/raid1/www/Hosts/bankrupt/TCRLA_Public/200922.mbx
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
Tuesday, September 22, 2020, Vol. 21, No. 190
Headlines
A R G E N T I N A
ARGENTINA: Ailing Economy Battered by Coronavirus
C O L O M B I A
AVIANCA AIRLINES: To Assure Court of Guarantee on $370MM Gov't Loan
AVIANCA HOLDINGS: Appeals Order That Blocked $370MM Emergency Loan
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Bank Injection Makes Personal Loans Cheaper
DOMINICAN REPUBLIC: Foreign Investment Falls 22% to US$1.2BB
DOMINICAN REPUBLIC: Used Car Importers Cozy Up to Tax Agency
J A M A I C A
JAMAICA: Measures Implemented to Alleviate Chicken Shortage
M E X I C O
ALPHA HOLDING: S&P Lowers Rating to 'B' on Existing Senior Notes
P U E R T O R I C O
ALLIED FINANCIAL: Updates Disclosure Statement After 4 Years
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A R G E N T I N A
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ARGENTINA: Ailing Economy Battered by Coronavirus
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Globalinsolvency.com reports that despite one of the world's
longest and strictest lockdowns, the death toll in Argentina keeps
rising. The increase in daily deaths from Covid-19 is the sixth
highest in the world.
More than 10,000 people have died so far, according to
Globalinsolvency.com. The report, citing The Financial Times,
relates that Argentina's rate of about 234 deaths per million is
still lower than its big neighbours - in Brazil and Chile, that
rate exceeds 600 deaths per million - but the economic consequences
of its lockdown have been especially dire.
Andres Borenstein, an economist at Econviews, a consultancy in
Buenos Aires, said Argentina's economy had been hit twice as hard
as its neighbours, the report relays. The gross domestic products
of Brazil and Chile are forecast to decline between 5 per cent and
6 per cent this year, while Argentina's is expected to shrink as
much as 12 per cent, according to a central bank survey, the report
discloses.
About Argentina
Argentina is a country located mostly in the southern half of South
America. It's capital is Buenos Aires. Alberto Angel Fernandez is
the current president 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 credit rating for Argentina stands at CCC+ with
stable outlook, which was a rating upgrade issued on Sept. 8, 2020.
Fitch's credit rating for Argentina was last reported at CCC with
n/a outlook, a rating upgrade from CC on Sept. 11, 2020. DBRS'
credit rating for Argentina is CCC with n/a outlook, a rating
upgrade on Sept. 11, 2020. Moody's credit rating for Argentina was
last set at Ca, a rating downgrade from Caa2 on April 4, 2020, with
a negative outlook.
As reported by The Troubled Company Reporter - Latin American, DBRS
noted that the recent upgrade in Argentina's ratings (September
2020) follows the closing of two debt restructuring agreements
between the Argentine government and private creditors. The first
restructuring involved $65 billion in foreign-law bonds. The deal
achieved the requisite participation necessary to trigger the
collective action clauses and finalize the restructuring on 99% on
the aggregate principal outstanding of eligible bonds. DBRS added
that the debt restructurings conclude a prolonged default and
provide the government with substantial principal and interest
payment relief over the next four years.
DBRS further relayed that Argentina is also seeking a new agreement
with the International Monetary Fund (IMF) to replace the canceled
2018 Stand-by Agreement. Obligations to the IMF amount to $44
billion, with major repayments coming due in 2022 and 2023.
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C O L O M B I A
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AVIANCA AIRLINES: To Assure Court of Guarantee on $370MM Gov't Loan
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Oscar Medina and Ezra Fieser at Bloomberg News report that a
Colombian court temporarily blocked a $370 million government loan
to Avianca Holdings SA after a citizen expressed concern about a
lack of guarantees.
The Cundinamarca Administrative Tribunal granted an injunction to
suspend disbursement after a motion filed by a citizen against the
Finance Ministry, the presidency and the airline said the loan,
part of its debtor-in-possession financing, may become a "threat"
to collective rights and public worth, according to a copy of the
ruling sent by court, according to Bloomberg News.
Bloomberg News notes that the action filed by Jonatan Ruiz demanded
the bankrupt airline provide "real, material and above all
valuable" guarantees to back the loan, which has been blasted by
local competitors and lawmakers who called it out-of-line compared
with spending on social services and amounts offered to other
airlines. The Finance Ministry and the other defendants have 10
days to respond to the motion.
Avianca said in a filing that in the coming days, it will provide
information to the court that "will demonstrate that participation
by the Republic of Colombia in the company's debtor-in-possession
financing is a beneficial transaction for the country," Bloomberg
News relays.
The credit was structured with "substantial collateral support" and
"attractive economic returns" for the government and other senior
investors, which are "ahead of certain other key stakeholders and
third-party lenders in a $700 million subordinated loan," Avianca
said, Bloomberg News says.
The carrier expects to file the motion to U.S. bankruptcy court
soon.
Avianca joins Latam Airlines Group SA and Grupo Aeromexico SAB in
filing for bankruptcy protection amid a decline in travel due to
the coronavirus pandemic, the report relays.
Avianca on Sept. 8 placed $1.3 billion of loans, paying a hefty
spread of more than 10 percentage points over the London interbank
offered rate and a discounted price of 98 cents on the dollar. The
loans, part of a $2 billion bankruptcy plan, will need court
approval, the report recalls.
About Avianca
Avianca -- https://aviancaholdings.com/ -- is the commercial brand
for the collection of passenger airlines and cargo airlines under
the umbrella company Avianca Holdings S.A. Avianca has been flying
uninterrupted for 100 years. With a fleet of 158 aircraft, Avianca
serves 76 destinations in 27 countries within the Americas and
Europe.
Avianca Holdings S.A. and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. N.Y. Lead Case No.
20-11133) on May 10, 2020. At the time of the filing, Debtors
disclosed $7,273,900,000 in assets and $7,268,700,000 in
liabilities.
Judge Martin Glenn oversees the cases.
The Debtors tapped Milbank LLP as general bankruptcy counsel;
Urdaneta, Velez, Pearl & Abdallah Abogados and Gomez-Pinzon
Abogados S.A.S. as restructuring counsel; Smith Gambrell and
Russell, LLP as aviation counsel; Seabury Securities LLC as
financial restructuring advisor and investment banker; FTI
Consulting, Inc. as financial restructuring advisor; and Kurtzman
Carson Consultants LLC as claims and noticing agent.
The U.S. Trustee for Region 2 appointed a committee of unsecured
creditors in Debtors' bankruptcy cases on May 22, 2020.
AVIANCA HOLDINGS: Appeals Order That Blocked $370MM Emergency Loan
------------------------------------------------------------------
Marcelo Rochabrun at Reuters reports that Avianca Holdings said it
had appealed a court order that banned Colombia's government from
providing the troubled airline with a $370 million loan to finance
part of its bankruptcy restructuring.
The airline, which filed for bankruptcy in May due to the
coronavirus pandemic's effect on travel, said that without the
loan, keeping the company afloat would become "untenable,"according
to Reuters.
The loan is part of a $2 billion financing package that is key to
the carrier exiting bankruptcy protection, the report notes. The
Colombian government's slice of the package had been questioned in
a Colombian court under the argument that Avianca's guarantees on
the loan were insufficient, the report relays.
Avianca rival, LATAM Airlines Group also faced a setback in its own
bankruptcy process when a U.S. judge turned down a $2.4 billion
financing package because it considered it to be too advantageous
to the carrier's major shareholders, the report adds.
About Avianca
Avianca -- https://aviancaholdings.com/ -- is the commercial brand
for the collection of passenger airlines and cargo airlines under
the umbrella company Avianca Holdings S.A. Avianca has been flying
uninterrupted for 100 years. With a fleet of 158 aircraft, Avianca
serves 76 destinations in 27 countries within the Americas and
Europe.
Avianca Holdings S.A. and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
20-11133) on May 10, 2020. At the time of the filing, the Debtors
disclosed $7,273,900,000 in assets and $7,268,700,000 in
liabilities.
Judge Martin Glenn oversees the cases.
The Debtors tapped Milbank LLP as general bankruptcy counsel;
Urdaneta, Velez, Pearl & Abdallah Abogados and Gomez-Pinzon
Abogados S.A.S. as restructuring counsel; Smith Gambrell and
Russell, LLP as aviation counsel; Seabury Securities LLC as
financial restructuring advisor and investment banker; FTI
Consulting, Inc., as financial restructuring advisor; and Kurtzman
Carson Consultants LLC as claims and noticing agent.
The U.S. Trustee for Region 2 appointed a committee of unsecured
creditors in Debtor's bankruptcy cases on May 22, 2020.
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D O M I N I C A N R E P U B L I C
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DOMINICAN REPUBLIC: Bank Injection Makes Personal Loans Cheaper
---------------------------------------------------------------
Dominican Today reports that the cost of bank financing, especially
in the area of consumer or personal loans, one of the credit
activities hardest hit by the pandemic, has dropped after the
injection of liquidity that the Central Bank has made to try to
revive the economy in the Dominican Republic.
Interest rates for personal loans averaged 13.26% per year until
September 10, a level that contrasts with the 18.7% that banks
charged for this financing last January, according to Dominican
Today.
That has been the deepest interest reduction that has been recorded
since the Central Bank applied the emergency monetary program, the
report notes.
Meanwhile, interest on loans for the commercial sector fell,
although the decline was not so pronounced. From 11.28% in January
this year, the rate fell to 9.07% as of September 10, according to
data from the Central Bank, the report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district.
The Troubled Company Reporter-Latin America reported in April 2019
that the Dominican Today related that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic stands at
BB- with negative outlook (April 2020). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (July
2017). Fitch's credit rating for Dominican Republic was last
reported at BB- with negative outlook (May 8, 2020).
DOMINICAN REPUBLIC: Foreign Investment Falls 22% to US$1.2BB
------------------------------------------------------------
Dominican Today reports that direct foreign investment stood at
around US$1.2 billion at the end of the first half, or a decrease
of 22% with respect to last year's result, according to the data
published by the Central Bank.
As a net balance, the flow of investments fell US$342.8 million
compared to the US$1.5 billion registered in the same period last
year, according to Dominican Today.
The Central Bank says the drop was caused by "significant
transactions for loans with the parent company" in the
communications and mining sectors, the report notes. But the
pandemic also hit the level of profits of some companies, as
revealed in its semi-annual report, Dominican Today adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district.
The Troubled Company Reporter-Latin America reported in April 2019
that the Dominican Today related that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic stands at
BB- with negative outlook (April 2020). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (July
2017). Fitch's credit rating for Dominican Republic was last
reported at BB- with negative outlook (May 8, 2020).
DOMINICAN REPUBLIC: Used Car Importers Cozy Up to Tax Agency
------------------------------------------------------------
Dominican Today reports that the Used Vehicles Importers
Association (ASOCIVU) praised the opening of the new authorities at
Internal Taxes (DGII) and stressed that some issues concern their
sector such as the special license plate for dealers, the duration
of the procedures, the transfer fees and unfair competition from
the informal sector.
During a meeting with DGII director Luis Valdez, the business
leaders requested coordination with the Traffic Safety and Land
Transport Directorate (DIGESETT), "to clarify situations that arise
with members of that association and seek a joint
solution,"according to Dominican Today.
"We feel euphoric in this meeting with you here, since the last
meeting more than six years ago; the past director who never
allowed us to meet him. We greatly appreciate the willingness and
openness, that pleases us greatly,"said Ramón Burgos, executive
director of ASOCIVU, the report relays.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district.
The Troubled Company Reporter-Latin America reported in April 2019
that the Dominican Today related that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic stands at
BB- with negative outlook (April 2020). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (July
2017). Fitch's credit rating for Dominican Republic was last
reported at BB- with negative outlook (May 8, 2020).
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J A M A I C A
=============
JAMAICA: Measures Implemented to Alleviate Chicken Shortage
-----------------------------------------------------------
RJR News reports that poultry producers, Jamaica Broilers Group,
and Caribbean Broilers have met with a technical team from the
Agriculture Ministry to address concerns about a shortage of baby
chicks and chicken meat.
The poultry producers indicated that despite the Jamaican economy
not being at full capacity, they have seen a significant uptake in
the demand for baby chicks and chicken meat over the last two
months, according to RJR News.
Agriculture Minister Floyd Green gave the assurance that measures
are in place and continue to be implemented to remedy the supply
concerns, the report notes.
The assurance was corroborated in the meeting by the poultry
producers who have vastly increased their orders of eggs and
recently put a new hatchery into operation to meet the high demand
for baby chicks, the report relays.
Jamaica Broilers and Caribbean Broilers have increased their
production of baby chicks by an average 15%, the report relays.
The impact of this increased production should be reflected in the
market by early to mid-October, the report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea. Jamaica
is an upper-middle income country with an economy heavily dependent
on tourism. Other major sectors of the Jamaican economy include
agriculture, mining, manufacturing, petroleum refining, financial
and insurance services.
Standard & Poor's credit rating for Jamaica stands at B+ with
negative outlook (April 2020). Moody's credit rating for Jamaica
was last set at B2 with stable outlook (December 2019). Fitch's
credit rating for Jamaica was last reported at B+ with stable
outlook (April 2020).
As reported in the Troubled Company Reporter-Latin America, Fitch's
revision of Jamaica's outlook in April 2020 to Stable from Positive
reflects the shock to Jamaica from the coronavirus pandemic, which
is expected to lead to a sharp contraction in its
main sources of foreign currency revenues: tourism, remittances and
alumina exports.
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M E X I C O
===========
ALPHA HOLDING: S&P Lowers Rating to 'B' on Existing Senior Notes
----------------------------------------------------------------
S&P Global Ratings lowered its issue-level ratings on Alpha Holding
S.A. de C.V.'s (Alpha) existing senior notes to 'B' from 'B+'. All
of its operating subsidiaries guarantee their international market
debt; therefore, S&P rated the outstanding issuances at the same
level as Alpha's GCP, which it also revised to 'b' from 'b+'.
Additionally, S&P affirmed the long-term global scale issuer credit
rating on Alpha at 'B-' with a stable outlook.
Alpha's capitalization levels took a hit in the second quarter of
2020 due to a substantial write-off of about MXN1.3 billion in
their payroll portfolio in Mexico. As of June 2020, this amount
represented about 13% of Alpha's total loan portfolio and about
0.9x of its total adjusted capital. The written-off credits were
consumer loans granted in Mexico more than 180 days past due. These
loans were registered as ORP on Alpha's balance sheet, and were
classified different from nonperforming loans (NPLs) due to the
expected recoverability rate. Alpha inherited almost 60% of these
past due loans from its acquisitions of payroll companies in 2016.
The management decided to change its approach to this financial
asset and charged-off the entire amount of its value, assuming the
hit to its capital base. S&P said, "This factor has prompted us to
reduce our projected RAC ratio to 3.3% from our previous forecast
of 6.0% for the next 12-24 months. Consequently, we're lowering our
capital and earnings assessment to weak from moderate, leading us
to downwardly revise the GCP to 'b' from 'b+'."
S&P expects Alpha to focus on collecting and recovering these
loans. If it succeeds, according to its projections, this would be
reflected in higher revenue generation, and finally, in an
improvement in S&P's long-term risk-adjusted capital ratio.
=====================
P U E R T O R I C O
=====================
ALLIED FINANCIAL: Updates Disclosure Statement After 4 Years
------------------------------------------------------------
Allied Financial, Inc., filed an Amended Disclosure Statement
explaining its Chapter 11 Plan in August 2020. Four years have
elapsed since the original Disclosure Statement and Plan of
Reorganization were filed. The Amended Disclosure Statement
substitutes the original document filed on May 12, 2016.
In the four years since the original Reorganization Plan was filed,
the Debtor continued marketing and selling its properties providing
full payment to creditors such as Banco Popular de Puerto Rico and
Condado 2, LLC. The Debtor continued collecting and/or prosecuting
its accounts receivable. Moreover, extensive discovery and
litigation took effect during this period of time, including the
Debtor's legal right to "derecho de retracto" under PR Civil Code,
Art. 1525 and the pertinent discovery toward that end. The Debtor
has also objected the Proof of Claims filed by WM Capital Partners
53 LLC.
All other possible objections to claims were resolved and some of
the secured creditor's whose collateral was sold by the Debtor,
received payments.
DESIGNATION OF CLASSES OF CLAIMS AND INTERESTS
The Amended Plan has been drafted designating 12 classes in
accordance with the provisions of 11 U.S.C. Sec. 1122 and Sec.
1123. All creditors and other parties in interest are urged to read
and consider the Plan in full inasmuch as it represents a proposed
legally binding agreement with the Debtor and any other party
involved. The classes of creditors are as follows:
CLASS 1 ADMINISTRATIVE CLAIMS. This class shall consist of all
allowed administrative expense priority claims, as provided under
Section 503 (a)(2) of the Code, including, but not limited to,
court costs accrued since the petition date, fees to the United
States Trustee, fees and expenses of Debtor's counsel, accountant
and any other professionals retained by the Debtor, as may be
allowed by the Bankruptcy Court upon application thereof, and after
notice and a hearing, in accordance with the Bankruptcy Code and
Rules, as well as any unpaid taxes or fees accrued since petition
date. Debt under this class is estimated to be approximately
$25,000.
CLASS 2 PRIORITY ADMINISTRATIVE CLAIM HELD BY ALLIED MANAGEMENT
GROUP, INC. This class shall consist of all allowed administrative
expenses priority claims, as provided under Section 503 (b)(1) of
the Code, on account of the post-petition financing provided by
Allied Management Group, Inc., duly approved by the Bankruptcy
Court. As of this date the amount of secured post-petition
financing is $180,000.00.
CLASS 3 CRIM. The Debtor listed CRIM's claims on account of real
property tax with a lien on fourteen (14) real estate properties
belonging to the Debtor. CRIM filed Proof of Claim No. 6 in the
total secured amount of $1,187.28, regarding three (3) properties.
The first two properties are located in Caguas Puerto Rico and have
the following CRIM identification numbers: a) Pin No.
199-048-957-21-000 and b) Pin No. 199-048-957-20-000. The third
property is located in Morovis Puerto Rico and its CRIM
identification numbers is Pin No. 109-000-002-74-000. Additional
properties are still pending tax assessment. (See Exhibit 2).
CLASS 4 SECURED CREDITOR: ORIENTAL BANK, NOW WM CAPITAL 76. The
Debtor listed Oriental Bank, as a secured creditor holding a lien
over thirteen (13) real estate properties belonging to the Debtor
or a Debtor's client. Oriental Bank filed Proof of Claim No. 1 in
the total amount of $629,564.11 including interest on March 4,
2016. With the acquiescence of Oriental, the Debtor sold properties
that serve as collateral and paid Oriental Bank the net proceeds.
As of July 22, 2020, the amount owed was $210,693.96. WM Capital 76
is the current owner of this credit. WM Capital 76 LLC recently
filed Amended Proof of Claim No. 1 in the total amount of
$277,879.903. The Debtor is still marketing three (3) properties
that serve as collateral to this debt. Exhibit 5 to the Disclosure
Statement (Oriental's collateral).
CLASS 5 SECURED CREDITOR: WM CAPITAL PARTNERS 53, LLC. The Debtor
listed WM CAPITAL PARTNERS 53, LLC as a secured creditor holding
various mortgages notes over four (4) real estate properties
belonging to the Debtor or Debtor's clients. WM Capital Partners
53, LLC filed Proof of Claim No. 2, in the total secured amount of
$1,950,309.95. See Exhibit 6.
CLASS 6 SECURED CREDITOR: WM CAPITAL PARTNERS 53, LLC OR ALLIED
MANAGEMENT GROUP INC. WM CAPITAL PARTNERS 53, LLC, also holds two
mortgages notes ($800,000 and $400,000) for the total amount of
$1,200,000, secured over Lot 2748 at Bo. Bajuras, Isabela, PR. The
Supreme Court of Puerto Rico ratified the decision of the Court of
Appeals, concluding that these two notes were paid and shall be
returned to Allied Management Group, Inc., by Scotiabank. The Court
determined that if Scotiabank is unable to return the two notes,
because they have transferred them to Third Parties, Scotiabank
shall pay the value of the Notes. Therefore, these two mortgage
notes do not form part of Debtor's' collateral to WM Capital.
The Debtor has no ownership or claim against these two mortgage
notes, nor can offer any secured status to WM CAPITAL PARTNERS 53,
LLC in lieu of these two notes. Therefore, the amount of at least
$1,200,000 guaranteed by these two notes will be an unsecured
claim, under Class 11.
CLASS 7 RG PREMIER BANK (RG)/or CURRENT HOLDER. The Debtor listed
RG Premier Bank with an "unliquidated" secured claim in the total
amount of $77,763.00 holding a lien over property Lot No. 17,611
located at Ext. Golden Gate, Bloque J #193 Urb. San Patricio,
Guaynabo, Puerto Rico. The Debtor concluded foreclosure
proceedings over the real estate which guaranteed Debtor's loan to
RG, but there is an apparent track problem at the Property Registry
which has impeded the acquisition of title over the property. RG
PREMIER BANK/ or CURRENT HOLDER did not file a Proof of Claim. The
Bar Date was May 23rd, 2016.
CLASS 8 PRIORITY UNSECURED CLAIMS. The Debtor listed unsecured
priority claims, in the total amount of $46,298. These priority
claims include CRIM, Departamento de Hacienda and Municipality of
San Juan. As of this day, after reconciliation of the debt, the
correct amount owed is $12,066.
CLASS 9 GENERAL UNSECURED CLAIMS FROM GOVERNMENTAL UNITS AND TAXING
AUTHORITIES. This class includes the undisputed unsecured debt to
Departamento de Hacienda, CRIM, Municipality of San Juan and State
Insurance Fund in the amount of $33,338.
CLASS 10 GENERAL UNSECURED CREDITOR. This class will include all
general unsecured creditors whose claims are not contingent
disputed and /or unliquidated. This class amounts to $1,970,202.
CLASS 11 CONTINGENT, DISPUTED AND/OR UNLIQUIDATED GENERAL UNSECURED
CLAIMS. This class shall consist of the general unsecured creditors
consisting mainly of the contingent, disputed and/or unliquidated
claims of all kind of claimants, including but not limited to any
deficiency claims that may arise from secured creditors.
CLASS 12 EQUITY SECURITY AND/OR OTHER INTEREST HOLDERS. This class
includes all equity and interest holders who are the owners of the
stock of the Debtor, i.e. Rafael Portela and Jose R. Armstrong.
TREATMENT TO CLASSES
CLASS 1 ADMINISTRATIVE CLAIMS. This class shall consist of all
allowed administrative expense priority claims, as provided under
Section 503 (a)(2) of the Code, including, but not limited to,
court costs accrued since the petition date, fees to the United
States Trustee, fees and expenses of Debtor's counsel, accountant
and any other professionals retained by the Debtor, as may be
allowed by the Bankruptcy Court upon application thereof, and after
notice and a hearing, in accordance with the Bankruptcy Code and
Rules, as well as any unpaid taxes or fees accrued since petition
date. Debt under this class for all debtors is estimated to be
approximately $25,000. Any amount owed under this Class shall be
paid on Effective Date or as agreed with the creditor. This Class
is not impaired.
CLASS 2 PRIORITY ADMINISTRATIVE CLAIM HELD BY ALLIED MANAGEMENT
GROUP, INC. This class shall consist of all allowed administrative
expense priority claims, as provided under Section 503 (b)(1) of
the Code, on account of the post-petition financing provided by
Allied Management Group, Inc., duly approved by the Bankruptcy
Court. As of this date the amount of secured post-petition
financing is $180,000.00. This creditor will receive monthly
interest payments in the amount of 4% of the outstanding debt,
and/or will be paid in kind, by surrendering of the collateral in
full payment of debt, within 36 months from Effective Date. This
class is impaired.
CLASS 3 CRIM. The Debtor listed CRIM's claims on account of real
property tax with a lien on fourteen (14) real estate properties
belonging to the Debtor. CRIM filed Proof of Claim No. 6 in the
total secured amount of $1,187.28, regarding three (3) properties.
The first two properties are located in Caguas Puerto Rico and have
the following CRIM identification numbers: (a) Pin No.
199-048-957-21-000 and (b) Pin No. 199-048-957-20-000. The third
property is located in Morovis Puerto Rico and its CRIM
identification numbers is Pin No. 109-000-002-74-000. Additional
properties are still pending tax assessment. (Exhibit 2). This
Class will be paid the allowed amount, with interest at the
prevailing prime rate as of confirmation date or upon sale of each
property in monthly installments within the 36 from Effective
Date.
This class is impaired.
CLASS 4 SECURED CREDITOR: ORIENTAL BANK, NOW WM CAPITAL 76 LLC. The
Debtor listed Oriental Bank, as a secured creditor holding a lien
over thirteen (13) real estate properties belonging to the Debtor
or a Debtor's client. Oriental Bank filed Proof of Claim No. 1 in
the total amount of $629,564.11 including interest on March 4th,
2016. With the acquiescence of Oriental, the Debtor sold properties
that serve as collateral and paid Oriental Bank the net proceeds.
As of July 22, 2020, the amount owed was $210,693.96. WM Capital 76
is the current owner of this credit. WM Capital 76 LLC recently
filed Amended Proof of Claim No. 1 in the total amount of
$277,879.906. The Debtor is still marketing three (3) properties
that serve as collateral to this debt. The Debtor expects to sell
the properties and be able to pay off this creditor in full within
a maximum period of 36 months from Effective Date. Any deficiency
on the sale value versus the debt owed, will be paid as an
unsecured claim under Class 11. Exhibit 5 (Oriental's
collateral). This class is impaired.
CLASS 5 SECURED CREDITOR: WM CAPITAL PARTNERS 53, LLC. The Debtor
listed WM CAPITAL PARTNERS 53, LLC as a secured creditor holding
various mortgages notes over four (4) real estate properties
belonging to the Debtor or Debtor's clients. WM Capital Partners
53, LLC filed Proof of Claim No. 2, in the total secured amount of
$1,950,309.95. Exhibit 6. The Debtor proposes one of the following
alternatives of payments to WM Capital:
(a) will continue marketing and selling of the properties with an
agreed market value as per the latest appraisals, for thirty-six
(36) months from the Effective Date, surrendering all net proceeds
to secured creditor. The Debtor will assume all expenses related to
marketing of the properties, including realtor's fee.
(b) any unsecured portion will be paid under Class 11.
(c) In the alternative the Debtor has received an offer from
ALLIED MANAGEMENT GROUP, Inc., to purchase any and all of WM
CAPITAL's claims for a reasonable amount (to be negotiated). This
class is impaired.
CLASS 6 SECURED CREDITOR: WM CAPITAL PARTNERS 53, LLC OR ALLIED
MANAGEMENT GROUP INC. WM CAPITAL PARTNERS 53, LLC, also holds two
mortgages notes ($800,000 and $400,000) for the total amount of
$1,200,000, secured over Lot 2748 at Bo. Bajuras, Isabela, PR. The
Supreme Court of Puerto Rico ratified the decision of the Court of
Appeals, concluding that these two notes were paid and shall be
returned to Allied Management Group Inc., by Scotiabank. The Court
determined that if Scotiabank is unable to return the two notes,
because they have transferred them to Third Parties, Scotiabank
shall pay the value of the Notes. Therefore, these two mortgage
notes do not form part of Debtor's collateral to WM Capital. The
Debtor has no ownership or claim against these two mortgage notes,
nor can offer any secured status to WM CAPITAL PARTNERS in lieu of
these two notes. Therefore, the amount of at least $1,200,000
guaranteed by these two notes will be an unsecured claim, under
Class 11. This Class is impaired.
CLASS 7 RG PREMIER BANK. The Debtor listed RG Premier Bank with an
"unliquidated" secured claim in the total amount of $77,763.00
holding a lien over property Lot No. 17,611 located at Ext. Golden
Gate, Bloque J #193 Urb. San Patricio, Guaynabo, Puerto Rico. The
Debtor concluded foreclosure proceedings over the real estate which
guaranteed Debtor's loan to RG, but there is an apparent track
problem at the Property Registry which has impeded the acquisition
of title over the property. RG was fully informed of this status.
RG PREMIER BANK/ or CURRENT HOLDER did not file a Proof of Claim.
The Bar Date was May 23rd, 2016. The Debtor does not provide any
payment to RG Premier. This class is not impaired.
CLASS 8 PRIORITY UNSECURED CLAIMS. The Debtor listed unsecured
priority claims, in the total amount of $46,298. These priority
claims include CRIM, Departamento de Hacienda and Municipality of
San Juan. As of this day, after reconciliation of the debt, the
correct amount owed is $12,066. The Debtor will pay this class in
full plus interest at the prevailing prime rate, in equal monthly
installments within 36 months from Effective Date. This class is
impaired.
CLASS 9 GENERAL UNSECURED CLAIMS FROM GOVERMENTAL UNITS AND TAXING.
AUTHORITIES. This class includes the undisputed unsecured debt to
Departamento de Hacienda, CRIM, Municipality of San Juan and State
Insurance Fund in the amount of $33,338. This Class will be paid
three 3% of its claim, in equal monthly installments, within 36
months from Effective. This Class is impaired.
CLASS 10 GENERAL UNSECURED CREDITOR. This class will include all
general unsecured creditors whose claims are not contingent
disputed and /or unliquidated. This class amounts to $1,970,202.
From this amount the amount of $1,919,540 is owed to Allied
Management Group Inc. Allied Management Group Inc., has agreed to
make a capital contribution, to the Debtor, solely under this
Amended Plan, no payment will be made to Allied Management Group,
Inc. This Class will be paid three 3% of its claim, in equal
monthly installments, within 36 months from the Effective Date.
This class is impaired.
CLASS 11 CONTINGENT, DISPUTED AND/OR UNLIQUIDATED GENERAL UNSECURED
CLAIMS. This class shall consist of the general unsecured creditors
consisting mainly of the contingent, disputed and or unliquidated
claims of all kind of claimants, including but not limited to any
deficiency claims that may arise from secured creditors.8 The debt
under this Class is estimated in the amount of $1,860,421. The
final allowed amount of claims under this class will be paid three
3% of its allowed amount, to be paid in monthly payments for 36
months from the Effective Date. This class is impaired.
CLASS 12 EQUITY SECURITY AND/OR OTHER INTEREST HOLDERS. This class
includes all equity and interest holders who are the owners of the
stock of the Debtor, i.e. Rafael Portela and Jose R. Armstrong.
This class will not receive any dividend unless all senior classes
are paid in full. This class will not vote for or against the
Amended Plan.
A full-text copy of the Amended Disclosure Statement dated August
10, 2020, is available at https://tinyurl.com/yy6l3zxv from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Carmen D. Conde Torres
USDC No.: 207312
C. CONDE & ASSOC.
San Jose Street #254, 5th Floor
San Juan, P.R. 00901-1253
Tel: (787) 729-2900
Fax: (787) 729-2203
E-mail: condecarmen@condelaw.com
About Allied Financial
Allied Financial, Inc. filed a Chapter 11 bankruptcy petition
(Bankr. D. P.R. Case No. 16-00180) on Jan. 15, 2016. At the time
of the filing, Debtor disclosed total assets of $10.3 million and
total debt of $9.14 million. Judge Mildred Caban Flores oversees
the case. C. Conde & Assoc. is the Debtor's legal counsel.
*********
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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Chapman, Editors.
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