Article/Intelligence
Oi SA Receives Green Light from Brazilian Court for US Chapter 15 Exit Decision
Relevant Document:
Statement
Oi SA foreign representative Rodrigo Caldas de Toledo Aguiar filed a statement today informing the U.S. bankruptcy court handling Oi’s chapter 15 case of an Aug. 18 ruling issued by the Brazilian appellate court overseeing the debtors’ recuperação judicial, or RJ, proceedings. According to the foreign representative, the Brazilian court’s ruling confirms that the bankruptcy court is “fully empowered” to adjudicate the debtors’ request to terminate their chapter 15 cases in preparation for a potential chapter 11 filing and does not “need to wait for a report by the judicial observer appointed in the Brazilian RJ Proceedings, or further rulings on the proposed amendment to the Brazilian RJ Plan” (emphasis added).
The foreign representative says the Aug. 18 ruling was issued in response to the debtors’ request to clarify the effect of Aug. 4 and Aug. 8 rulings issued by the RJ court and the Brazilian appellate court’s July 25 ruling on the debtors’ termination motion. The Brazilian appellate court’s July 25 ruling included a recommendation that the bankruptcy court defer issuing a decision on the termination request until the RJ court rules on the consequences of Oi’s noncompliance with and requested amendment to its RJ plan.
Judge Lisa G. Beckerman took the debtors’ termination motion under advisement yesterday, Aug. 18, after a two-day trial, indicating that she would “honor” the Brazilian court’s request and would be prepared to rule on a timely basis once the RJ court acts.
The Aug. 18 Brazilian appellate court’s ruling states that the propriety of the debtors’ request to dismiss the chapter 15 cases and file chapter 11 is the “sole responsibility of the U.S. court” and there is “no legal obstacle or impediment arising from this court relating to matters that do not fall within the Brazilian jurisdiction.” The foreign representative notes that the ruling maintains the Brazilian appellate court’s jurisdiction over claims “affected” in the RJ proceeding. The foreign representative explains that claims affected by an RJ proceeding include prepetition obligations and exclude guaranteed fiduciary liens and other exempt claims.
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