Nature of the Case
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Facts
P is an investment fund that was formed under the Cayman Islands. It served as a Cayman Islands-based feeder fund to a U.S.-based master fund, Ascot Partners, a Delaware limited partnership. P invested substantially all of its assets in Ascot Partners as an admitted limited partner of Ascot Partners, and Ascot Partners invested substantially all of its assets in or through BLMIS, Bernie Madoff's investment firm. In December 2008, BLMIS disintegrated and P received a large number of shareholder redemption requests. P halted all activity and sat and waited to see what it gets from the liquidation of BLMIS. In 2009, the New York Attorney General sued Merkin, the founder of P, and related entities alleging that Merkin caused investors in P to suffer losses in connection with the Madoff Ponzi scheme. The New York Supreme Court appointed a receiver for Ascot Partners. P was joined solely as a 'relief defendant.' A settlement with Merkin and his related entities was reached for $410 million. P itself did not receive any distributions from the Merkin Settlement and neither Ascot Fund nor its directors played any role in determining the distribution plan under the Merkin Settlement. Picard, as trustee for the liquidation of BLMIS, commenced an adversary proceeding against, Merkin, Ascot Partners, and P. The fraudulent transfer claims asserted against P as an initial transferee were dismissed with prejudice by stipulation of the parties. On July 3, 2018, the Court approved a settlement. Ascot Partners received an allowed customer claim in the sum of $501,734,338.00. From its catch-up distribution of $320,628,311.35, it paid the Trustee $280 million, leaving a balance of $40,628,311.35. Ascot Partners was entitled to receive additional distributions on a pari passu basis with other customers holding allowed customer claims. Ascot Partners has a substantial amount of money to distribute to its investors. Penner, a shareholder of the Ascot Fund, is concerned that a distribution methodology adopted by the Ascot Fund Board will be less favorable to it than any distribution methodology a New York court might adopt. The Board determined that it would be in the best interest of P to commence a voluntary liquidation under the management of independent liquidators. The Board's powers were suspended and the Liquidators assumed full managerial control over P under Cayman law. Penner filed this suit 'to avoid a Cayman liquidation whose duration and cost will resemble a familiar Dickensian tale,' and (b) the appointment of a temporary receiver over P. On January 16, 2019, the Liquidators filed the Cayman Proceeding bringing P's liquidation under the Cayman Court's supervision. Penner filed the chapter 15 petition on February 25,
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