International Insolvencies: Journeys to the Center of the Debtors' Main Interests (2013 Caribbean Insolvency Symposium) - Leif M. Clark, Allan L. Gropper, Gregory S. Grossman, Daniel Bayfield
Divided by a Common Legal Language? Liquidations under Chapter 11 and Cayman Law (2013 Caribbean Insolvency Symposium) - Gordon MacRae, Geoff Varga, Jalil Asif, Colette Wilkins, Laura Hatfield, Brian K. Tester
Mexican glassmaker Vitro said on Monday it had begun a legal process to recover up to $1.59 billion in damages from hedge funds who sued the company in Mexico but lost on appeal, Reuters reported. Vitro went through a $3.4 billion bankruptcy reorganization in Mexico, but some creditors strenuously opposed that plan, and they have been fighting in U.S. courts. Vitro said in a statement that it could collect damages from a trust that has been holding new bonds and payments that correspond to investors who opposed the Mexican restructuring. "Under the applicable legal framework in (the state of) Nuevo Leon, the amount claimed could reach US$1.59 billion," the company said in a statement. Funds exposed to the claims for damages are Moneda, Brookville Horizons Fund, Davidson Kempner Distressed Opportunities Fund and Knighthead Master Fund, Vitro said. The funds had filed lawsuits to put Vitro and 17 subsidiaries into involuntary bankruptcy in Mexico, but those charges were dismissed on appeal, Vitro said. Read more.
PT Berlian Laju Tanker Tbk creditors, with a combined total of about $125.5 million in claims, filed an involuntary Chapter 11 petition against the Indonesian ship operator, Bloomberg reported. Gramercy Distressed Opportunity Fund II, Gramercy Distressed Opportunity Fund, and Gramercy Emerging Markets Fund, all located in Greenwich, Connecticut, filed today in U.S. Bankruptcy Court in Manhattan, according to court papers. In March, PT Berlian put about a dozen subsidiaries into Chapter 15 proceedings in Manhattan to complement a bankruptcy reorganization in Indonesia, where the companies are based. In April, the U.S. bankruptcy judge ruled that Indonesia is home to the so-called foreign main proceeding. Read more.
A U.S. judge ordered that 10 units of Mexican glassmaker Vitro SAB de CV be put into U.S. bankruptcy and he found that several of them had taken secret steps to prevent creditors from collecting money owed to them, Reuters reported. Several U.S. hedge funds led by Aurelius Capital Management and Elliott International hold defaulted notes issued by the subsidiaries and sought to put the units into bankruptcy. After the hedge funds sought involuntary bankruptcy proceedings, five of the subsidiaries secretly reincorporated in the Bahamas and one of the subsidiaries was sold, according to Harlin Hale, a U.S. bankruptcy judge in Dallas. "These acts were taken, apparently, to prevent creditors with guarantee claims from taking steps to collect on their judgments," Hale wrote in a 15-page opinion published on Tuesday. Vitro said in a statement it is considering an appeal. Read more.
Vitro SAB, the Mexican glassmaker that has been fighting hedge fund Elliott Management Corp. and other creditors over its restructuring, lost an appeals court bid to enforce its bankruptcy plan in the U.S., Bloomberg reported. The U.S. Court of Appeals in New Orleans ruled against Vitro today and upheld a bankruptcy court ruling that denied enforcement of the reorganization, a result that Vitro had warned would create “chaos” for the company. “Vitro cannot propose a plan that fails to substantially comply with our order of distribution and then defend such a plan by arguing that it would suffer were it not enforced,” the court said. “Vitro’s two-wrongs-make-a-right reasoning is unpersuasive.” Vitro was appealing a decision by U.S. Bankruptcy Judge Harlin DeWayne Hale in June that handed a victory to holders of Vitro’s $1.2 billion in defaulted bonds. Hale refused to grant enforcement of Vitro’s Mexican bankruptcy plan, saying it was contrary to U.S. policy. Vitro, which makes glass containers and car windshields, defaulted on $1.5 billion of debt in 2009 after construction and auto-glass sales fell. Vitro won approval for its reorganization plan in Mexico and then asked Hale to enforce it in the U.S. Read more.
Centrais Eletricas do Para SA, a Brazilian utility know as Celpa that was acquired this month by Equatorial Energia SA, filed for Chapter 15 bankruptcy protection in New York, Bloomberg reported. The company, based in Belem, Brazil, listed both debt and assets of more than $1 billion in documents filed today in U.S. Bankruptcy Court in Manhattan. Chapter 15 protects foreign companies from U.S. lawsuits and creditor claims while a company reorganizes abroad. Celpa is asking the U.S. court to recognize the proceeding pending before the Thirteenth Civil Court of Belem, State of Para, as a “foreign main proceeding,” according to court papers. Celpa filed for bankruptcy protection in Brazil in February after a four-year freeze on rates pushed up debt to about 2.3 billion reais. Celpa distributes electricity to 7.4 million people in 143 municipalities in the northern Brazilian state of Para, the company said in the February filing. Read more.
Europe: The Next Frontier in Restructuring?, 2012 ABI Mid-Level Professional Development Program - James Chesterman, Matthew Bonanno, David Riddell, Dennis Ruggere
Cross-Border Recognition Issues between U.S. and Mexico, 2012 U.S./Mexico Restructuring Symposium - Victor A. Vilaplana, Dario U. Oscós Coria, Robin E. Phelan, Lisa M. Schweitzer