Oi bondholders’ bankruptcy appeals dismissed by district court as moot

By Caroline Salls

Pittsburgh, Feb. 11 – Oi SA and Brazil judicial reorganization proceeding foreign representative Antonio Reinaldo Rabelo Filho won their bid for dismissal of bankruptcy appeals and a vacatur request filed by Oi’s international bondholder committee and Aurelius Capital Management, LP, according to an order filed Monday by the U.S. District Court for the Southern District of New York.

The appeals were dismissed as moot.

The district court said Aurelius “participated extensively” in Oi’s Dutch proceeding, beginning with its involvement in the company’s Chapter 15 bankruptcy proceeding as an interested party.

Although Aurelius “did not object to the recognition of Brazil as the [center of main interest] for any of the Chapter 15 debtors,” the district court said it did “request that certain language be included in the [Bankruptcy Court’s] order granting provisional relief.”

Specifically, the order said Aurelius requested language specifying that any interim stay granted by the U.S. Bankruptcy Court for the Southern District of New York “would not apply to actions and property outside the United States and, in particular, the Netherlands.”

The district court said the requested language was included in bankruptcy court orders.

According to Monday’s order, the bankruptcy court said Aurelius was acting as a result of a “strategic decision” to further the Dutch proceeding in which it was involved.

In addition, the district court said Aurelius voted in favor of the Brazilian judicial reorganization plan and, as part of a backstop agreement included in that plan, did not oppose completion of the Brazil reorganization plan. Entry of final confirmation orders in the Dutch proceeding was also a condition to completion of the Brazil plan, the order said.

As a result, the district court said it denied Aurelius’ vacatur request “given appellant’s above-outlined active involvement in the Dutch proceeding.”

The district court said Aurelius did not see vacatur in order to negate the bankruptcy court’s decisions, but instead “to erase certain factual findings.”

Oi is a Rio de Janeiro-based telecommunications service provider. It filed for Chapter 15 bankruptcy on June 21, 2016 under case number 16-11791.

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