration at 3-5.


8

14. The role of KGC’s External Manager is to conduct the operational (administrative,

economic and financial) activities of the company, in order to ensure the continuity of a business

where the management bodies failed to remediate violations of safety laws. Some of the External

Manager’s powers and duties are mentioned in Article 65-1 of the Law on Joint-Stock Companies,

specifically, including, without limitation, the management of company bank accounts,17 the use

of the company’s financial resources for the payment of employees’ salaries,18 and ensuring that

the mine is operated in a way that protects the environment and people’s safety, as well as the

safety of the company’s property.19

15. In an effort to enforce the External Management Legislation and address Centerra’s

interference with the legislation and the External Manager, the Kyrgyz Republic commenced

proceedings in the Kyrgyz Republic (the “Kyrgyz Republic Proceedings”) for a determination

that the written resolutions purporting to authorize the filing of these Chapter 11 Cases attached to

the Petitions (the “Filing Resolutions”) are invalid and seeking an injunction suspending the Filing

Resolutions. The injunction was granted on July 6, 2021, and the proceedings remain ongoing.

Thereafter, the Debtors commenced an adversary proceeding and sought a temporary restraining

order (“TRO”) alleging that the Kyrgyz Republic Proceedings violated the automatic stay. The

Kyrgyz Republic has filed an opposition to the TRO and a hearing is scheduled on July 19, 2021.

C. The Chapter 11 Cases

17 Law on Joint-Stock Companies Article 65-1(3), Alenkina Exhibit J. 18 Id. 19 Law on Joint-Stock Companies Article 65-1(6), Alenkina Exhibit J. Moreover, the Procedure of Appointment of

a Temporary External Manager provides that an external manager shall conduct the day-to-day management and

financial operations of the company, including entering into employment law and civil law transactions, foreign

economic transactions, acting on behalf of the company without a power of attorney, and representing the

company before state, judicial, and other authorities. Procedure of Appointment of a Temporary External

Manager, paragraph 7.


9

16. On May 31, 2021, (the “Petition Date”) the Debtors filed petitions for relief [Case No.

21-11051 Docket No. 1 and Case No. 21-11052 Docket No. 1] (the “Petitions), initiating these

Chapter 11 Cases. No trustee, examiner, or creditors’ committee has been appointed. Since the

Petition Date, the Debtors have made only minimal filings and requests for relief. Indeed, the total

activity in the cases can be summarized as follows, the Debtors: (i) sought and obtained entry of

an order affirming the protections of the statutory automatic stay, (ii) sought and obtained entry of

an order modifying the automatic stay to allow the Arbitration (as defined below) to proceed, (iii)

sought a variety of administrative relief including approval of the retention of certain professionals

and compensation procedures for said professionals, (iv) served Subpoenas to Produce Documents

on multiple New York banks and financial institutions,20 and (v) commenced the adversary

proceeding in respect of the Kyrgyz Republic Proceedings described above. At the first day

hearing, Debtors’ counsel stated that the Debtors would seek the Court’s assistance in locating $29

million in gold sale proceeds that are now “missing” but no such relief has been sought.21

17. At the first day hearing, Debtors’ counsel announced that this was “a solvent debtor

case.”22 Further, at the 341 Meeting of the Creditors held on July 8, 2021, Daniel Desjardins, the

representative for the Debtors, stated that the purpose of these Chapter 11 Cases was to encourage

the Kyrgyz Republic to come to an agreement or understanding with the Debtors as to how the

Debtors should operate. Mr. Desjardins made no mention of the Debtors’ financial condition or

restructuring needs.23

20 The Kyrgyz Republic believes that these subpoenas are improper and intends to take action in response thereto. 21 First Day Hearing Transcript 30:4-15; 36:6-12. 22 Id. 8:14-15. 23 Transcript of 341 Meeting of Creditors in Case No. 21-11051 (LGB), held July 8, 2021, Mintz Declaration Exhibit

H, 27:20-28:4.


10

18. On May 18, 2021, Centerra and the Debtors effected delivery of a notice of arbitration

dated May 14, 2021 (Mintz Declaration Exhibit C) (the “May Arbitration Notice”) purportedly

initiating arbitral proceedings to be held in Stockholm, Sweden (the “Arbitration”) against the

Kyrgyz Republic and in relation to alleged breaches of various agreements entered into in 2009

and 2017. On June 16, 2021, Centerra and the Debtors purported to file a First Amended Notice

of Arbitration (Mintz Declaration Exhibit D) (the June Arbitration Notice”) seeking to amend

the May Arbitration Notice and add Kyrgyzaltyn as a party.

19. Through the Arbitration, Centerra and the Debtors seek declaratory and injunctive relief

as well as damages related to, among other things, the External Management Legislation, the

appointment of the External Manager and various tax and environmental claims that have been

brought against Centerra and the Debtors.24 The Permanent Court of Arbitration (“PCA”) in The

Hague (the appointing authority under certain, but not all, of the agreements) has informed the

parties that the Arbitration has been divided into five separate matters based upon each of the five

agreements and arbitration clauses at issue. See Mintz Declaration Exhibit E, July 12 PCA Letter.

20. In Canada, on May 20, 2021, Centerra filed suit against the External Manager in the

Ontario Superior Court of Justice, seeking to (improperly) enjoin the External Manager from his

duties as External Manager pursuant to the External Management Legislation (the “Canada

Proceedings”).25 On May 26, 2021, the Ontario Superior Court of Justice issued a preliminary

injunction prohibiting the External Manager from having any involvement with the management

of the Kumtor Mine pending further order of the Ontario Superior Court of Justice.26

24 June Arbitration Notice at 18. 25 Desjardins Declaration ¶ 44; May 20, 2021 News Release “Centerra Gold Announces Proceedings Against

Former Board Director Tengiz Bolturuk.”, Mintz Declaration Exhibit F. 26 Desjardins Declaration ¶ 44.


11

21. In addition to the Canada Proceedings which violate Kyrgyz law, Centerra has taken

actions to interfere with the Debtors’ ability to operate the Kumtor Mine both before and after the

Petition Date. On May 20, 2021, Yousef Rehman, the Vice President and General Counsel of

Centerra, wrote a letter (Idirisov Declaration Exhibit A) (the “May Supplier Letter”) to certain of

the Debtors’ key suppliers and vendors asserting that:

as of May 27, 2021 neither Centerra nor the duly appointed management of KGC

or KOC have authorized KGC or KOC to engage in any transaction with any party,

including but not limited to any transaction made in connection with any goods or

services provided to or by KGC or KOC with respect to any gold doré produced at

the Kumtor Mine or the proceeds thereof…Centerra reserves all of its rights to take

legal action or other steps against all parties involved in any unauthorized

transactions with KGC or KOC27

22. Centerra has also sent letters or engaged in communications with certain suppliers and

vendors: (i) suggesting that the automatic stay prevents suppliers and vendors from continuing to

perform under any contracts they have with KGC and any payments made to suppliers or vendors

could be clawed back by the Bankruptcy Court as a violation of the automatic stay; (ii) threatening

legal action against suppliers, vendors or other parties that engage in business with the Kumtor

Mine under external management; and (iii) stating that any funds paid to suppliers or vendors are

the property of Centerra, the result of which has caused suppliers and vendors to fear that legal

action from Centerra. Idirisov Declaration, at 4-5. Through threats like the foregoing, Centerra has

made it exceedingly difficult for the Debtors’ external management to operate and preserve value

for all stakeholders. As a result, vendors and suppliers have refused to perform under existing

contracts, declined to enter into new contracts and delayed the shipment of critical supplies,

thereby threatening employee safety. Idirisov Declaration, at 3-5.

27 May Supplier Letter at 1.


12

REQUESTED COURT ACTION

23. The Kyrgyz Republic respectfully requests entry of an order pursuant to sections

105(a), 305(a)(1) and/or 1112(b) of the Bankruptcy Code and 28 U.S.C. §§ 1330, 1332(a) and

1604, and/or on the grounds of international comity and the Act of State doctrine, dismissing the

Debtors’ Chapter 11 Cases. The Kyrgyz Republic further requests that such dismissal be with

prejudice pursuant to section 349(a) of the Bankruptcy Code.

BASIS FOR COURT ACTION REQUESTED

A. The Debtors’ Bankruptcy Cases Must be Dismissed Because Centerra

as Sole Shareholder Lacks the Authority to Commence these Cases

Under the Debtors’ Charters and Applicable Kyrgyz Law

1. Centerra Lacked the Requisite Corporate Authority to File these

Chapter 11 Cases

24. It is well established that only a party with the proper authority may file a chapter 11

petition on behalf of an entity.28 The Debtors purport to have authorized the filing of these Chapter

11 Cases when Centerra, the sole shareholder of each Debtor, approved the Filing Resolutions at

the Extraordinary Shareholders’ Meeting on May 31, 2021. As set forth in detail below, this

authorization “procedure,” which was concocted by Centerra and has no basis in applicable

Kyrgyz law, conflicts with, and is therefore invalid under, the Charters, the Law on Joint-Stock

Companies, and the Kyrgyz Civil Code. As a result, these Chapter 11 Cases should be dismissed.

25. Article 1184 of the Kyrgyz Republic Civil Code (the “Civil Code”) provides that the law

of a legal entity is considered to be the law of the country where that legal entity is incorporated,

which in the case of the Debtors (both Kyrgyz companies) is Kyrgyz law.29 In accordance with

Kyrgyz law, each Charter provides for two primary governing bodies of each entity—the general

28 See Price v. Gurney, 324 U.S. 100, 104 65 S. Ct. 513, 515, 89 L. Ed. 776 (1945); In re Stavola/Manson Electric

Co., Inc., 94 B.R. 21, 24 (Bankr. D. Ct. 1988). 29 Civil Code Article 89(2), Alenkina Exhibit L.


13

meeting of the shareholders (the “General Meeting”) and the board of directors (the board of

KGC, the “KGC Board,” the board of KOC, the “KOC Board,” and collectively, the “Board”).

See Charters §§ 8.1, 9.1; Alenkina Declaration, at 17. The General Meeting is the highest

governing body, and it possesses authority over, amongst other topics: (i) the reorganization of the

company; (ii) the liquidation of the company; (iii) the issuance of corporate debt and other

securities; (iv) the use of the reserve and other funds of the Company; (v) the early removal of

directors; and (vi) the election of directors. See Charters § 8.2; Alenkina Declaration, at 18-19. The

Board, on the other hand, attends to the general management of the company, and has the

following, among other topics, within its exclusive ambit: (i) the calling of the annual and

extraordinary General Meetings; (ii) the formulation and approval of the agenda of such General

Meetings and other issues related to the preparation and conduct of the General Meeting; (iii)

recommendations to the General Meeting with respect to the reorganization of the company; (iv)

preparation of the materials for the General Meetings; and (v) execution of the decisions of the

General Meeting.30

26. Other provisions of the Charters reinforce the exclusive authority of the Board to initiate

and hold a General Meeting.31 The Charters make clear that the scheduling, holding and

establishment of the agenda for any general shareholders’ meeting is within the exclusive authority

of the Board, such that shareholders may not simply act to hold a meeting on their own. See

Charters §§ 9.1, 8.4.2, 8.4.5; Alenkina Declaration, at 20-22. What is more, the Charters are

30 See Charters § 9.1; Alenkina Declaration, at 20-21. Importantly, each of the Debtors created a board of directors

and vested it with certain exclusive powers even though neither the formation of a board of directors nor vesting

it with exclusive authority over certain matters is strictly required of a joint-stock company with a single

shareholder. Alenkina Declaration, at 16. 31 See Alenkina Declaration, at 20-21; Charters §§ 8.4.2 (“The date and procedure for conducting the General

Meeting, notice thereof to the Shareholders…shall be established by the Board in accordance with the laws of the

Kyrgyz Republic.”), 8.4.5 (“A special General Meeting shall be held upon a decision of the Board…”).


14

equally clear that any decision with respect to reorganization, which applies to the filing of the

Petitions, must be made “only upon the initiative or the proposal of the Board.”32

27. Here, the Board did not call a General Meeting, and absent such action no General

Meeting occurred. Indeed, the only reference to any Board actions made in the Filing Resolutions

is a vague statement that the shareholder reviewed the recommendations of unidentified “members

of the Board” regarding the risks and benefits of filing these Chapter 11 Cases.33 A general

shareholders meeting called upon Board approval this was not.34 Accordingly, Centerra was

without authority to unilaterally schedule and hold an “Extraordinary Shareholders’ Meeting,”

which is the authorization upon which the Petitions purport to rely.35

28. The Filing Resolutions also claim that, according to Part 8 of Article 42 of the Law on

Joint-Stock Companies, the usual requirements for providing notice to shareholders and

“determining the quorum, voting and vote count at the general meeting of shareholders [do] not

apply to companies with one shareholder.”36 Article 42(8) exempts companies with one

shareholder from certain, limited general meeting requirements. However, it does not exempt such

companies from complying with procedures related to general meeting requirements that either (i)

are not specifically excluded by Article 42(8) (i.e., quorum, voting and vote count); or (ii) have

been included by the companies in their Charters notwithstanding that provision.37 Here, the

32 See Alenkina Declaration, at 27; Charters § 8.3, 13.1. (“Reorganization and liquidation of the Company shall be

done in accordance with the laws of the Kyrgyz Republic…”). 33 Filing Resolutions at Section I. The reference in Section I(5) of the Filing Resolutions to the fact that the

shareholder had considered and discussed the recommendations of members of the Board of Directors cannot be

construed as a resolution of the Board of Directors or as evidence that they participated in the general meeting, as

this does not conform to the rules for adopting and formalizing such resolutions (see Sections 9.3 – 9.5 of the

Charters), and there is no indication in the Filing Resolutions that the chairman of the Board (or a director)

participated in the meeting; nor does the text of the Filing Resolutions bear the latter’s signature. Alenkina

Declaration, at 33-34. 34 Charters §§ 9.3-9.5. 35 See Petitions, at 6; Alenkina Declaration, at 32-34. 36 Filing Resolutions, at Section I. 37 Law on Joint-Stock Companies Articles 36(3) and 42(8), Alenkina Declaration Exhibit J; Alenkina Declaration,

at 29-30.


15

procedures relating to the General Meeting requirements in the Charters were not complied with,

and those requirements are not specifically excluded by Article 42(8). Failing to comply with

Kyrgyz law and the Charters, the Filing Resolutions and the Petitions were ultra vires and without

valid effect on corporate governance grounds.

2. The External Management Legislation Had Suspended KGC’s

Board and General Meeting Prior to When Centerra Held Its

Purported General Meeting

29. A second, independent reason why the KGC Petition was unauthorized is because the

Board and General Meeting were suspended pursuant to the External Management Legislation at

the time Centerra held its “General Meeting” to authorize the Chapter 11 Cases.38 In such cases,

the management bodies may not make decisions related to the operational, administrative, business

and/or financial activities of the company. In turn, the External Manager was vested with

operational control of KGC.39 The Temporary Management Law further forbids the shareholder

and directors of KGC from interfering with the operation of KGC by the External Manager.40

30. Due to the temporary suspension of the shareholder’s and Board’s powers under Kyrgyz

law, the Filing Resolutions and the Petitions were ultra vires and these resulting Chapter 11 Cases

must be dismissed. See Price 324 U.S. at 104 (authority to file a chapter 11 case is governed by

38 See Temporary Management Law ¶ 1 (“…the powers of the current management bodies of the company shall be

suspended for the period of the suspension of the right to subsoil use.”). The only exception to the suspension of

the powers of the management bodies concerns eliminating threats to the life or health of people working or living

in the area affected by the mine’s operations, which is not the subject of the Filing Resolutions. Alenkina

Declaration, at 9, 32. 39 See Temporary Management Law ¶ 3 (“The temporary external manager [is] vested with all the powers of the

executive body of the company by virtue of the company’s charter, this Law, and the other laws and regulations

of the Kyrgyz Republic…”); Alenkina Declaration, at 9-10, 13. 40 See Temporary Management Law ¶ 5 (“During the period of temporary external management of the company,

the general shareholders’ meeting and the board of directors shall have no right to interfere in the day-to-day

management of the company…”); Alenkina Declaration, at 35-36.


16

the structure and governing agreements of the filing entity. If a case is filed without proper

authority, it must be dismissed).41

B. Cause Also Exists to Dismiss Pursuant to Section 1112(b)

31. Section 1112(b) provides for the dismissal of a bankruptcy case “for cause.” “Cause” is

not defined, but section 1112(b) provides a non-exhaustive list of circumstances that may

constitute cause sufficient to dismiss including an inability to effectuate substantial consummation

of a plan.42 In addition to the circumstances listed in section 1112(b), courts have broad flexibility

to determine whether cause exists to dismiss a case pursuant to their equitable mandate.43 Cause

exists to dismiss these Chapter 11 Cases because, inter alia, Centerra filed these cases in bad faith

and the Debtors have no ability to effectuate a plan of reorganization or liquidation.

1. The Debtors’ Bankruptcy Filing was in Bad Faith

32. In the Second Circuit, a finding that a filer lacked good faith is cause to dismiss chapter

11 cases under section 1112 of the Bankruptcy Code.44 The purpose of the good faith inquiry is to

balance the interests of the debtors and creditors, and “legitimize the delay and costs imposed upon

parties to a bankruptcy.”45 Multiple indicia of bad faith are present here, specifically: (i) the

Debtors’ admission that the filing is just another front in a series of commercial disputes between

two parties—Centerra and the Kyrgyz government; (ii) the Debtors’ admission that they lack a

legitimate reorganization purpose; and (iii) that the Debtors and Centerra have abused the Chapter

41 See also In re Stavola/Manson Electric Co., Inc., 94 B.R. 21, 24 (Bankr. D. Ct. 1988); DB Cap. Holdings, LLC

v. Aspen HH Ventures, LLC (In re DB Cap. Holdings, LLC), Nos. Co-10-046, 10-23242, 2010 WL 4925811, *2-

3 (B.A.P. 10th Cir. Dec. 6, 2010). 42 See In re Gucci, 174 B.R. 401, 409 (Bankr. S.D.N.Y.1994). 43 See In re MF Glob. Holdings Ltd., 465 B.R. 736, 742 (Bankr. S.D.N.Y. 2012); C-TC 9th Ave. P’ship v. Norton

Co. (In re C-TC 9th Ave. P’ship), 113 F.3d 1304, 1311 n.5 (2d Cir. 1997). 44 See In re C-TC 9th Ave. Partn., 113 F.3d at 1310-11 (affirming dismissal on grounds of objective futility of the

reorganization process and bad faith); In re Gen. Growth Prop., Inc., 409 B.R. 43, 55 (Bankr. S.D.N.Y. 2009). 45 See In re C-TC 9th Ave. Partn., 113 F.3d at 1310-11 (citing Little Creek Dev. Co. v. Commonwealth Mortgage

Corp. (In re Little Creek Dev. Co.), 779 F2d 1068, 1071 (5th Cir. 1986)).


17

11 Cases to interfere with the Debtors’ operations, disregard Kyrgyz law and to further their

position in the Arbitration.

a. The Chapter 11 Cases are a Two-Party Dispute

33. At their core, these Chapter 11 Cases represent another (albeit improper) forum in a

dispute primarily between two parties—the Kyrgyz Republic and Centerra—over proper operation

and management of the Kumtor Mine. Where the basis for a bankruptcy filing is the continuation

of a two-party dispute, that is a strong indicator that the filing was commenced in bad faith. See In

re HBA E., Inc., 87 B.R. 248, 260 (Bankr. E.D.N.Y. 1988) (“An important factor to consider in

determining whether a Chapter 11 case was initiated in good faith is whether the reorganization

effort essentially involves a two-party dispute.”).46 Here, the Debtors have admitted that they are

solvent, have no debt and had no significant operational issues leading up to the filing of the

Petition.47 Indeed, the lack of material involvement in these Chapter 11 Cases by any other parties

in interest (including the apparent lack of interest in forming a creditors’ committee) further

underscores the fact that this matter is a two-party dispute masquerading as a chapter 11 case.48

b. The Chapter 11 Cases Lack a Proper Reorganization

Purpose

34. The Debtors have not and cannot state a proper reorganization purpose for these Chapter

11 Cases. Instead, Centerra and the Debtors filed the Petitions in a desperate attempt to use the

Bankruptcy Code to avoid complying with Kyrgyz law, impede the lawful appointment and

operation of KGC by External Management, to interfere with the Debtors’ operations and to apply

46 See also In re Van Owen Car Wash, Inc., 82 B.R. 671, 673 (Bankr. C.D. Cal. 1988) (dismissing under 1112(b)

where the “bankruptcy case is essentially a two-party civil lawsuit involving state law…that was brought before

a federal Bankruptcy Court, under the guise of being a reorganization of some sort…”). 47 See First Day Hearing Transcript 8:14-9:5 (“We are here with a solvent debtor…this company, this mine has been

profitable…and remains so. The only reason we’re here today, Your Honor, is as a result of an [allegedly] illegal

expropriation event…”). 48 In re Landmark Cap. Co., 27 B.R. 273, 280 (Bankr. D. Ariz. 1983) (recognizing the lack of unpaid unsecured

creditors before finding that the chapter 11 cases were essentially a two party dispute).


18

pressure on the Kyrgyz Republic. The Court need look no further than the docket for proof. The

Debtors have sought no significant relief other than relief targeted at the Kyrgyz Republic in

furtherance of the parties’ two-party dispute.

35. Several courts have considered whether the debtor filed its petition for a legitimate

reorganization effort or whether it instead filed for “tactical reasons unrelated to reorganization.”

See In re Integrated Telecom Express, Inc., 384 F.3d 108, 119-20 (3d Cir. 2004) (the questions of

good faith should be determined by (1) whether the petition serves a valid bankruptcy purpose,

and (2) whether the petition is filed merely to obtain a tactical litigation advantage). To determine

whether a reorganization purpose exists, or a filing is instead an improper tactic in an outside

dispute, Court have looked to the circumstances of the filing such as timing, the existence of an

outside dispute, and the financial condition of the Debtor. See e.g. Order Granting Motions to

Dismiss [Docket No. 740], In re National Rifle Association of America and Sea Girt LLC, Case

No. 21 30085 (HDH) (Bankr. N.D. Tex. May 11, 2021), Mintz Declaration Exhibit I, (finding that

chapter 11 cases were not filed in good faith and dismissing where they were filed “to address a

regulatory enforcement problem, not a financial one”).

36. Fraternal Composite Servs., Inc. v. Karczewski is instructive in these circumstances. 315

B.R. 253, 255 (N.D.N.Y. 2004). In Fraternal, the court was faced with a Debtor that was subject

to a pending state court judgment, but was “not facing any serious financial difficulties and was

current on all obligations to pay its employees and to fulfill customer contracts.” Id. The court

recognized that for a debtor to file in good faith it “need not be in extremis…[but] it must, at least,

be experiencing a level of financial difficulty”. Id. at 256-57. The court further noted that “Chapter

11 does not exist for the purpose of allowing a debtor the option of litigating a dispute with a single


19

party…in an alternate forum…”. Id. at 257. The court found that the debtor had not filed its cases

in good faith and affirmed the dismissal of the case. Id. at 258.

37. The Third Circuit also addressed similar facts in SGL Carbon Corp. 200 F.3d 154, 157

(3d Cir. 1999). There, the court heard evidence that the debtor was financially healthy and filed

the chapter 11 cases to “change the negotiating platform” and “increase the pressure on…plaintiffs

to settle” an outstanding civil antitrust suit. Id. at 158. The court, examining the totality of the facts

and circumstances, determined that the cases lacked a valid reorganization purpose and were thus

filed in bad faith. Id. at 162-170.49 These same tactics underlie Centerra’s and the Debtors’

purposes in filing these Chapter 11 Cases.

38. Here, these Debtors have no need for a reorganization, and are simply attempting to avoid

enforcement of Kyrgyz law and gain an upper hand in a two-party dispute. These Chapter 11 Cases

should be dismissed.

2. The Debtors are Unable to Effectuate a Chapter 11 Plan

39. Courts have found that “the inability to effectuate a plan, by itself, provides cause for

dismissal or conversion of a chapter 11 case”. In re DCNC North Carolina I, LLC, 407 B.R. 651,

665 (Bankr. E.D.Pa. 2009).

40. For a plan to be successfully consummated and effective, it will need to be effective

against the Kyrgyz Republic, and creditors residing in the Kyrgyz Republic, where KGC operates.

With all due respect and deference to this Court, this Court is unable to confirm a plan of

49 See also In re Landmark Cap. Co., 27 B.R. at 282 (dismissing the chapter 11 cases where “[t]he sole purpose of

commencing proceedings was to forestall and thwart North Central’s exercise of its power of enforcement under

its deed of trust”); In re HBA E., Inc., 87 B.R. 248 at 260 (filing on the eve of an answering date in a State Court

action was found to be “the primary, if not sole, purpose of the filing,” and dismissing the chapter 11 cases)

Monsour Med. Ctr., Inc. v. Stein (In re Monsour Med. Ctr., Inc.), 154 B.R. 201, 208 (Bankr. W.D. Pa. 1993)

(“Filing a bankruptcy petition as a tactic to litigate non-bankruptcy issues or to resolve a dispute indicates bad

faith.”); In re First Fin. Enters., Inc., 99 B.R. 751, 756 (Bankr. W.D.N.Y. 1989) (dismissing a chapter 11 case

where the court found that the debtor used chapter 11 as a litigation strategy in an attempt to defeat the Texas

regulatory scheme for the receivership of insolvent life insurance companies).


20

reorganization affecting the rights of the Kyrgyz Republic due to the protections provided to

foreign sovereigns under the Foreign Sovereign Immunities Act of 1976 (“FSIA”).50

41. Section 1604 of the FSIA requires that every foreign state “shall be immune from the

jurisdiction of the courts of the United States,” subject only to those exceptions “provided in

sections 1605 to 1607 of this chapter.” 28 U.S.C. § 1604. If a party can show that one of those

exceptions applies, then a federal court has both subject matter jurisdiction and personal

jurisdiction.51 But if a party cannot show that any of the FSIA’s exceptions apply, then it is out of

luck—the FSIA provides the “exclusive” and “sole basis for obtaining jurisdiction over a foreign

state in our courts.” Mobil Cerro Negro, Ltd. v. Bolivarian Republic of Venezuela, 863 F.3d 96,

113 (2d Cir. 2017) (citations omitted).

42. No exception applies here. In support of an exception, the Debtors have referenced

section 106 of the Bankruptcy Code, which provides that “sovereign immunity is abrogated as to

a governmental unit” with respect to certain provisions of the Bankruptcy Code, 11 U.S.C.

§ 106(a), and the Code defines “a governmental unit” to include “a foreign state,” id. § 101(27).

43. However, that argument is foreclosed by precedent and runs head-long into “[t]he

Supreme Court’s emphatic and oft-repeated declaration . . . that the FSIA is the ‘sole basis for

obtaining jurisdiction over a foreign state in our courts.’” Mobil Cerro Negro, 863 F.3d at 113

(citations omitted). The Second Circuit has likewise emphasized that “[t]he only source of subject

matter jurisdiction over a foreign sovereign or its instrumentalities in the courts of the United States

is the FSIA,” a declaration that is as “categorical” as it is often “reiterated.” Id. (citation omitted).

50 See 28 U.S.C. § 1604. 51 See 28 U.S.C. § 1330; Beierwaltes v. L’Office Federale De La Culture De La Confederation Suisse, 999 F.3d

808, 816 (2d Cir. 2021).


21

Accordingly, debtors cannot rely on section 106 to “provide[] a separate jurisdictional basis over

foreign states which operates independent of the FSIA[].”52

44. Concluding otherwise would require this Court to unsettle the existing “comprehensive

framework for resolving any claim of sovereign immunity.” NML Cap., 573 U.S. at 141 (2014)

(citation omitted) (emphasis added). Congress specifically stated in the FSIA that “[c]laims of

foreign states to immunity should henceforth be decided by courts of the United States and of the

States in conformity with the principles set forth in this chapter,” 28 U.S.C. § 1602, and those

principles do not include section 106’s purported abrogation of immunity.

45. Section 106 directly conflicts with section 1604 of the FSIA: the latter states that unless

otherwise “provided in sections 1605 to 1607 of this chapter,” foreign sovereigns “shall be

immune,” whereas the former states that “immunity is abrogated” for a wide class of public actors

including foreign sovereigns. But any conclusion that Congress impliedly repealed or secretly

amended 28 U.S.C. § 1604 via 11 U.S.C. § 106 is “very much disfavored,” A. Scalia & B. Garner,

Reading Law 327 (2012) (citation omitted), and should be adopted only as a last resort. Instead,

courts faced with conflicting statutory provisions should use all the tools of statutory construction

to “fit, if possible, all parts into an harmonious whole.”53 Here, those tools all unequivocally point

in the same direction—that section 106 does not upend the comprehensive framework established

to assess the immunity of foreign sovereigns.

52 In re EAL (Delaware) Corp., No. 93-578-SLR, 1994 WL 828320, at *12 (D. Del. Aug. 3, 1994); see id. (“United

States bankruptcy courts, like other courts in this country—federal and state—must look to the FSIA for

jurisdiction over a claim against a foreign state. In the absence of FSIA subject matter jurisdiction, the Bankruptcy

Code cannot provide an independent basis for federal court jurisdiction over an action against a foreign state.”).

In In re EAL (Delaware) Corp., the district court was interpreting an older version of Section 106 that was

materially similar to the current Section 106 insofar as the relevant provision was understood to waive the

immunity of “governmental units.” See 11 U.S.C. § 106(a) (1988) (“A governmental unit is deemed to have

waived sovereign immunity . . . .”). As explained below, Congress later amended a different provision of Section

106 to clarify that it waived the immunity of the states and the federal government (but not foreign sovereigns). 53 Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (citation omitted).


22

46. First, any conflict between section 1604 and section 106 is resolved by application of the

generalia specialibus non derogant canon, which dictates that in the event of “a conflict between

a general provision and a specific provision, the specific provision prevails.” Scalia & Garner,

supra, at 183. Here, section 106 is indisputably the general provision. It purports to govern the

immunity of “governmental units” in general, defined to include the “United States; State[s];

Commonwealth[s]; District[s]; Territor[ies]; [and] municipalit[ies],” as well as almost all of those

entities’ “department[s], agenc[ies], or instrumentalit[ies].” 11 U.S.C. § 101(27). By contrast,

section 1604 applies only to “foreign state[s].” 28 U.S.C. § 1604; see id. § 1603 (defining “foreign

state”). Even more narrowly, section 1604 only sets out the rules for jurisdiction over foreign states.

Given that section 1604 is the more specific enactment on the question of jurisdiction over foreign

states, it controls in the event of a conflict with the Bankruptcy Code. It does not matter that section

106 was enacted after section 1604; “a specific statute will not be controlled or nullified by a

general one, regardless of the priority of enactment.” Morton v. Mancari, 417 U.S. 535, 550-51

(1974). In fact, the “most common application” of the general-specific canon is “to successive

statutes,” because legislators are often “unfamiliar with enactments of their predecessors” and

“unwittingly contradict them.” Scalia & Garner, supra, at 185.

47. Second, the structure of both the FSIA and the Bankruptcy Code reinforces that only the

former governs the sovereign immunity of foreign states. As noted above, the FSIA creates a

package deal: it allows federal courts to exercise both subject matter jurisdiction and personal

jurisdiction, but only if a plaintiff can show that one of the FSIA’s exceptions to immunity applies.

In particular, section 1330(a) of the FSIA grants “jurisdiction . . . of any nonjury civil action

against a foreign state . . . as to any claim for relief in personam with respect to which the foreign

state is not entitled to immunity . . . under sections 1605-1607 of this title,” while section 1330(b)


23

provides that, following a proper, FSIA-specific service of process, “[p]ersonal jurisdiction over a

foreign state shall exist as to every claim for relief over which the district courts have jurisdiction

under subsection (a).” 28 U.S.C. § 1330. If the Debtors were correct in asserting that section 106

strips a foreign state of its sovereign immunity despite 28 U.S.C. § 1330(a) and 1604, that would

get debtors only halfway: that is, even if the court had subject matter jurisdiction over the suit, it

would still lack a statutory basis to exercise personal jurisdiction over the foreign state. Section

1330(b) would be unavailable because it applies only to cases where the court has “jurisdiction

under subsection (a).”54 Notably, the Bankruptcy Code does not provide any statutory basis for

exerting personal jurisdiction over foreign states—a telling indication that Congress never meant

for section 106 to provide jurisdiction over such claims in the first place.

48. Third, the legislative history of section 106 confirms that Congress did not intend to

abrogate foreign states’ immunity in bankruptcy proceedings by amending that provision in 1994.

As the House Report explains, section 106 was designed to “effectively overrule two Supreme

Court cases that ha[d] held that the States and Federal Government are not deemed to have waived

their sovereign immunity by virtue of [a previous version of] section 106(c) of the Bankruptcy

Code.”55 The Supreme Court had held that Congress’s waiver of state and federal sovereign

immunity was insufficiently clear in that subsection, and it was thus Congress’s intent in revising

section 106 to make it “conform to the Congressional intent of the Bankruptcy Reform Act of 1978

waiving the sovereign immunity of the States and the Federal Government in this regard.” Id.

54 See, e.g., In re EAL (Delaware) Corp., 1994 WL 828320, at *13 (“[S]tatutory personal jurisdiction over

Eurocontrol is lacking under section 1330(b) because the first element for exercise of personal jurisdiction, i.e.,

subject matter jurisdiction under the FSIA, is not present here.”). 55 H.R. Rep. 103-835, at 42 (1994) (citing Hoffman v. Conn. Dep’t of Income Maint., 492 U.S. 96 (1989) and United

States v. Nordic Village, Inc., 112 S. Ct. 1011 (1992)).


24

(emphasis added). Nothing in the legislative history supports the notion that Congress also

intended to waive foreign sovereigns’ immunity in derogation of the FSIA.

49. Finally, the Charming Betsy canon militates against reading section 106 to abrogate

foreign sovereign immunity. “Congress ordinarily seeks to follow” international law when it

legislates, and therefore “‘an act of Congress ought never to be construed to violate the law of

nations if any other possible construction remains.’”56 International law does not permit one state

to abrogate the sovereign immunity of another in bankruptcy proceedings. That is why some

foreign states have chosen to waive their own immunity by ratifying the United Nations

Convention on Jurisdictional Immunities of States and Their Property, which does preclude a state

from invoking its immunity in foreign proceedings which relate to the administration of property,

including the estate of a bankrupt entity.57 Neither the United States nor the Kyrgyz Republic has

signed that treaty, however, and in any event the treaty has not yet gone into effect. If this Court

were to adopt the Debtors’ reading of section 106, it would effectively abrogate the international-

law rights of the Kyrgyz Republic and more than a hundred other foreign states. Such an outcome

was surely not on Congress’s mind when it enacted section 106.

50. At a minimum, these immunity and jurisdictional issues would significantly complicate

any reorganization plan. Even if section 106 were held to override the FSIA, section 106 applies

to only a limited set of Bankruptcy Code provisions and does not apply to issues related to sections

1121 to 1129, which lay out the elements of a plan and the requirements for confirmation of that

plan. See id. §§ 1121-29. Section 106 therefore does not abrogate sovereign immunity as to the

56 New York Times Co. v. U.S. Dep’t of Just., 756 F.3d 100, 137 (2d Cir.), opinion amended on denial of reh’g, 758

F.3d 436 (2d Cir. 2014), supplemented, 762 F.3d 233 (2d Cir. 2014) (quoting Murray v. The Charming Betsy, 6

U.S. (2 Cranch) 64, 118 (1804)). 57 See United Nations General Assembly, Convention on Jurisdictional Immunities of States and Their Property,

Res. 59/38, Art. 13(c) (Dec. 2, 2004).


25

confirmation of a Chapter 11 plan, and, respectfully, any plan that is not effective against the

Kyrgyz Republic cannot be effectively implemented since the Kumtor Mine is located in and

subject to the sovereignty of the Kyrgyz Republic.

51. This Court will also have difficulty binding creditors of the debtor residing in the Kyrgyz

Republic, which make up a significant portion of the overall body of creditors in these Chapter 11

Cases. There is no established practice in the Kyrgyz Republic of recognizing and enforcing

foreign court bankruptcy judgements. See Alenkina Declaration at 38-40. Indeed, while

Article 1(7) and (8) of the Bankruptcy Law provides for recognition of foreign court judgements

in bankruptcy cases pursuant to international treaties, no such treaty is in place between the United

States and the Kyrgyz Republic and there is no mention of enforcement of such judgments in the

Bankruptcy Law. See Id. What is more, even the recognition of foreign court bankruptcy

judgements would be conditioned on reciprocity and an absence of conflict with the laws of the

Kyrgyz Republic. See Id. Simply put, the Chapter 11 Cases do not meet these conditions, and any

plan confirmed by this Court would be ineffective in the Kyrgyz Republic.58

52. The case at hand bears a marked similarity to the situation in In re Yukos Oil Company.59

That case involved a tax dispute between Yukos Oil Company, an open joint stock company

organized under the laws of the Russian Federation, and the Russian government. The Russian

government froze Yukos’ assets and announced a sale of Yukos’ largest subsidiary. In response,

58 Further, while under section 1334(e) the court is empowered to exert exclusive jurisdiction over “all the property,

wherever located, of the debtor as of the commencement of such case, and of property of the estate”, the

bankruptcy court's in rem jurisdiction cannot be enforced extraterritorially without in personam jurisdiction over

the defendant.” § 1334(e)(1); In re Lehman Bros. Holdings Inc., 544 B.R. 16, 41 (Bankr. S.D.N.Y. 2015). In other

words, “the bankruptcy court is precluded from exercising control over property of the estate located in a foreign

country without the assistance of the foreign courts.” Id. (quoting In re Int'l Admin. Servs., Inc., 211 B.R. 88, 93

(Bankr.M.D.Fla.1997)); see In re Gucci, 309 B.R. 679, 683–84 (S.D.N.Y. 2004). As noted above, the Kyrgyz

courts are unlikely to cooperate with this Court. As a result, “the bankruptcy court is precluded from exercising

control over property of the estate located in a foreign country.” In re Lehman Bros., 544 B.R. at 41 (quoting In

re Int'l Admin. Servs., Inc., 211 B.R. at 93; see In re Gucci, 309 B.R. at 683–84. 59 In re Yukos Oil Co., 321 B.R. 396, 399 (Bankr. S.D. Tex. 2005).


26

Yukos sought relief from the European Court of Human Rights, filed a notice of arbitration, and

filed a chapter 11 petition in the Southern District of Texas. As is the case here, Yukos testified

that its primary purpose for filing was to obtain a halt in the Russian government’s actions. The

court dismissed the case pursuant to section 1112(b), based in large part on: (i) Yukos’ “extremely

limited” ability to effectuate a reorganization without the cooperation of the Russian government

as regulator and central taxing authority; (ii) the importance of Yukos’ to the Russian economy;

(iii) Yukos’ attempts to commence proceedings in other fora, including an arbitration; and (iv) the

fact that the vast majority of the business and financial activities of Yukos continued to occur in

Russia. Each of these facts is equally applicable here.

53. This Court should dismiss the Chapter 11 Cases for cause under section 1112(b) for

similar reasons. These Chapter 11 Cases have no reorganization purpose and, even if there was a

valid reorganization purpose, this Court has limited ability to effectuate an enforceable plan both

as against the Kyrgyz Republic but also foreign creditors.

C. The Court Should Exercise its Discretion to Abstain and Grant the

Motion Under Section 305(a)(1) of the Bankruptcy Code

54. Bankruptcy Code section 305(a)(1) provides that “[t]he court, after notice and a hearing,

may dismiss a case under this title, or may suspend all proceedings in a case under this title . . . if

the interests of creditors and the debtor would be better served by such dismissal or suspension.”

Matter of Axona Int’l Credit & Com. Ltd. (Formerly Bancom Int’l Ltd.), 924 F.2d 31, 33 n.1 (2d

Cir. 1991) (citing 11 U.S.C. § 305(a)(1)). Granting abstention under section 305(a)(1) requires

“the interests of both the debtor and its creditors [to] be served.” In re Monitor Single Lift I, Ltd.,

381 B.R. 455, 462 (Bankr. S.D.N.Y. 2008).60

60 See also In re Globo Comunicacoes e Participacoes S.A., 317 B.R. 235, 255 (S.D.N.Y. 2004) (same); In re Schur

Mgmt. Co., Ltd., 323 B.R. 123, 129 (Bankr. S.D.N.Y. 2005). While relief pursuant to section 305(a)(1) is more

common in involuntary cases commenced by creditors, “nowhere in the text of § 305(a)(1) or in its legislative


27

55. The interests of both the creditors and the Debtors are served by granting this Motion.

The Chapter 11 cases may serve the strategic needs of Centerra, but they do not in any way benefit

the Debtors or their creditors. The majority of the creditors are foreign (principally located in the

Kyrgyz Republic) and are understandably unversed in the restrictions of the Bankruptcy Code

(including the temporary non-payment of pre-petition claims) because they do not regularly

transact business with companies that have filed for Chapter 11.61 Moreover, as detailed above,

the Chapter 11 Cases (and Centerra’s actions) are causing disruption and confusion among the

vendors and suppliers, causing permanent disruption to the Debtors’ vendor and supplier

relationships and interfering with the Debtors’ operations.

56. Fundamentally, it is hard to conceive of a set of facts warranting abstention more than

these cases: (i) the Debtors are Kyrgyz companies whose assets, operations and employees are all

seated in the Kyrgyz Republic; (ii) with very few exceptions, all of the creditors are based in

Kyrgyz Republic or in its region; (iii) the Kumtor Mine’s operations have been disrupted by the

Chapter 11 Cases and Centerra’s accompanying interference with vendors and suppliers; (iv) the

Debtors have no nexus to the United States other than New York bank accounts with

approximately $50,000; (v) there are fundamental questions about the Bankruptcy Court’s ability

to grant effective and enforceable relief against the Kyrgyz Republic and the Debtors’ foreign

creditors; (vi) the Debtors are not insolvent and have no need for reorganization or other related

relief from this Court; and (vii) the parties’ dispute is actively being litigated in the Arbitration

(which provides a forum for granting enforceable relief). In contrast, dismissal serves the interests

history did Congress specifically limit the basis for a § 305(a)(1) motion to involuntary cases commenced by

creditors” and caselaw “interpreting § 305(a)(1), while dominated by cases concerning involuntary petitions filed

by creditors, is not limited to this situation.” In re Monitor Single Lift I, Ltd., 381 B.R. 455, 463-64 (Bankr.

S.D.N.Y. 2008). 61 Desjardins Declaration ¶ 63.


28

of the Debtors and its creditors because it will resolve vendor and supplier confusion, facilitate the

restoration of the Kumtor Mine’s operations, alleviate the need for foreign creditors to monitor

and participate in these U.S. bankruptcy cases, and allow the creditors to be paid in full in the

ordinary course for their otherwise “pre-petition” claims.

1. Dismissal Under Section 305 is Appropriate Under the Second

Circuit’s Seven-Factor Test

57. The Second Circuit applies a seven-factor test to evaluate relief under section 305(a)(1).

Those factors are (1) the economy and efficiency of administration; (2) whether another forum is

available to protect the interests of both parties or there is already a pending proceeding in state

court; (3) whether federal proceedings are necessary to reach a just and equitable solution; (4)

whether there is an alternative means of achieving an equitable distribution of assets; (5) whether

the debtor and the creditors are able to work out a less expensive out-of-court arrangement which

better serves all interests in the case; (6) whether a non-federal insolvency has proceeded so far in

those proceedings that it would be costly and time consuming to start afresh with the federal

bankruptcy process; and (7) the purpose for which bankruptcy jurisdiction has been sought. In re

Navient Sols., LLC, 625 B.R. 801, 819-820 (Bankr. S.D.N.Y. 2021) (citing In re Monitor Single

Lift I, Ltd., 381 B.R. 455, 464-465 (Bankr. S.D.N.Y. 2008)).62

58. Applying these factors here demonstrates that dismissal is warranted. The Court should

assign significant weight to factor seven (7), the purpose for which federal bankruptcy jurisdiction

is being sought, which forcefully compels dismissal.63 Here, the Chapter 11 Cases were

62 In re TPG Troy, LLC, 492 B.R. 150, 160 (Bankr. S.D.N.Y. 2013), subsequently aff’d, 793 F.3d 228 (2d Cir. 2015)

(same). 63 In re Monitor Single Lift I, Ltd., 381 B.R. 455, 465 (Bankr. S.D.N.Y. 2008) (“[w]hile all factors are considered,

not all are given equal weight in every case.”); In re Argus Grp. 1700, Inc., 206 B.R. 737, 755 (Bankr. E.D. Pa.

1996), aff’d sub nom. Argus Grp. 1700, Inc. v. Steinman, 206 B.R. 757 (E.D. Pa. 1997) (“the exact factors and

the weight to be given each of them is highly sensitive to the facts of each individual case”) (internal quotations

removed).


29

commenced in order to apply the automatic stay to halt and interfere with the Governance Action

and enable Centerra to gain an upper hand in its dispute with the Kyrgyz Republic. See supra ¶¶

33-36. This is not a proper basis for chapter 11 relief and has nothing to do with a legitimate

restructuring purpose—there is none here.64 Moreover, it cannot be that the only purpose of these

cases is for the Debtors to wield the automatic stay. In re Compania de Alimentos Fargo, S.A., 376

B.R. 427, 441 (Bankr. S.D.N.Y. 2007) (“[i]f the reorganization serves no purpose, the automatic

stay cannot give it a purpose”). Therefore, factor seven strongly supports abstention under

Bankruptcy Code section 305(a)(1).65

59. Because there is no legitimate restructuring purpose, factors four (4) and five (5) also

clearly weigh in favor of dismissal. Factor four (4) examines whether there is an alternative means

of achieving an equitable distribution of assets. Similarly, factor five (5) looks at whether the

debtor and the creditors are able to work out a less expensive out-of-court arrangement which

better serves all interests. These factors support dismissal because dismissal would allow the

creditors to be paid in full on account of their prepetition claims, a result which is obviously in

their best interest. Moreover, there exist other appropriate forums for the Debtors, Centerra and

the Kyrgyz Republic to resolve their disputes on the merits. With respect to factor one (1), which

weighs the economy and efficiency of administration, it is clearly inefficient to continue these

Chapter 11 Cases when there is no restructuring purpose and the ability of this Court to fashion

enforceable relief as to creditors and the Kyrgyz Republic is limited. See supra ¶ 53.

64 See supra ¶¶ 36-40. 65 See In re Schur Mgmt. Co., Ltd., 323 B.R. 123, 127 (Bankr. S.D.N.Y. 2005) (“courts . . . have consistently

dismissed Chapter 11 petitions filed by financially healthy companies with no need to reorganize under the

protection of Chapter 11”); In re 801 S. Wells St. Ltd. Pshp., 192 B.R. 718, 726 (Bankr. N.D. Ill. 1996); In re

Argus Grp. 1700, Inc., 206 B.R. 737, 756 (Bankr. E.D. Pa. 1996), aff’d sub nom., Argus Grp. 1700, Inc. v.

Steinman, 206 B.R. 757 (E.D. Pa. 1997) (where it was “obvious that Debtors did not need to file bankruptcy

because of financial concerns,” dismissal under section 305(a)(1) was appropriate).


30

60. Factors two (2) and (6) require the court to weigh the “relative benefits and burdens of

exercising its jurisdiction.” In re Compania de Alimentos Fargo, S.A., 376 B.R. 427, 435 (Bankr.

S.D.N.Y. 2007). The second (2) factor considers whether another forum is available to protect the

parties’ interests and whether there is already a pending proceeding in state court. The Arbitration

clearly meets that standard. The sixth (6) factor looks at the extent to which costs have already

been incurred in a non-federal proceeding such that it would be costly and time-consuming to start

afresh in federal bankruptcy court. Although the Arbitration is only in its early stages with the

parties ramping up their expenses, the Bankruptcy Court proceedings add an extra level of expense

and is unnecessary to advance the resolution of the parties’ dispute in the Arbitration.

61. Lastly, factors one (1), three (3) and four (4) should also be credited in favor of dismissal

where the bankruptcy court “satisf[ies] itself that the foreign forum will determine and adjust the

parties’ rights in a fair and equitable manner.” In re Compania de Alimentos Fargo, S.A., 376 B.R.

427, 434 (Bankr. S.D.N.Y. 2007). As discussed below, the Arbitration meets this standard.

2. The Court Should Dismiss the Chapter 11 Cases on the

Grounds of International Comity

62. This Motion should be granted under any reasonable conception of international comity.

International comity is “the recognition which one nation allows within its territory to the

legislative, executive or judicial acts of another nation.” Hilton v. Guyot, 159 U.S. 113 (1895).66

Although “the doctrine has never been well-defined…international comity is clearly concerned

with maintaining amicable working relationships between nations.”67

66 In re Maxwell Commc’n Corp. plc by Homan, 93 F.3d 1036, 1046 (2d Cir. 1996) (“Analysis of comity often

begins with the definition proffered by Justice Gray in Hilton v. Guyot, 159 U.S. 113”); Societe Nationale

Industrielle Aerospatiale v. U.S. Dist. Ct. for S. Dist. of Iowa, 482 U.S. 522, 544 n.27 (1987) (“Comity refers to

the spirit of cooperation in which a domestic tribunal approaches the resolution of cases touching the laws and

interests of other sovereign states”). 67 JP Morgan Chase Bank v. Altos Hornos de Mexico, S.A. de C.V., 412 F.3d 418, 423 (2d Cir. 2005); Goss Int’l

Corp. v. Man Roland Druckmaschinen Aktiengesellschaft, 491 F.3d 355, 360 (8th Cir. 2007) (“Although comity

eludes a precise definition, its importance in our globalized economy cannot be overstated.”).


31

63. The Second Circuit has explained that international comity “may be viewed as a

discretionary act of deference by a national court to decline to exercise jurisdiction in a case

properly adjudicated in a foreign state.” In re Maxwell Commc’n Corp. plc by Homan, 93 F.3d

1036, 1047 (2d Cir. 1996). This is known as “adjudicatory comity.” In re Arcapita Bank B.S.C.(c),

575 B.R. 229, 238 (Bankr. S.D.N.Y. 2017). International comity is especially important in the

context of the Bankruptcy Code and bankruptcy courts often apply adjudicatory comity. In re

Picard, Tr. for Liquidation of Bernard L. Madoff Inv. Sec. LLC, 917 F.3d 85, 103 (2d Cir. 2019),

cert. denied sub nom. HSBC Holdings PLC v. Picard, 140 S. Ct. 2824, 207 L. Ed. 2d 157 (2020)

(“Congress explicitly recognized the importance of the principles of international comity in

transnational insolvency situations when it revised the bankruptcy laws”) (internal quotations and

citations omitted).68 In other words, when bankruptcy courts consider dismissing a case based on

comity concerns, it is often in a context where there is a parallel foreign insolvency proceeding.69

64. Bankruptcy courts defer to parallel foreign insolvency proceedings as long as they are

procedurally fair and do not violate the laws or public policy of the United States. Altos Hornos

de Mexico, 412 F.3d at 424. The motivating factor behind bankruptcy court’s deference to

international comity is to enable the assets of a debtor to be dispersed in “an equitable, orderly,

and systematic manner, rather than in a haphazard, erratic or piecemeal fashion.”70 Applying the

typical bankruptcy formulation of adjudicative comity here is complicated by the fact that there is

no foreign insolvency proceeding, due to the fact that the Debtors are financially healthy and

68 Altos Hornos de Mexico, 412 F.3d at 424 (“We have repeatedly held that U.S. courts should ordinarily decline to

adjudicate creditor claims that are the subject of a foreign bankruptcy proceeding”); Finanz AG Zurich v. Banco

Economico S.A., 192 F.3d 240, 246 (2d Cir. 1999) (same). 69 Arcapita Bank, 575 B.R. at 241 (“the Second Circuit’s international comity decisions primarily emphasize the

doctrine’s bankruptcy significance in the context of parallel insolvency proceedings”); Allstate Life Ins. Co. v.

Linter Grp. Ltd., 994 F.2d 996, 999 (2d Cir. 1993) (“[W]e have recognized that comity is particularly appropriate

where, as here, the court is confronted with foreign bankruptcy proceedings.”). 70 Linter Grp. Ltd., 994 F.2d at 1000; Royal & Sun All. Ins. Co. of Canada v. Century Int’l Arms, Inc., 466 F.3d 88,

93 (2d Cir. 2006).


32

admittedly have no restructuring purpose. Typical concerns regarding the efficient and systematic

distribution of the Debtors’ assets are therefore absent here. Should this Court apply adjudicative

comity, then, the focus should be on whether the Arbitration is procedurally fair and consistent

with United States’ public policy (it is). It would be illogical for the Debtors to argue that the

Arbitration is procedurally unfair given that it was the Debtors and Centerra who chose to

commence the Arbitration in Sweden and sought and obtained stay relief to allow the Arbitration

to continue. Adjudicative comity supports deference to the Arbitration over these Chapter 11

Cases.

65. Even if this Court finds that adjudicative comity is inapplicable to these facts because of

the lack of a foreign insolvency proceeding, international comity still may apply in instances where

there is no parallel foreign proceeding if doing so is consistent with the Restatement (Third) of

Foreign Relations § 403 (the “Restatement”).71 Where a court order may infringe on sovereign

interests of a foreign state, for example, courts have referred to the Restatement factors for

guidance.72

66. Section 403(1) of the Restatement provides in relevant part that “a state may not exercise

jurisdiction . . . with respect to a person or activity having connections with another state when the

exercise of such jurisdiction is unreasonable.” Section 403(2) of the Restatement provides eight

(8) factors that inform whether exercising jurisdiction would be unreasonable:

(a) the link of the activity to the territory of the regulating state, i.e., the extent to

which the activity takes place within the territory, or has substantial, direct, and

foreseeable effect upon or in the territory; (b) the connections, such as nationality,

residence, or economic activity, between the regulating state and the person

principally responsible for the activity to be regulated, or between that state and

71 Arcapita Bank B.S.C.(c), 575 B.R. at 237 (“the Court agrees…that the doctrine [of international comity] may

apply in such instances” where there is no parallel foreign proceeding). 72 Gucci Am., Inc. v. Weixing Li, 768 F.3d 122, 139 (2d Cir. 2014); Restatement § 403 cmt. a. (“Some United States

courts have applied the principle of reasonableness as a requirement of comity, that term being understood not

merely as an act of discretion . . . but as reflecting a sense of obligation”) (emphasis added).


33

those whom the regulation is designed to protect; (c) the character of the activity

to be regulated, the importance of regulation to the regulating state, the extent to

which other states regulate such activities, and the degree to which the desirability

of such regulation is generally accepted; (d) the existence of justified expectations

that might be protected or hurt by the regulation; (e) the importance of the

regulation to the international political, legal, or economic system; (f) the extent

to which the regulation is consistent with the traditions of the international system;

(g) the extent to which another state may have an interest in regulating the activity;

and (h) the likelihood of conflict with regulation by another state.73

67. Applying the Restatement factors here demonstrates that it would be manifestly

“unreasonable” for this Court to exercise its jurisdiction under this set of facts. With respect to

factors (a) and (b), as detailed above, the Debtors are fundamentally centered in the Kyrgyz

Republic (assets, operations, creditors, employees, etc.), while the connections to the United States

could hardly be weaker.

68. With respect to factor (d), which weighs “the existence of justified expectations that

might be protected or hurt by the regulation,” no one would be surprised that these matters would

be dealt with in the Arbitration or in the Kyrgyz Republic, rather than the United States. Indeed,

that is exactly what Centerra and the Debtors expected and agreed to when they incorporated the

Debtors in the Kyrgyz Republic and entered into contract providing for disputes to be resolved by

arbitration. There is similarly a reasonable expectation that any bankruptcy of the Debtors would

take place in the Kyrgyz Republic—KGC’s Charter provides that the reorganization or liquidation

of KGC shall be done in accordance with, and under, Kyrgyz law.74

69. Similarly, given how jarring the continuance of these Chapter 11 Cases is to parties’

reasonable expectations, factors (e) and (f) support dismissal here. Those factors require this Court

to consider the impact of these Chapter 11 Cases on the functioning of the international system as

a whole. Maxwell Commc'n Corp, 93 F.3d at 1048 (“The analysis must consider the international

73 Restatement, §403(2). 74 KGC Charter, Article 13.1.


34

system as a whole. . . because the effective functioning of that system is to the advantage of all the

affected jurisdictions.”) The invocation of the Bankruptcy Code absent a restructuring purpose and

any meaningful connection to the United States, based on the situs of approximately $50,000 in

New York bank accounts, threatens the functioning of the international system. It’s not hard to

posit equally untenable examples—if a bankruptcy proceeding were commenced in the Kyrgyz

Republic against IBM simply because it maintained a bank account or an office there, that would

be equally shocking and unreasonable. The Debtors have already conceded that most of their

vendors and suppliers are unfamiliar with the Bankruptcy Code and these Chapter 11 Cases only

create friction with the continued function of the international system. Economically, Centerra’s

interference with the Debtors’ vendors, including assertions that the automatic stay in these

Chapter 11 Cases prevents suppliers and vendors from continuing to perform under any contracts,

disrupts international supply chains.75 The friction on the international system is already evident

by the pendency of the Kyrgyz Republic Proceedings and the Debtors’ efforts to have this Court

stand in judgment of foreign court proceedings and the acts of a foreign sovereign nation.

70. With respect to factors (c), (g), and (h), the Kyrgyz Republic’s interest in this case

massively exceeds that of the United States and the likelihood that any rulings entered into by this

Court conflict with the laws of the Kyrgyz Republic is high. As noted, KGC is the largest private

sector employer and taxpayer in the Kyrgyz Republic and accounts for over 10% of its GDP. The

Kyrgyz Republic has a strong interest in regulating the Debtors which are central to its economy.

One of the principal concerns of international comity is maintaining mutual respect between

nations and the ability of the Kyrgyz Republic to regulate a company that encompasses such a

75 Idirisov Declaration, at 3-5.


35

large share of its economy is a matter of mutual respect.76 Since the Petitions were filed without

the proper authority and since the Charters mandate that any restructuring is conducted pursuant

to Kyrgyz law, the Chapter 11 Cases already substantially conflict with the laws of the Kyrgyz

Republic. The only way to avoid these conflicts and at the same time resolve the issues for which

the Petitions were filed is to grant this Motion and allow the parties’ dispute to be resolved in

Arbitration just as they agreed. Given that none of the Restatement factors weighs in favor of this

Court exercising jurisdiction, this Motion should be granted.

3. Act of State Doctrine

71. The act of state doctrine is another manifestation of international comity and similarly

requires this Court to grant the Motion. Oetjen v. Cent. Leather Co., 246 U.S. 297, 303-04 (1918)

(“The principle that the conduct of one independent government cannot be successfully questioned

in the courts of another…rests at last upon the highest considerations of international comity and

expediency.”).77

72. The act of state doctrine provides that United States courts will not question the validity

of a foreign act of state fully performed within its borders. W.S. Kirkpatrick & Co. v. Envtl.

Tectonics Corp., Int’l, 493 U.S. 400, 405 (1990) (the act of state doctrine bars U.S. courts from

“declar[ing] invalid the official act of a foreign sovereign performed within its own territory”).78

Behind the act of state doctrine is the recognition “that the conduct of foreign relations is within

76 See JP Morgan Chase Bank v. Altos Hornos de Mexico, S.A. de C.V., 412 F.3d 418, 423 (2d Cir. 2005)

(“international comity is clearly concerned with maintaining amicable working relationships between nations, a

“shorthand for good neighbourliness, common courtesy and mutual respect between those who labour in adjoining

judicial vineyards.”). 77 First Nat’l City Bank v. Banco Nacional de Cuba, 406 U.S. 759, 765 (1972) (“The act of state doctrine, like the

doctrine of immunity for foreign sovereigns, has its roots, not in the Constitution, but in the notion of comity

between independent sovereigns”). 78 Underhill v. Hernandez, 168 U.S. 250, 252 (1897) (same).


36

the province of the executive branch and [courts applying the doctrine] have refused under certain

circumstances to become embroiled in international political controversies.”79

73. Here, the Debtors are asking this Court to intervene in a dispute arising directly from

legislation passed by the Kyrgyz Republic to protect the health, safety, environment and welfare

of the people of the Kyrgyz Republic as well as measures effectuated by the executive branch of

the Kyrgyz Republic, relating to mining activities within its own borders, with respect to an entity

formed under Kyrgyz law. That is not an appropriate undertaking for any U.S. court. Indeed,

allowing these Chapter 11 Cases to continue would require this Court to sit in judgment on the

legislative, executive and judicial acts of the Kyrgyz Republic carried out within its own territory

as against non-U.S. citizens. Under the act of state doctrine, this Court is required to deem as valid

actions of the Kyrgyz Republic fully performed within its borders. W.S. Kirkpatrick & Co., 493

U.S. 409 (the act of state doctrine “requires that…the acts of foreign sovereigns taken within their

own jurisdictions shall be deemed valid.”).80

D. The Court Should Dismiss the Bankruptcy Cases on Grounds of

Forum Non Conveniens

74. The doctrine of forum non conveniens provides courts with the discretion to dismiss a

case where doing so would be in the interest of “convenience, fairness, and judicial economy…”.

See Magi XXI, Inc. v. Sato della Citta del Vaticano, 714 F.3d 714, 720 n.6 (2d Cir. 2013). This

doctrine may be invoked by courts even where jurisdiction and venue properly lies with the court

in question. See Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 100 (2d Cir. 2000). This Court

79 Associated Container Transp. (Australia) Ltd. v. United States, 705 F.2d 53, 61 (2d Cir. 1983). 80 The Debtors have described the Kyrgyz Republic as corrupt and inhospitable to international investment. See,

e.g., Desjardins Declaration ¶ 27. These statements reflect Centerra’s biased viewpoints and are baseless and

irrelevant: the acts of the Kyrgyz Republic taken within its own jurisdiction must be deemed valid under the act

of state doctrine.


37

should exercise its discretion to dismiss the Chapter 11 Cases because doing so would be in the

interest of convenience, fairness and judicial economy.

75. Courts in the Second Circuit have developed a three-step analysis to determine when a

case should be dismissed on forum non conveniens grounds. The first step is a determination of

the degree of deference that ought to be afforded to the initial choice of forum; the second is a

consideration of whether an adequate alternative forum exists; and the third a balancing of the

private interests of the parties against the applicable public interests.81 Here, all three “steps”

support dismissal.

76. While generally speaking a plaintiff’s choice of forum is presumed adequate, where a

foreign entity brings suit in the United States that choice is afforded less deference.82 This is

because the foreign entity’s choice is inherently inconvenient to itself, thus creating suspicion that

an ulterior motive may exist. When assessing the motivation behind the initial choice of forum

courts consider five factors: (i) the convenience of the plaintiff’s residence in relation to the chosen

forum; (ii) the availability of witnesses or evidence to the forum district; (iii) the defendant’s

amenability to suit in the forum district; (iv) the availability of appropriate legal assistance; and

(v) other reasons relating to convenience or expense.83

77. Here, there is nothing convenient about the Debtors choosing this Court to assert their

alleged grievances as the Debtors themselves are both Kyrgyz entities headquartered over six

thousand miles away from New York City and are owned by Canadian entities. Not a single

81 See Strategic Value Master Fund, Ltd. v. Cargill Fin. Servs., Corp., 421 F. Supp. 2d 741, 753 (S.D.N.Y. 2006);

In re Commodore Int'l, Ltd., 242 B.R. 243, 263 (Bankr. S.D.N.Y. 1999), aff'd, No. 00CIV.1679(SAS), 2000 WL

977681 (S.D.N.Y. July 17, 2000) (applying the same in the bankruptcy context and dismissing an adversary

proceeding on the grounds of lack of jurisdiction, comity and forum non conveniens). 82 See Strategic Value, 421 F. Supp. 2d at 754; see also Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549

U.S. 422, 430 (2007); Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256 (1981) (“a foreign plaintiff’s choice deserves

less deference”). 83 See In re Hellas Telecomms. (Luxembourg) II SCA, 555 B.R. 323, 346 (Bankr. S.D.N.Y. 2016) (citations omitted).


38

significant party to these Chapter 11 Cases resides in the United States. What is more, the majority

of the relevant evidence, documents and witnesses are located in the Kyrgyz Republic.84

78. Even if the Debtors’ choice of forum were convenient for any significant party in these

Chapter 11 Cases, which it is not, the Kyrgyz Republic is not amenable to proceedings in the

United States related to Kyrgyz entities formed under Kyrgyz law. Indeed, the Kyrgyz Republic

is a sovereign nation entitled to immunity under FSIA. See supra ¶¶42-52. It also does not serve

judicial economy, nor is it an efficient use of the parties’ resources, to engage language translators

and Kyrgyz legal experts to advise this Court on the application of Kyrgyz law.

79. It is apparent that there are at least two alternative adequate fora for the resolution of the

key issues in the Chapter 11 Cases: the Arbitration and the Kyrgyz Republic. An alternative forum

is adequate if: (i) defendants are amenable to service of process there and (ii) it permits litigation

of the dispute. See In re Arbitration between Monegasque De Reassurances S.A.M. v. Nak

Naftogaz of Ukraine, 311 F.3d 488, 499 (2d Cir. 2002). Here, the key dispute in the Chapter 11

Cases is the propriety of the Governance Action which is already a subject of the Arbitration.

80. The Arbitration is an adequate alternative forum for the Debtors and Centerra since they

were the parties who commenced the arbitral proceedings in Sweden pursuant to a process by

which the parties contractually agreed. The Kyrgyz Republic is also an available forum — one

which is wholly consistent with the parties’ expectations, considering Centerra voluntarily

incorporated the Debtors in the Kyrgyz Republic, under Kyrgyz law, and included in the Charters

a requirement that restructurings of the Debtors would be undertaken under Kyrgyz law and in the

84 See Scottish Air Int’l Inc. v. British Caledonian Grp., PLC, 81 F.3d 1224, 1232-33 (2d Cir. 1996) (affirming

dismissal pursuant to forum non conveniens where the majority of relevant witnesses did not reside in the initial

forum); Strategic Value, 421 F. Supp. 2d at 768 (“[T]he Second Circuit has frequently weighed in favor of

dismissal where, as here, ‘all but a few’ relevant documents are located in a foreign jurisdiction.”).


39

Kyrgyz Republic.85 The Debtors’ unsubstantiated ad hominem attacks on the Kyrgyz Republic and

its judicial system smacks of U.S. jingoism and should not be credited by this Court. In any event,

such complaints are properly disregarded because it was the Debtors themselves who voluntarily

agreed to incorporate under Kyrgyz law and operate in that jurisdiction. They cannot now complain

about the forum and governance they selected.

81. The third and final step of the forum non conveniens analysis is the weighing of the

private and public interests to determine where a dispute should be adjudicated. These factors

overwhelmingly weigh in favor of this Court dismissing the Chapter 11 Cases. The private interest

factors, used by courts to weigh the convenience of competing forums to the parties, include: (i)

the relative ease of access to sources of proof; (ii) the availability of compulsory process of

attendance of witnesses, and the cost thereof; (iii) the possibility of view of premises (if

appropriate); and (iv) all other practical problems which would either complicate or simplify the

trial. See Strategic Value, 421 F. Supp. 2d at 757. The public interest factors weigh the interest of

justice and judicial economy. Scottish Air, 81 F.3d 1224 at 1232 (citations omitted). For the reasons

set forth herein, the Arbitration is an available forum that can efficiently and fairly resolve the

parties’ dispute consistent with the parties’ agreements. Both the private and public interest factors

are well satisfied through the Arbitration and the accompanying legal process. To be sure, there is

virtually no U.S. public interest in the outcome of this dispute. Accordingly, the Court should

dismiss these Chapter 11 Cases on forum non conveniens grounds.

85 It must also be noted that while Debtors’ counsel has repeatedly advanced the unsupported assertion that the

Debtors are unable to retain legal experts due to “potential criminal liability,” no such liability exists and their

repeated assertion is yet another example of their disrespectful attitude towards the sovereignty of the Kyrgyz

Republic. Nothing in the Temporary Management law creates criminal liability for rendering an expert opinion

in favor of the Debtors or Centerra. Alenkina Declaration, at 11-12. It is likely that the Debtors’ untenable legal

position in their interpretation of Kyrgyz law that has left them unable to retain an expert. Centerra’s improper

actions and flagrant disregard of Kyrgyz law has not helped either.


40

NOTICE

82. Notice of this Motion has been provided to: (a) the Office of the United States Trustee

for the Southern District of New York; (b) the Debtors, (c) Centerra; (d) all creditors listed in the

Debtors’ schedules; and (e) to the extent not listed herein, those parties requesting notice pursuant

to Bankruptcy Rule 2002. The Kyrgyz Republic submits that, in light of the nature of the relief

requested, no other or further notice need be provided.

WHEREFORE, the Kyrgyz Republic respectfully requests that the Court enter the

annexed Order dismissing the Chapter 11 Cases with prejudice.

Dated: July 18, 2021

By: /s/ Benjamin Mintz

ARNOLD & PORTER KAYE SCHOLER LLP

Benjamin Mintz

Lucas B. Barrett

250 W. 55th Street

New York, NY 10019-9710

Telephone: (212) 836-8000

Facsimile: (212) 836-8689


[email protected]

-and-

Seth J. Kleinman



Telephone: (312) 583-2300

Facsimile: (312) 583-2360




EXHIBIT A

Proposed Order


2



In re:



Debtors.

Chapter 11

Case No. 21-11051 (LGB)


ORDER DISMISSING BANKRUPTY CASES

AND GRANTING RELATED RELIEF2

Upon the Motion of the Kyrgyz Republic to Dismiss Chapter 11 Bankruptcy Cases (the

“Motion”) for entry of an order, pursuant to 11 U.S.C. §§ 305(a) and 1112, 28 U.S.C. §§ 1330,

1332(a), and 1604, and on the grounds of international comity and the Act of State doctrine,

dismissing these Chapter 11 Cases and granting related relief; this Court having jurisdiction to

consider the Motion pursuant to 28 U.S.C. §§ 157 and 1334; and venue of these Chapter 11 Cases

and the Motion in this district being proper pursuant to 28 U.S.C. §§ 1408 and 1409; and this

matter being a core proceeding pursuant to 28 U.S.C.§ 157(b); and this Court having found that

proper and adequate notice of the Motion and the relief requested therein has been provided in

accordance with the Bankruptcy Rules, the Local Rules, and all General Orders applicable to

chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York, and

that, except as otherwise ordered herein, no other or further notice is necessary; and objections (if

any) to the Motion having been withdrawn, resolved or overruled on the merits; and a hearing

having been held to consider the relief requested in the Motion and upon the record of the hearing

and all of the proceedings had before this Court; and, after due deliberation, the Court having found

1 The Debtors’ corporate headquarters is located at 24 Ibraimova Street, 720001, Bishkek, the Kyrgyz Republic. 2 Capitalized terms used but not otherwise defined herein shall have the definitions ascribed to such terms in the

Motion.


3

and concluded that the movant has established sufficient cause for the dismissal of these Chapter

11 Cases; now therefore;

IT IS HEREBY ORDERED THAT:

1. The Motion is GRANTED.

2. The Debtors’ Chapter 11 Cases are dismissed with prejudice.

3. The Debtors shall pay to the United States Trustee the appropriate sum required

pursuant to 28 U.S.C. § 1930 and any applicable interest thereon pursuant to 31 U.S.C. § 3717

within ten days of the entry of this order and simultaneously file and provide to the United States

Trustee an operating report indicating all cash disbursements made by each of the Debtors during

the calendar quarter in which this Order is entered..

4. The terms and conditions of this Order shall be immediately effective and

enforceable upon entry of this Order.

5. The Debtors are authorized to execute and deliver all instruments and documents,

and take such other actions as may be necessary or appropriate to implement and effectuate the

terms of this Order.

6. The Court retains jurisdiction with respect to all matters arising from or relating to

the interpretation, implementation and/or enforcement of this Order.

Dated: ____________________________________

New York, New York

The Honorable Lisa G. Beckerman

United States Bankruptcy Judge

US 169985829
