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T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, January 1, 2020, Vol. 21, No. 1
Headlines
A R G E N T I N A
ARGENTINA: Travel Abroad Becomes More Expensive for Argentines
M E X I C O
MEXICO: Economy Ends 2019 Amid Stagnation and Uncertainty
ORCHIDS PAPER: Debtor Further Fine-Tunes Chapter 11 Plan
P U E R T O R I C O
BETTERECYCLING CORP: Lenders Renew Motion for Trustee
SKYTEC INC: LogiSYS Says Liquidation Analysis Insufficient
T R I N I D A D A N D T O B A G O
TRINIDAD & TOBAGO: Retrenchments Jump 27%
V E N E Z U E L A
CONSIS INTERNATIONAL: Unsec. Creditors to Recover 15% Under Plan
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A R G E N T I N A
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ARGENTINA: Travel Abroad Becomes More Expensive for Argentines
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EFE News reports that Middle-class and wealthy Argentines
accustomed to vacationing outside their country will see a
substantial increase in the cost of foreign travel under a law
enacted by the new center-left government.
The measure imposes a 30 percent levy on 1) purchases in foreign
currency; 2) tickets for international flights; and 3)
foreign-exchange transactions, according to EFE News.
Argentina is a country located mostly in the southern half of
South America. It's capital is Buenos Aires. Alberto Angel
Fernandez is the President-elect of Argentina after winning the
October 2019 general election. He succeeded Mauricio Macri in the
position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal
year 2019 according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and -- in the recent decades -- increasing poverty.
Standard & Poor's foreign and local currency sovereign credit
ratings for Argentina stands at CCC- with negative outlook. S&P
said, "The negative outlook reflects the prominent downside risks
to payment of debt on time and in full per our criteria over the
coming months amid very complex political, economic, and financial
market dynamics." Moody's credit rating for Argentina was last
set at Caa2 from B2 with under review outlook. Fitch's credit
rating for Argentina was last reported at CC with n/a outlook.
DBRS's credit rating for Argentina is CC with under review
outlook.
S&P, Moody's and DBRS ratings were issued on Aug. 30, 2019; Fitch
rating on Sept. 3, 2019.
Back in July 2014, Argentina defaulted on some of its debt, after
expiration of a 30-day grace period on a US$539 million interest
payment. The country hasn't been able to access international
credit markets since its US$95 billion default 13 years ago. On
March 30, 2016, Argentina's Congress passed a bill that will allow
the government to repay holders of debt that the South
American country defaulted on in 2001, including a group of
litigating hedge funds that won judgments in a New York court.
The bill passed by a vote of 54-16
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M E X I C O
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MEXICO: Economy Ends 2019 Amid Stagnation and Uncertainty
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Mexico's economy is ending 2019 on the verge of a recession, with
stagnation, uncertainty on both the domestic and international
fronts, and scarce public and private investment, economists told
EFE, adding that a rebound could come next year.
"The deceleration in (the economy of) the country is fundamentally
due to a drop in investment, both public, due to the limited fiscal
room available, and, especially, private. This drop in investment
is due to the uncertainty surrounding the direction that public
policy could take," BBVA chief economist Carlos Serrano said,
according to EFE News.
ORCHIDS PAPER: Debtor Further Fine-Tunes Chapter 11 Plan
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OPP Liquidating Company, Inc., formerly known as Orchids Paper
Products Company, et al., filed a Third Amended Combined Plan and
Disclosure Statement that provides for minor changes to the prior
iteration of the Plan and Disclosure Statement.
Under the Plan, holders of first lien claims totaling
$205,384,646,
and priority claims totaling $2,940,036 will recover 100%. Holders
of general unsecured claims totaling $37,058,310 will recover 1% to
2%.
At an auction in June, Cascades emerged as the winning bidder, with
a final bid of $207 million cash plus certain additional cash
payments as set forth in the Asset Purchase Agreement. On Sept.
13, 2019, the closing of the sale occurred.
A black-lined copy of the Third Amended Combined Disclosure
Statement and Chapter 11 Plan of Liquidation dated Dec. 6, 2019, is
available at https://tinyurl.com/ugvxdgc from PacerMonitor.com at
no charge.
Counsel to the Debtors:
Christopher A. Ward
Shanti M. Katona
Brenna A. Dolphin
222 Delaware Avenue, Suite 1101
Wilmington, Delaware 19801
Telephone: (302) 252-0920
Facsimile: (302) 252-0921
E-mail: cward@polsinelli.com
skatona@polsinelli.com
bdolphin@polsinelli.com
- and -
Jerry L. Switzer, Jr.
150 North Riverside Plaza
Chicago, Illinois 60606
Telephone: (312) 873-3626
Facsimile: (312) 810-1810
E-mail: jswitzer@polsinelli.com
About Orchids Paper Company
Headquartered in Pryor, Oklahoma, Orchids Paper Products Company
-- http://www.orchidspaper.com/-- is a national supplier of
consumer tissue products primarily serving the at home private
label consumer market. The Company produces a full line of tissue
products, including paper towels, bathroom tissue and paper
napkins, to serve the value through ultra-premium quality market
segments from its operations in northeast Oklahoma, Barnwell, South
Carolina and Mexicali, Mexico. The Company provides these
products primarily to retail chains throughout the United States.
As of Feb. 28, 2019, the Debtors posted total assets $322,061,000
and total debt of $260,864,000.
Orchids Paper Products Company and two of its subsidiaries filed
for bankruptcy protection (Bankr. D. Del. Lead Case No. 19-10729)
on April 1, 2019. The petitions were signed by Richard S.
Infantino, interim chief strategy officer.
Hon. Mary F. Walrath oversees the cases.
The Debtors tapped Polsinelli PC as counsel; Deloitte Transactions
And Business Analytics LLP as chief strategy officer; Houlihan
Lokey Capital, Inc., as investment banker; and Prime Clerk LLC as
claims and notice agent.
Andrew Vara, acting U.S. trustee for Region 3, on April 15, 2019,
appointed five creditors to serve on the official committee of
unsecured creditors in the Chapter 11 cases. The Committee
retained Lowenstein Sandler LLP, as counsel; and CKR Law LLP as its
Delaware counsel.
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P U E R T O R I C O
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BETTERECYCLING CORP: Lenders Renew Motion for Trustee
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Lenders Firstbank Puerto Rico, Banco Santander de Puerto Rico, the
Economic Development Bank for Puerto Rico, and Banco Popular de
Puerto Rico filed a renewed motion for the appointment of a Chapter
11 trustee for debtors Betteroads Asphalt LLC and Betterecycling
Corporation.
The Lenders said they are forced to file this Motion to appoint a
chapter 11 trustee in order to stop the depletion of revenues and
assets of the Debtors, as well as to preserve, evaluate, and
prosecute avoidance actions to recover the transfers, ensure
transparency, avoid the clear and existing conflicts of interests
between the Debtors and their insiders, and to maximize recoveries
for creditors and the estates.
Beginning during September 2016, the Debtors' existing management
created and executed a fraudulent transfer scheme through which
they transferred the operation or ownership of substantially all of
the Debtors' assets and revenue streams to insider entities owned
or controlled by the Debtors' same management and principals during
the month of September 2016.
These transfers were done, in their majority, to:
(a) Puerto Rico Asphalt, LLC -- an entity owned by the Debtors'
principals and owners, Jorge L. Diaz, and Arturo Diaz, and
transferred with nominal, if any, consideration to another
principal of the Debtors, Jorge A. Diaz; and
(b) the Petroleum Emulsion Manufacturing Corporation, which is
owned and managed by Mr. Diaz.
The Lenders discovered these transfers through their own due
diligence and investigations and through the discovery done to date
as part of these Involuntary Proceedings. In this case, the
Debtors' actions merit and require the appointment of a trustee.
The Lenders argue that a trustee is necessary, as the Debtors'
current management is imbedded with clear conflicts of interest
that will prevent them from administering these cases for the
benefit of the estates or creditors. The substantial transfers
detailed below were done to insider entities controlled by the
Debtors' current management and immediate family. These conflicts
of interest have prevented, and will prevent, the Debtors from
carefully analyzing and prosecuting the avoidance of the transfers
and recovering the transfers made to insiders and others for the
benefit of the estates.
According to the Lenders, these avoidance actions are a substantial
asset of these estates, and the Debtors cannot be trusted to
adequately pursue these actions against entities owned by the
Debtors' own principals or immediate family. A trustee is needed
to evaluate and pursue the best avenues for creditors. These
considerations demonstrate the urgent need for the Court to appoint
a trustee to supervise the Debtors' affairs, recover avoidable
transfers, provide transparency, and to protect their creditors
from, among other things, the insider self-dealing.
A trustee will step into the shoes of the Debtors and will
immediately take control of the estates and the Debtors' affairs,
thereby putting in place an impartial fiduciary capable of
preserving the estates' assets and maximizing recovery for
creditors.
Attorneys for the Lenders:
Luis C. Marini-Biaggi
Carolina Velaz-Rivero
Valerie Blay-Soler
Ignacio Labarca-Morales
Jonathan Camacho-Villamil
M|P|M MARINI PIETRANTONI MUNIZ
250 Ponce De Leon Ave., Suite 900
San Juan, PR 00918
Tel: (787) 705-2171
E-mail: lmarini@mpmlawpr.com
cvelaz@mpmlawpr.com
vblay@mpmlawpr.com
ilabarca@mpmlawpr.com
jcamacho@mpmlawpr.com
A full-text copy of the Lenders' Renewed Motion is available at
https://tinyurl.com/wje48ho from PacerMonitor.com at no charge.
About Betteroads Asphalt and Betterecycling Corp
Betteroads Asphalt LLC produces warm mix asphalt. Its products are
used in airports, highways, neighborhoods, and environment
projects. Betterecycling Corporation produces gasoline, kerosene,
distillate fuel oils, residual fuel oils, and lubricants. Both
companies are based in San Juan, Puerto Rico.
On June 9, 2017, alleged creditors commenced involuntary bankruptcy
petitions, under chapter 11 of the United States Bankruptcy Code
(Bankr. D.P.R. Case No. 17-04156), against Betteroads Asphalt LLC,
under Case No. 17-04156-ESL and Betterecycling Corporation (Case
No. 17-04157-ESL).
On Nov. 30, 2018, the Court entered an "opinion and order"
including findings and concluding that, among other things, the
Petitioning Creditors have satisfied the three-prong requirement
for filing an involuntary petition.
On Oct. 10, 2019, after a five-day evidentiary hearing, the Court
entered an "opinion and order" finding, among other things, that
the involuntary petitions were not filed for an improper bankruptcy
purpose or with bad faith.
On Oct. 11, 2019, the Court entered the "order for relief".
SKYTEC INC: LogiSYS Says Liquidation Analysis Insufficient
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Logistic Systems, Inc., presents its objection to Skytec, Inc.'s
Amended Disclosure Statement.
LogiSYS points out that the Debtor's liquidation analysis is
insufficient.
The Debtor asserts in the Second Amended Disclosure Statement that
"Debtor's Plan offers an estimated 20% percent dividend to the
Holders of General Unsecured Claims, allegedly more than the amount
they would receive in a liquidation scenario." In support of this
conclusory statement, the Debtors refer creditors to the
Liquidation Analysis attached to the Disclosure Statement.
LogiSYS notes that in In re Acemla de Puerto Rico, Inc., 2019
Bankr. LEXIS 182 (Bankr. D.P.R. Jan. 2019), several creditors
raised objections to the debtor's disclosure statement and plan of
reorganization based upon the debtor's failure to discuss any
possibility or extent of avoidance actions, the debtor's improper
classification of creditors who could have been paid in full on the
effective date, and the debtor's intention for its equity security
holders to maintain their interest in the company even though the
unsecured creditors were not going to be paid in full, in express
violation of the absolute priority rule. Many of the deficiencies
raised by creditors in In re Acemla de Puerto Rico, are likewise
apparent here, according to LogiSYS.
LogiSYS further points out that:
* The Debtor did not include the analysis of the payments made
during the period subject to avoidance in the Second Amended
Disclosure Statement.
* The Disclosure Statement does not contain adequate information
concerning avoidance actions.
* The Disclosure Statement lacks adequate information about
feasibility.
* The Second Amended Disclosure Statement fails to provide
adequate information regarding the lease agreement for the property
where its offices are located, and the allegedly executory
contracts it rests upon to forecast the income from operations.
Counsel for LogiSYS:
Carlos A. Rodriguez Vidal
Solymar Castillo Morales
GOLDMAN ANTONETTI & CORDOVA, LLC
Post Office Box 70364
San Juan, PR 00936-8364
Telephone No.: (787) 759-4117
Facsimile No.: (787) 767-9177
E-mail: crodriguez-vidal@gaclaw.com
scastillo@gaclaw.com
About Skytec Inc.
Skytec, Inc., is a privately-held company based in Puerto Rico that
provides wireless telecommunication solutions. Skytec sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R.
Case No. 18-05288) on Sept. 12, 2018. In the petition signed by
Henry L. Barreda, president, the Debtor disclosed $2,119,734 in
assets and $5,848,090 in liabilities. Judge Enrique S. Lamoutte
Inclan oversees the case. The Debtor tapped Fuentes Law Offices,
LLC as its legal counsel.
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T R I N I D A D A N D T O B A G O
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TRINIDAD & TOBAGO: Retrenchments Jump 27%
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Trinidad Express reports that in its last Monetary Policy
Announcement for 2019, the Central Bank has cited a 27 per cent
increase in the number of people retrenched in T&T for the first
ten months of the year, along with headline inflation slowing to
0.3 per cent and T&T's net official reserves declining to below
US$7 billion.
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V E N E Z U E L A
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CONSIS INTERNATIONAL: Unsec. Creditors to Recover 15% Under Plan
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Consis International LLC has a Chapter 11 plan that proposes a
recovery of 15 cents on the dollar for general unsecured
creditors.
General unsecured claims in Class 3 are comprised of Claims #6, #7
[the Bolivians] (in the amount of $5,780,936.08 for Plan purposes)
and #10, #11 [Asesuisa] (in the amount of $2,821,362.51 for Plan
purposes). This class, whose claims exceed $80,001 each, shall
receive payments totaling $1,300,000 which collectively represent a
distribution of 15% of the outstanding claims of the creditors in
Class 3. Such payments will be made to La Boliviana and Asesuisa
in installments on a monthly basis over a 48-month term starting on
the Effective Date of the Plan.
Allowed general unsecured claims of insiders in Class 4 --
comprised of German Marcano, Oscar Carrera, Leonardo Lucena and
Juan Medina, collectively owed $387,542 -- will receive no
distribution from the Plan.
Holders of unsecured claims classified as convenience claims (less
than $80,001) in Class 5 will receive their pro rata share of
$24,695.60 within 60 days of the Effective Date of the Plan. This
class will receive the same percentage distribution (15%) as the
other non-insider general unsecured claimants in Class #3.
Members of the Debtor in Class 6 will provide new value to the
reorganized Debtor as necessary to fund the Plan. Specifically,
the new value provided will be the sum to fund the Convenience
Class Claim, $24,695.60.
A full-text copy of the Third Amended Disclosure Statement dated
Dec. 4, 2019, is available at https://tinyurl.com/yx5r96oe from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Aleida Martinez Molina
Weiss Serota Helfman Cole & Biennan, PL
2525 Ponce de Leon Boulevard, Suite 700
Coral Gab les, Florida 33134
Telephone: (305) 854-0800
Facsimile: (305) 854-2323
E-mail: amartinez@wsh-law.com
About Consis International
Consis International LLC -- https://www.consisint.com/ -- provides
computer systems design and related services. It was founded in
August 1987 in Caracas, Venezuela.
Consis International sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-22233) on Oct. 2,
2018. In the petition signed by Oscar Carrera, manager, the Debtor
was estimated to have assets of less than $1 million and
liabilities of $1 million to $10 million. Judge John K. Olson
oversees the case. Weiss Serota Helfman Cole & Bierman, P.L., is
the Debtor's legal counsel.
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S U B S C R I P T I O N I N F O R M A T I O N
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