Sunday, June 1, 2014
OGX bankruptcy-related lawsuits filed in New York and Rio de Janeiro
The rescue of the troubled oil firm founded by Brazilian businessman Eike Batista is becoming a legal battlefield, The Wall Street Journal reported. Creditors are scheduled to vote on Tuesday on a plan to restructure Oleo e Gas Participacoes SA, formerly known as OGX Petroleo e Gas Participacoes SA, which filed for bankruptcy protection last year. But two creditors have come forward to try to block the vote. The latest is UK-based Perenco, an independent service provider, which has asked a judge in Rio de Janeiro to give the company's many bondholders only a single vote on the restructuring plan. Such a move would give remaining creditors, mainly suppliers such as Perenco, more influence in Tuesday's vote and in shaping the future of Oleo e Gas. Judge Jesse Torres hasn't made a resolution on Perenco's injunction request, according to Darwin Correa, a lawyer at Paulo Cezar Pinheiro Carneiro law firm, which represents Mr. Batista's oil firm. Representatives for Perenco and the judge couldn't be reached Friday afternoon.
Mon., June 2, 2014
A group of small creditors in the bankrupt former flagship company of Brazilian billionaire Eike Batista have initiated legal action against Deutsche Bank alleging the institution acted unfairly during restructuring of the oil producer’s debts, the Financial Times reported. The lawsuit, filed in the Supreme Court of the State of New York, alleges Deutsche Bank, the trustee of $3.6bn of defaulted notes issued by OGX Oleo e Gas Participações, favoured majority bondholders in a deal to restructure the company’s debts. “OGX agreed to push through a plan of reorganisation by which Deutsche Bank and its affiliates would make distributions of up to 75 per cent . . . to the majority noteholders and only 13 per cent to minority noteholders,” said the suit, filed by a group of US, UK, Cayman Island and Irish registered funds. They said they collectively held about $82m in principal value of the notes while “majority noteholders” held 55 per cent. “This is really a dispute between two bondholder groups that is pending before the Brazilian courts,” Deutsche Bank said in a statement. “We believe this suit is without merit and Deutsche Bank intends to defend itself vigorously.”