Terraform Labs: Recognition of US Chapter 11 Liquidation Plan under SG Model Law
The Singapore International Commercial Court granted Terraform Labs Pte. Ltd.'s application for recognition of its Chapter 11 liquidation plan under the SG Model Law. The court allowed Terraform Labs to administer its Singapore assets according to the US plan and prevented new legal actions against the company, excluding the ongoing SIC/OA 3/2024. The decision was made by James Michael Peck IJ on 28 January 2025, with written grounds issued on 21 February 2025, and aimed to facilitate the cross-border restructuring of Terraform Labs.
1. Case Overview
1.1 Court
Singapore International Commercial Court1.2 Outcome
Reliefs granted under Article 21(1) of the SG Model Law.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court recognizes Terraform Labs' US Chapter 11 liquidation plan, facilitating asset administration and preventing new legal actions, except for ongoing case.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Terraform Labs Pte. Ltd. | Applicant | Corporation | Application Granted | Won | Rajan Menon, Smitha Menon, Felicia Soong Wanyi, Tan Chee Meng, Samuel Navindran |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| James Michael Peck | International Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Rajan Menon | WongPartnership LLP |
| Smitha Menon | WongPartnership LLP |
| Felicia Soong Wanyi | WongPartnership LLP |
| Tan Chee Meng | WongPartnership LLP |
| Samuel Navindran | WongPartnership LLP |
| Michael Williams | Kirkland & Ellis LLP |
| Casey McGushin | Kirkland & Ellis LLP |
| Chris Koenig | Kirkland & Ellis LLP |
| Elizabeth Jones | Kirkland & Ellis LLP |
| Yong Wei Jun Jonathan | Drew & Napier LLC |
| Samuel Soo Kuok Heng | Drew & Napier LLC |
| Fong Shi-Ting Fay | Allen & Gledhill LLP |
4. Facts
- Terraform Labs (TFL) incorporated in Singapore on 23 April 2018.
- TFL developed software for the Terra Blockchain Network.
- SEC alleged TFL sold unregistered securities.
- District Court granted partial summary judgment against TFL on 28 December 2023.
- TFL filed for Chapter 11 relief on 21 January 2024.
- Jury verdict against TFL for USD 4.5 billion on 5 April 2024.
- Chapter 11 Plan created a Wind Down Trust under Cayman law.
5. Formal Citations
- Re Terraform Labs Pte Ltd, Originating Application No 5 of 2024 and Summons No 57 of 2024, [2025] SGHC(I) 4
6. Timeline
| Date | Event |
|---|---|
| Terraform Labs Pte. Ltd. incorporated in Singapore. | |
| Terraform Labs files for Chapter 11 relief in the Bankruptcy Court. | |
| SIC/OA 5/2024 filed. | |
| Court recognizes Chapter 11 proceedings as a foreign non-main proceeding. | |
| District Court grants partial summary judgment against Terraform Labs. | |
| Jury in the District Court renders verdict against Terraform Labs for USD 4.5 billion. | |
| Confirmation Order entered. | |
| Debtors' assets and liabilities transferred to Wind Down Trust. | |
| SUM 57 commenced. | |
| Terraform Labs files written submissions and bundle of authorities. | |
| Singapore International Commercial Court grants reliefs under Art 21(1) of the SG Model Law. | |
| Grounds of decision issued. |
7. Legal Issues
- Recognition of Foreign Proceeding
- Outcome: The Court recognized the Chapter 11 proceeding in the Bankruptcy Court as a foreign non-main proceeding.
- Category: Procedural
- Sub-Issues:
- Foreign main proceeding
- Foreign non-main proceeding
- Related Cases:
- [2023] 2 SLR 421
- Appropriate Relief under SG Model Law
- Outcome: The Court granted reliefs allowing Terraform Labs to administer its Singapore assets and preventing new legal actions.
- Category: Substantive
- Sub-Issues:
- Administration of assets
- Stay of proceedings
- Related Cases:
- [2024] 3 SLR 254
- Adjournment Application
- Outcome: The Court denied the adjournment application.
- Category: Procedural
- Sub-Issues:
- Timeliness of application
- Prejudice to parties
- Related Cases:
- [2024] SGHC(I) 7
- Foreign Representation
- Outcome: The Court granted permission to the plan administrator's US counsel to plead matters relating to the administration of the Chapter 11 Plan.
- Category: Procedural
- Sub-Issues:
- Permission to plead
- Relevant proceedings
- Related Cases:
- [2024] 6 SLR 76
8. Remedies Sought
- Recognition of Chapter 11 Plan
- Authority to administer assets in Singapore
- Stay of proceedings
9. Cause of Actions
- Violation of US Securities Act of 1933
- Violation of US Exchange Act of 1934
10. Practice Areas
- Cross-Border Insolvency
- Restructuring
- Commercial Litigation
11. Industries
- Financial Services
- Technology
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ascentra Holdings, Inc (in official liquidation) and others v SPGK Pte Ltd | High Court | Yes | [2023] 2 SLR 421 | Singapore | Cited to define 'foreign proceeding' within the meaning of Art 2(h) of the SG Model Law. |
| Kiri Industries Ltd v Senda International Capital Ltd and another (Fan Jing, non-party) | Singapore International Commercial Court | Yes | [2024] SGHC(I) 7 | Singapore | Cited regarding the dismissal of an application for adjournment. |
| Re No Va Land Investment Group Corp | High Court | Yes | [2024] 6 SLR 76 | Singapore | Cited regarding the issue of foreign representation in the SICC. |
| Re Tantleff, Alan | High Court | Yes | [2023] 3 SLR 250 | Singapore | Cited for the proposition that the General Division of the High Court previously scrutinised and determined the fairness of the plan process in an earlier recent case involving Chapter 11. |
| Re PT Garuda Indonesia (Persero) Tbk and another matter | Singapore International Commercial Court | Yes | [2024] 3 SLR 254 | Singapore | Cited as the leading authority that supports recognition under the chapeau of Art 21(1) of the SG Model Law. |
| In re Agrogkor d.d. | United States Bankruptcy Court for the Southern District of New York | Yes | In re Agrogkor d.d. 591 B.R. 163 (Bankr. S.D.N.Y. 2018) | United States | Cited as an example of US courts recognizing foreign proceedings. |
| In re Avanti Communications Group | United States Bankruptcy Court for the Southern District of New York | Yes | In re Avanti Communications Group 582 B.R. 603 (Bankr. S.D.N.Y., 2018) | United States | Cited for the principle of comity and cooperation with foreign courts in Chapter 15 cases. |
13. Applicable Rules
| Rule Name |
|---|
| Singapore International Commercial Court Rules 2021 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 252 of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Third Schedule of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Title 11 of the United States Code (11 USC. § 101, et seq.) | United States |
| Legal Profession Act 1966 | Singapore |
| Supreme Court of Judicature Act 1969 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Chapter 11
- SG Model Law
- Foreign non-main proceeding
- Confirmation Order
- Wind Down Trust
- Singapore Escrow
- Beltran Parties
- Plan Administrator
- Terra Blockchain Network
- COMI
15.2 Keywords
- Insolvency
- Restructuring
- Cross-border
- Chapter 11
- Singapore
- Recognition
- Liquidation
16. Subjects
- Cross-Border Insolvency
- Restructuring
- International Law
- Bankruptcy Law
17. Areas of Law
- Insolvency Law
- Cross-border insolvency
- Restructuring Law