North America

A U.S. bankruptcy court is set to hear a dispute involving Brazilian telecoms company Oi SA and major shareholder Bratel Brasil SA, Bratel said on Wednesday, as investor discontent with Oi’s bankruptcy reorganization process shows no signs of abating, Reuters reported. On Friday, Bratel, a subsidiary of Portugal’s Pharol SGPS SA, which owns almost 28 percent of Oi’s common shares, said it had filed a legal complaint in the United States.

Sears Canada Inc. pension plan members are facing bleak prospects for getting their full pension payouts, according to a Toronto bankruptcy lawyer, Benefits Canada reported. “They won’t be made whole, regardless of how we look at this,” says Lou Brzezinski, a partner at Blaney McMurty LLP.

An investment fund that’s seeking a payout from the Cuban government on more than $1.3 billion in defaulted debt and back interest has hired the lawyer who won a settlement for hedge funds in a long-running legal battle against Argentina, Bloomberg News reported. CRF I Ltd. contracted Matthew McGill, a partner with Gibson, Dunn & Crutcher, to represent it in its claim against Cuba “including potential litigation,” according to a letter from the firm provided to Bloomberg News by a fund investor.

In a related story, the International New York Times reported that Canada's Fairfax Financial Holding has placed a bid of $300 million to buy Toys R Us's Canadian operations in bankruptcy. According to court papers filed late Thursday, the bidder is taking on a role of a "stalking horse" in a court-approved auction set for Monday in New York. That means it could be outbid in the auction if other buyers come in with a higher offer.

The world’s $164tn debt pile is bigger than at the height of the financial crisis a decade ago, the IMF has warned, sounding the alarm on excessive global borrowing, the Financial Times reported. The fund said the private and public sectors urgently needed to cut debt levels to improve the resilience of the global economy and provide greater firefighting capability if things went wrong. “Fiscal stimulus to support demand is no longer the priority,” the IMF said on Wednesday in a report published at its spring meetings in Washington.

Offshore oil driller Seadrill plans to emerge from Chapter 11 bankruptcy in late June or early July to catch the rising wave of rig market activity, its chief executive told said on Wednesday. The company won U.S. court approval on Tuesday for its multi-billion dollar debt restructuring plan after reaching a deal with more than 40 banks, unsecured creditors and shipyards, Reuters reported. “The confirmation is the most significant milestone in the process, and now we need to implement the plan over 60 to 90 days.

Scott Hannah says low borrowing costs and rising home prices have lured Canadians into a debt trap they may not escape if looming economic threats materialize, Bloomberg News reported. Hannah, president of the Credit Counselling Society, is seeing an influx of clients as higher financing costs begin to bite and people find it harder to manage. Phone calls were up 5.3 percent in the first quarter from a year earlier, while online chats increased 40 percent.

French oil major Total said it had bought several assets in the Gulf of Mexico for around $300 million, as part of the Cobalt International Energy company’s bankruptcy auction sale, Reuters reported. Total said it was buying a 20 percent stake in the North Platte asset. Following this move, Total will have a 60 percent overall stake in North Platte, with Statoil holding the remaining 40 percent. Total also bought a further 20 percent stake in the Anchor discovery, increasing its overall holding in that asset - which is operated by Chevron - to 32.5 percent.

An Ontario court has approved a restructuring plan for beleaguered junior Canadian gold company Banro Corp., paving the way for it to emerge from creditor protection, The Globe and Mail reported. Under the terms approved by the Ontario Superior Court of Justice, holders of US$207.5-million in debt instruments and US$20-million in gold-forward agreements will swap their securities for equity in a revamped Banro. Additional obligations under gold-forward agreements worth US$30.9-million will be deferred for a number of years.

Discovery Air has been granted creditor protection under the federal Companies' Creditors Arrangement Act, which means the company can stay in business and avoid bankruptcy. Protection is granted to companies with more than $5 million in debt, so they can work with their creditors to find a solution and restructure their businesses, CBC Canada reported. Discovery Air owes about $149 million in secured and unsecured debts as of January 31, according to court documents. Discovery Air is the parent company of three businesses: Great Slave Helicopters, Air Tindi and Discovery Mining Services Ltd.