A service of

Debtwire Latin America April Court Spotlight

by Arthur Almeida

 

In April, Light SA was granted a preliminary injunction prohibiting creditors from commencing or moving forward with individual lawsuits in order to initiate a mediation process with its financial creditors. The precautionary measure request was based in Brazilian mediation law, likely as an attempt to circumvent certain restrictions regarding the ability of public electric energy services providers to file for bankruptcy in Brazil. Several creditors challenged and appealed the decision, claiming that the protection the company was awarded could only be provided to a company in bankruptcy.

Source: Debtwire’s Restructuring Database

In other appellate news, Interjet and several creditors appealed the decision that ordered the liquidation of the Mexican low-cost airline. Also in Mexico, a complaint from Credito Real minority shareholders against the definitive suspension accompanying the company’s appeal for constitutional relief has been upheld by the 10th Collegiate Civil Court in Mexico City, which allowed the appeal of the company’s liquidation proceeding filed by the minority shareholders to proceed.

In Brazil, retailer Americanas SA obtained an injunction in an appeal filed with the Superior Court of Justice against a decision that allowed Banco Safra to keep the cash it retained to net the company’s debt. In addition, a Rio de Janeiro appellate court granted an appeal filed by Cimento Tupi‘s bondholders and ordered the Brazilian cement maker to (i) present an amended debt restructuring plan and (ii) schedule a creditor meeting to vote on it.

A Sao Paulo court of appeals confirmed the sanctioning of Renova Energia’s debt restructuring plan, rejecting the appeal filed by dissident creditor Fundo de Liquidacao Financeira, and Samarco unions appealed the ruling that rejected their alternative restructuring plan.

Source: Debtwire’s Restructuring Database

Also last month, two judicial recovery processes were ordered closed: (i) the 2019 case of Queiroz Galvao Energia affiliate Ibitu Energetica and (ii) the 2021 case of Brazilian sugar and ethanol producer Grupo USJ. In both cases, the companies demonstrated they had been able to complete the debt restructuring proposals approved by creditors and sanctioned by the courts. Also closed were the Chapter 11 cases of certain affiliates of Chilean Corp Group Banking, with only the main proceeding remaining open.

Source: Debtwire’s Restructuring Database

As for post-petition funding developments, the court overseeing Oi SA’s judicial recovery approved a USD 275m debtor-in-possession (DIP) facility, allowing the telecom services provider to enter into a note purchase agreement, which will be used to maintain the company’s business operations throughout the in-court restructuring process.

Source: Debtwire’s Restructuring Database

In cross-border news, in April Ocyan (formerly Odebrecht Oil and Gas) filed a US Chapter 15 petition, following the sanctioning of the prepackaged reorganization plan presented by the company in the Extrajudicial Recovery proceeding conducted in Brazil. In addition, a hearing for Chapter 15 recognition of Cimento Tupi’s restructuring plan, originally scheduled for 11 April, was pushed back to 23 May.

Source: Debtwire’s Restructuring Database

Last month was also marked by the creditor recognition ruling issued by the court handling Abengoa Mexico’s concurso proceeding; the presentation of AlphaCredit’s provisional creditor list for the third group of the company’s affiliates; and the creditors’ designation of Unifin Financiera’s interventor official. Finally, TV Azteca filed a motion to dismiss the involuntary Chapter 11 commenced by certain creditors, arguing that its claims could not be restructured in a US court as all its assets are located in Mexico.

 

The months ahead

Additional Reading

The state of retail in a post-pandemic world – 1Q23 Global Legal Analyst Quarterly Report

CASE PROFILE: Light requests creditor protection without using Brazilian bankruptcy framework

CASE PROFILE: Novonor subsidiary ODN I Perfuracoes Ltda (Ocyan) seeks recognition of Brazilian restructuring plan in Chapter 15