Brazil's Banco Cruzeiro Seeks Chapter 15 Relief In Miami

Brazilian bank Banco Cruzeiro do Sul SA on Wednesday sought Chapter 15 relief in Miami, where a liquidator suspects some of its assets are located, after a Brazilian regulator took over its operations, Law360 reported. The bank’s liquidator and foreign representative, Eduardo Felix Bianchini, is asking a Florida bankruptcy judge to recognize the liquidation pending before the Central Bank of Brazil as the foreign main proceeding. The Central Bank seized Banco Cruzeiro’s and its affiliates’ assets in June 2012. Court filings do not explicitly state the reason for the bank’s financial troubles, but Brazilian news reports said that in 2012 the bank’s president, Luis Felipe Indio da Costa, and his son Luis Octavia were accused of massive financial fraud. The court documents do say that as of March, the bank’s assets totaled about R$7.7 billion ($3.5 billion), and its liabilities added up to R$10.3 billion. The Central Bank placed Banco Cruzeiro and four affiliates under the control of the country’s Credit Guarantee Fund, known as the FGC, which oversees Brazil’s deposit insurance program. At that time, the assets of 15 insiders were frozen. The FGC attempted to find a buyer for Banco Cruzeiro, but was unsuccessful and in September 2012 the Central Bank placed Banco Cruzeiro in a liquidation proceeding. The bank owes the FGC R$1.95 billion, making it Banco Cruzeiro’s largest creditor.