Kumtor Gold says Kyrgyzstan continues to violate automatic stay

By Sarah Lizee

Olympia, Wash., Aug. 26 – Kumtor Gold Co. CJSC is again seeking enforcement of an automatic stay against the Kyrgyz government, according to a motion filed Wednesday with the U.S. Bankruptcy Court for the Southern District of New York.

The company is also seeking additional sanctions against Kyrgyzstan for its “continued and willful violations of the automatic stay,” including monetary sanctions in the amount of $1 million per day for each day the government continues to violate the automatic stay.

“This is the second time the Kyrgyz government’s actions have forced the debtors to seek relief from this court to enforce the automatic stay,” the company said in its motion.

Kumtor Gold said that after holding a hearing on July 19, the court sanctioned the Kyrgyz government “for trying to undermine these Chapter 11 cases” by seeking and obtaining a preliminary injunction in the Kyrgyz court to nullify the corporate resolutions authorizing the commencement and prosecution of the Chapter 11 cases.

“Notwithstanding the abundantly clear prior order of this court that its actions were in violation of the automatic stay, the Kyrgyz government has continued and intensified its efforts to deprive the debtors of the protections afforded to them under the bankruptcy code much in the same way that it has illegally seized control of the debtors’ primary asset, the Kumtor gold mine,” the company said.

“Making matters worse, the Kyrgyz government’s actions to thwart these Chapter 11 cases have continued notwithstanding the Kyrgyz government’s filing of its motion to dismiss, the appropriate mechanism for adjudicating any dispute the Kyrgyz government may have about the propriety of these Chapter 11 cases.”

The company claims the Kyrgyz government continues to “pursue remedies outside of this court” to address the issues raised in the motion to dismiss, in violation of the automatic stay.

Bishkek, Kyrgyzstan-based Kumtor Gold is owned by Toronto-based Centerra Gold, a mining and exploration company. The Chapter 11 case number of Kumtor Gold is 21-11051. It filed bankruptcy on May 31.

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