S.D.N.Y. Bankruptcy Court Overrules Bondholder Objections to Enforce Brazilian Reorganization Plan

On August 27, 2014, the U.S. Bankruptcy Court for the Southern District of New York (the “Court”) issued a decision enforcing the terms of a Brazilian reorganization plan pursuant to Chapter 15 of the U.S. Bankruptcy Code. In re Rede Energia, S.A., Case No. 14-10078 (SCC) (Bankr. S.D.N.Y. August 27, 2014), ECF No. 35 (the “Decision”). Bankruptcy Judge Shelley C. Chapman rejected challenges by a minority group of bondholders who had alleged that the Brazilian Bankruptcy Proceeding was contrary to U.S. public policy. The Decision is favorable for foreign companies seeking recognition and enforcement of their foreign restructuring proceedings in the United States. It also represents continued validation of the substantive protections and due process aspects of Brazil’s insolvency law regime, which underwent a major overhaul in 2005. Rean more