Update 6/29/21: http://aviacionline.com/2021/06/latam-rejects-accusations-from-chilean-creditors-regarding-the-movement-of-funds-to-the-cayman-islands/
A group of Chilean creditors of Grupo LATAM filed an application in the Bankruptcy Court of the Southern District of New York, where the airline’s reorganization process is being processed, so that the judge in charge allows the litigation (to be included in the process) of about $ 1.3 billion that the airline has in companies established in the Cayman Islands.
According to what was published by our partner site AEROIN, based on a report by the Chilean newspaper El Mostrador, the claim of the creditors refers to an accusation of not having been duly informed of the amount, which would leave these 1.3 billion dollars out of the scope of the restructuring process. If the judge accepts the lawsuit, LATAM’s reorganization process would stop for at least two months to resolve the issue, delaying the airline’s departure from Chapter 11.
“It was 1.3 billion that LATAM transferred from its parent company to LATAM Finance, a company in the Cayman Islands, without properly disclosing it to the market, and we want to return it to the parent company. If successful, many Chilean bondholders and all the creditors of this parent company, including pilots and workers, will have this additional amount as collateral for their credits,” Andrés Mena, lawyer and partner at Paul Hastings LLP which represents local bondholders, explained to La Segunda newspaper.
The local creditors in question are represented by BancoEstado, which appears as Latam’s creditor for 490 million related to local bonds issued by the airline, but which is the agent of the bond owners: the main ones are AFP Provida, MetLife, 4Life Seguros , AFP Cuprum, BICE Vida, Penta Vida, Vida Security, AFP Capital, Moneda Asset Management and AFC Chile.
From AFP Provida they indicated that “we have made requests to the Court of New York in order to obtain the best possible recovery of the funds owed by Latam. This has implied not only the hiring of lawyers and advisers both in Chile and the US, but also carrying out all the necessary procedures in order to fulfill our fiduciary role and protect the savings of our affiliates.»
Latam Airlines Group flatly denied that there were any irregularities. The airline’s attorneys asserted that the balance sheets of its subsidiaries were disclosed correctly and within the Chapter 11 deadlines.
Update 6/29/21: http://aviacionline.com/2021/06/latam-rejects-accusations-from-chilean-creditors-regarding-the-movement-of-funds-to-the-cayman-islands/
