US bankruptcy proceedings initiated against 1MDB-linked firms

Liquidators have initiated Chapter 15 bankruptcy proceedings in the US involving a slew of entities linked to the money trail of the embezzlement at 1MDB.

A total of nine entities have been named in the court filing made at the Florida Southern District Bankruptcy Court yesterday, including Brazen Sky Limited, Aabar Investments PJS Limited, and Tanore Finance Corporation.

“While the general details of the fraud have been widely reported on, the full extent of the fraud is unknown.

“The liquidation of the debtors forms part of an international effort to trace and recover funds misappropriated through 1MDB,” the liquidators said in court documents sighted by Malaysiakini.

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This follows similar proceedings since May in the same court that centred around another 1MDB-linked entity – SRC International.

Chapter 15 refers to provisions in US bankruptcy law that allows foreign persons or entities to file for bankruptcy in the US, and thereby take advantage of the US court system to deal with assets in the country.

In this case, the liquidators are seeking US recognition for the liquidation process of the companies that are already taking place in the British Virgin Islands and the Cayman Islands.

“Since their appointment, the liquidators have taken a number of steps to identify, secure, and take into their possession and control the assets and records of the debtors.

“The liquidators have identified various individuals and entities located in the United States who either participated or otherwise possess knowledge relating to the above transactions.

“The liquidators also believe that part of the debtors’ missing funds are located in the United States as some of the missing funds passed through US entities.

“Accordingly, the liquidators file this Chapter 15 to (i) obtain information from these third parties and continue their investigations on the loss and misappropriation of the debtors’ funds, and (ii) to the extent they localise any assets, take control and liquidate the same for the benefit of the debtors’ estates,” they said in the court filing.

The full list of debtors involved in the proceedings are:

1. Aabar Investments PJS Limited

2. Affinity Equity International Partners Limited

3. Blackstone Asia Real Estate Partners Limited

4. Brazen Sky Limited

5. Bridge Global Absolute Return Fund SPC

6. Pacific Rim Global Growth Limited

7. Selune Limited

8. Tanore Finance Corporation

9. Vasco Investment Services SA

- Mkini