Citing Stalled Peru Sale, Opposition To Pacific Andes’ Bankruptcy Mounts

Several of Pacific Andes' major lenders believe that the fishing conglomerate is improperly using US and Peruvian bankruptcy laws to "derail" a planned sale of its Peruvian assets, Undercurrent News reported. In court filings on July 8, several creditor banks of the 16 Pacific Andes entities that declared bankruptcy in the US on June 30 questioned directors' motivations to have three Peruvian subsidiaries of the group file for bankruptcy under that country's laws rather than in the US. The bankruptcy filings effectively halted a sale of the Peruvian assets, which was designed to repay Pacific Andes' creditors. The subsidiaries -- CFG Investment, Corporacion Pesquera Inca (Copeinca), and Sustainable Fishing Resources -- legally hold the Pacific Andes group's lucrative fishmeal producing assets and are owned by Pacific Andes International Holding (PAIH) subsidiary China Fishery. The Peru subsidiaries, which include the proceeds of the 2013 purchase of Peru's Copeinca, annually produce 300,000 metric tons of fishmeal and 50,000t of fish oil annually generating $580 million in revenues, Francisco Paniagua, CFG Investment's general manager said in a filing. But instead of filing under chapter 11 of the US bankruptcy code, the three Peruvian subsidiaries filed for "involuntary" bankruptcy proceedings in Peru, prompted by Peruvian creditors who are owed about $1.1m, or about .01% of the companies' total debt, four large banks opposed to the US bankruptcy argue. The three Peruvian subsidiaries instead filed under chapter 15 of the US Bankruptcy Code, which would prompt a court to recognize the authority of the foreign court. That strikes a consortium of four Pacific Andes lenders -- Rabobank, Standard Chartered Bank, CITIC Bank International and DBS Bank -- as improper. Read more.