4th Cir.: J. Robert van Faassen, LLM v. Greg Lindberg- Another Twist in the Greg Lindberg Saga, FAA Deadline Is Mandatory

Summary:

The Fourth Circuit's published decision in J. Robert van Faassen, LLM v. Greg Lindberg addresses an important question involving international arbitration: is the three-year deadline in the Federal Arbitration Act ("FAA") for confirming a foreign arbitration award merely permissive, or is it a true statute of limitations?

The answer, according to the Fourth Circuit, is that the deadline means exactly what it says.

The underlying dispute arose from the collapse of Dutch life insurance company Conservatrix, which had been acquired by Greg Lindberg and related entities. Under the acquisition agreements, Lindberg and his companies agreed to maintain specified solvency levels so that Conservatrix could continue meeting its obligations to policyholders. When those capital requirements were allegedly ignored, Conservatrix initiated arbitration before the Netherlands Arbitration Institute.

The arbitrator ruled in Conservatrix's favor in January 2020, ordering Lindberg and the related entities to restore the company's solvency ratio and imposing a staggering €150 million penalty for failing to do so, along with arbitration costs and attorney fees. Dutch courts—including the Court of Rotterdam, the Hague Court of Appeal, and ultimately the Supreme Court of the Netherlands—confirmed the award. Nevertheless, the obligations remained unpaid, Conservatrix entered liquidation, and its insolvency practitioners sought enforcement in the Middle District of North Carolina because Lindberg resides there.

The trustees pursued two separate theories.

First, they sought confirmation of the arbitration award under the New York Convention and 9 U.S.C. § 207 of the FAA.

Second, they sought recognition of the Dutch court judgment under the North Carolina Uniform Foreign-Country Money Judgments Recognition Act.

The district court held that the FAA's three-year period was merely permissive and confirmed the arbitration award despite the petition being filed more than three years after the award was issued.

The Fourth Circuit reversed.

Judge Rushing, writing for a unanimous panel, concluded that while the statute says a party "may apply" for confirmation, the phrase "within three years" imposes a mandatory limitation on when that application may be filed. Reading the statute otherwise would effectively erase Congress's time limitation from the statute altogether. The Court also declined to extend its earlier decision interpreting the FAA's domestic arbitration provisions because Congress created a different statutory framework for international arbitration awards.

That did not end the case, however.

The Fourth Circuit also held that the Dutch courts' judgment confirming the arbitration award qualifies as a foreign-country money judgment under North Carolina law. Although the Recognition Act does not apply directly to arbitral awards, it does apply to judgments entered by foreign courts confirming those awards. Because the Dutch judgment was final, conclusive, and enforceable, the trustees may still attempt to enforce it in North Carolina even though confirmation under the FAA is unavailable. The case therefore returns to the district court to determine whether the Dutch judgment itself should be recognized and enforced.

Commentary

This is yet another chapter in what has become one of North Carolina's longest-running collections of civil, bankruptcy, insurance, and insolvency litigation involving Greg Lindberg. Over the past several years, the courts have addressed everything from arbitration awards and fraudulent transfer claims to interlocutory appeals, receiverships, insurance regulation, and bankruptcy-related disputes.

Readers interested in following that broader story may also want to review these earlier posts:

• Southland National Insurance Corp. v. Lindberg, where the North Carolina Court of Appeals rejected repeated attempts to obtain interlocutory review while underlying litigation continued.

• Parrott v. Yeh, a fraudulent transfer action in the Bankruptcy Court for the Middle District of North Carolina examining "trigger creditors" and badges of fraud in litigation connected to Lindberg.

• Universal Life Insurance Co. v. Lindberg, in which the Fourth Circuit affirmed confirmation of another arbitration award.

• Dash BPO v. Lindberg, where the Fourth Circuit held that allegations of fraudulent concealment were insufficiently pleaded to toll the statute of limitations.

From a procedural standpoint, this opinion serves as an important reminder that winning an arbitration is only part of the battle. Parties seeking to enforce international arbitration awards must pay close attention to the FAA's procedural deadlines. Waiting too long can forfeit the streamlined federal confirmation procedure.

At the same time, the opinion illustrates the value of considering multiple enforcement avenues. The trustees' decision to pursue recognition of the Dutch judgment under North Carolina's Foreign-Country Money Judgments Recognition Act may ultimately preserve a path to collection even though the FAA route was lost.

For North Carolina practitioners, the decision is also a useful primer on the interaction between the FAA, the New York Convention, and North Carolina's judgment-recognition statute. International insolvency and cross-border enforcement issues remain relatively uncommon in consumer bankruptcy practice, but as global commerce increasingly intersects with domestic litigation, these procedural rules become more important.

Perhaps the broader lesson is one bankruptcy lawyers already know well: procedural deadlines matter. Whether filing a proof of claim, objecting to discharge, appealing an order, or seeking confirmation of an international arbitration award, even a strong substantive case can be undermined by missing a statutory deadline.