/raid1/www/Hosts/bankrupt/TCRLA_Public/220309.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
Wednesday, March 9, 2022, Vol. 23, No. 43
Headlines
A R G E N T I N A
ARGENTINA: Fernandez Slams Macri Anew on "Unpayable Debt" With IMF
ARGENTINA: IDB Approves $37MM Loan for Public Investment Efficiency
B R A Z I L
BRAZIL: IDB Approves $195MM Loan for MSME Productivity in Sao Paulo
C H I L E
LATAM AIRLINES: Amends Plan to Provide Payment of W&C Creditor
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Fund Aims to Boost Cocoa Producers
P U E R T O R I C O
INSTITUTO MEDICO: Court Dismisses Suit vs. Condado 7
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A R G E N T I N A
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ARGENTINA: Fernandez Slams Macri Anew on "Unpayable Debt" With IMF
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Buenos Aires Times reports that President Alberto Fernandez slammed
Macri in speech to Congress, prompting opposition walkout.
Opposition PRO party lawmakers walk out on speech to Congress after
president once again attacks Mauricio Macri for agreeing an
"unpayable foreign debt" with the International Monetary Fund
(IMF), the report notes.
The report relays that President Alberto Fernandez inaugurated the
140th period of ordinary sessions of Congress in early March 2022
by saying as much what he would not do as what he would - Argentina
will face "no tarifazos" (major utility bill increases), he said,
with neither labor nor pension reforms included in the trailed
agreement with the International Monetary Fund.
The most dramatic moments of the president's speech lasting over 90
minutes came when Fernandez let rip at the previous Mauricio Macri
administration, saying it was responsible for Argentina's
multi-billion debt with the multilateral lender, according to
Buenos Aires Times. Outraged by the accusation, which was
admittedly hardly being voiced for the first time, many opposition
deputies started walking out (those belonging to the PRO
centre-right party, while those in the Radical and Civic Coalition
wings of the Juntos por el Cambio opposition remained in their
benches), the report notes.
Yet if the PRO caucus walked out, Maximo Kirchner - the ruling
Frente de Todos coalition's caucus chief until last month - did not
even show up, remaining far away in Patagonia, the report notes.
He blamed the beginning of the school year for his absence, though
most saw it as a result of his decision to step down from his post
due to his opposition to any deal with the IMF, the report
discloses.
Little Mention for Ukraine
Flanked by Vice-President Cristina Fernandez de Kirchner and
Chamber of Deputies Speaker Sergio Massa, President Fernandez began
with a brief mention of the conflict between Russia and Ukraine,
lumping it in with the other crises facing Argentina and the world
("We face a period of health, economic and war crises") before
deploring the strife ravaging Europe and calling for a minute of
silence, the report discloses.
"Argentina cannot escape the context in which we are immersed," he
told the chamber, the report says.
Many opposition deputies had a blue-and-yellow Ukrainian flag in
front of them to press for a stronger stance against the Russian
invasion from the government, which condemned "aggression" from
Moscow before the United Nations in the following days, the report
notes.
The pandemic ("the consequences of Covid were multi-dimensional")
and "multi-causal" inflation ("the main problem we Argentines
have") were next on the president's list. On the former he
highlighted the rapidity of the vaccination campaign nationwide
with Argentina receiving 112 million doses of vaccine from seven
different countries, further claiming that only China and Spain had
comparable percentages of vaccination, the report discloses.
"The worst is now behind us," he declared, before taking aim at the
opposition. "It might be tempting for some to politicise such a
tragedy by blaming those of us who had the duty of governing at
that moment of humanity but it is definitely unacceptable," the
report relays.
Fernandez did leave a little room for self-criticism though:
"Absolutely everything I did fighting the pandemic had no other aim
than to save as many lives as possible in a difficult and
unpredictable context. I'm not infallible, I'm a human being. I've
made mistakes on occasions but I have the inner calm that no
inhabitant of our country has remained without health care," the
report relays.
Economic Growth
Addressing the economy, Fernandez underlined the impact of strong
state intervention ("with a weak state the powerful always win out
and the majority of the people lose,") and hailed last year's
growth rate of 10.3 percent, far above forecasts and reverting the
2020 plunge caused by the pandemic, the report discloses. He
singled out public works as central to this recovery: "We did not
stop public works in the pandemic and we won't in the future," the
report notes.
Other examples of recovery which he highlighted were the PyMES
(small and medium-sized firms), "generalized and federal and the
highest in the last 20 years" and employment with unemployment down
to 8.2 percent, "the lowest in over three years" while real wages
picked up slightly last year "although less than we would like,"
the report relays.
"It's time to register the activities of the popular economy with
working cooperatives participating in public works," he continued,
adding that it was essential to transform social plans into formal
employment, the report notes.
The Frente de Todos leader then ironically swiped at the opposition
and tensions over this year's budget bill: "They say we Peronists
use Congress to rubberstamp laws but in almost 40 years Congress
has only left Cristina in 2010 without a budget and me this year,"
the report says.
The president then moved onto the central issue of the IMF
agreement, eventually triggering the opposition walkout, the report
relays.
Blasting the 2018 stand-by loan of US$57 billion borrowed by the
Mauricio Macri presidency, Fernandez said: "It did not leave us a
single bridge or highway, just an unpayable foreign debt. We're
taking a new step with this IMF agreement, it's an immense debt and
without an agreement we cannot construct certainties in Argentina.
The agreement we've reached with the IMF is the best which could be
achieved and governing is an exercise of responsibility," the
report notes.
"This new agreement reschedules existing debt. The payments will
begin in 2026 and end in 2034," he revealed, the report discloses.
"This agreement does not contemplate restrictions which affect our
development . . . . or double down our sovereignty," the president
insisted, spelling out the absence of pension or labor reform, the
report relays.
Turning to the central aspect of public service pricing, he said:
"There will be no more tarifazos in Argentina. We will segment the
subsidies, aiming at preventing the 10 percent with the highest
incomes from enjoying their benefit," the report says.
As for the remaining public service clients, the President said:
"Let us be inspired by Law 27,443 (which pegged utility pricing
increases to wage trends) voted in 2018 and vetoed by the
then-president Mauricio Macri. What we will do is to use that same
indicator but establishing that the evolution of public service
pricing is clearly below wage trends," the report notes.
He concluded with another blast at the Macri Presidency:
"Argentines have the right to know who were responsible for such
folly." In last year's state-of-the-nation speech, he instructed
the Treasury Prosecutor to lodge a criminal lawsuit against those
responsible for the 2018 debt, the report discloses.
Despite the walkout, Fernandez called on lawmakers across the
political spectrum to support the IMF agreement, the report adds.
China Deal, New Policies
While on the subject of the IMF, President Fernandez was able to
announce that the expansion of the currency swap with China had
been confirmed, the report relays.
President Fernandez then advanced to the legislative bills and
government plans proposed for this year, including the expansion of
public investment with the creation of 200,000 jobs ("It's not
about stabilizing the economy to then grow, it's about growing to
stabilize"), a youth employment plan, reaching a nine-digit figure
for exports, '"decisive advances in the production of vaccines,"
"industrialization with a gender perspective," boosting the
Integral Sexual Health scheme, a 2030 science and technology plan
and a series of investments to improve transport, education, rent
legislation and access to housing, national highways, gas pipelines
and connectivity, the report relays.
While not occupying the same prominence as in last year's
state-of-the-nation speech, judicial reform was far from absent,
the report notes. While he did not omit to mention crime-fighting,
President Fernandez underlined: "The Supreme Court must also be the
object of analysis and decisions in this legislative year," the
report relays.
The president then blasted the use of the intelligence services for
illegal espionage, persecution and extortion while adding: "We
continue to hold the policies of memory, truth and justice to be
the highest" with his concept of human rights also including the
indigenous, the handicapped and the non-binary, the report
discloses.
Towards the end of his speech, he announced a bill to extend both
paternity and maternity leave (with Argentina one of the Latin
American countries most lagging with parental leave) while
underlining his commitment to the struggle against climate change,
the report says.
Among various opposition critiques following the
state-of-the-nation speech, PRO deputy Gerardo Milman said that the
Frente de Todos government would be leaving the country with the
biggest debt increment in its history of US$90 billion after
already printing over US$75 billion, also terming the IMF agreement
a "time-bomb," the report notes.
Other deputies criticized the speech's failure to make any mention
of the fires ravaging Corrientes, the report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its 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.
Moody's credit rating for Argentina was last set at Ca on Sept.
28, 2020. Fitch's credit rating for Argentina was last reported on
Sept. 11, 2020 at CCC, which was a rating upgrade from CC. DBRS'
credit rating for Argentina is CCC, given on Sept. 11, 2020.
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. Formal negotiations on the new financing
began in November 2020. Obligations to the IMF amount to $44
billion, with major repayments coming due in 2022 and 2023.
ARGENTINA: IDB Approves $37MM Loan for Public Investment Efficiency
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The Inter-American Development Bank (IDB) approved a $37 million
loan to improve public investment efficiency at different
government levels to promote economic and social development in
Argentina.
This program will increase the availability of viable, shovel-ready
public investment projects; reduce coverage gaps and promote
territorial equity; and increase the efficiency of state actors by
improving their capacity to manage the public investment project
cycle of national, provincial, and municipal governments.
The loan will help strengthen the public investment cycle at the
Secretariat of Strategic Affairs, the Ministry of Public Works, and
the Ministry of the Interior - key agencies in this sector. To this
end, the program will support strategic pre-investment management
and development of strategic pre-investment studies with a focus on
climate resilience and low greenhouse gas emissions.
The initiative will also strengthen the management of national,
provincial and municipal public investment, financing
pre-investment studies, studies to identify the climate
vulnerability of works, adaptation and greenhouse gas emission
reduction measures, and the design and implementation of a strategy
to strengthen the project cycle.
Among other specific actions, the program will support the Ministry
of Public Works' Digital Transformation Plan, expand the
MapaInversiones platform, and identify public investments with a
climate impact. It will also support incorporating a gender
perspective to pre-investment studies and applying
gender-disaggregated indicators that favor decision-making in the
development of policies with this perspective.
The loan will improve the Federal Development Plan's pre-investment
capacity by generating a portfolio of projects for the 23 provinces
and the Autonomous City of Buenos Aires, and finance activities
such as pre-investment studies and projects as well as evaluations
of investment outcomes.
This operation is in line with Vision 2025 - Reinvesting in the
Americas: A Decade of Opportunity, created by the IDB to achieve
recovery and inclusive growth in Latin America and the Caribbean,
in the areas of digital economy, gender and inclusion, and climate
change.
The $37 million IDB loan has a 25-year maturity, a 5.5-year grace
period, an interest rate based on SOFR, and $6.5 million in local
counterpart funds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its 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.
Moody's credit rating for Argentina was last set at Ca on Sept.
28, 2020. Fitch's credit rating for Argentina was last reported on
Sept. 11, 2020 at CCC, which was a rating upgrade from CC. DBRS'
credit rating for Argentina is CCC, given on Sept. 11, 2020.
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. Formal negotiations on the new financing
began in November 2020. Obligations to the IMF amount to $44
billion, with major repayments coming due in 2022 and 2023.
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B R A Z I L
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BRAZIL: IDB Approves $195MM Loan for MSME Productivity in Sao Paulo
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The State of Sao Paulo in Brazil will increase productivity and
access to private financing for innovation in micro, small, and
medium-sized enterprises (MSMEs) with a $195 million loan from the
Inter-American Development Bank (IDB).
Its goal is to promote the growth of innovative ventures,
increasing financial financial leverage through new financial
instruments, and encouraging MSME innovation development by
improving credit conditions to stimulate private investment.
This is the second individual operation under the "Brasil Mais
Digital" program, a $1 billion Conditional Credit Line for
Investment Projects (CCLIP) approved by the IDB in April 2021. It
is also the first individual operation in the digital economy
sector and the first to be executed by a local development bank:
Desenvolve SP, known for its "Banco do Empreendedor"
(Entrepreneur's Bank) corporate brand.
The new program will promote private investment in innovative
ventures by developing and implementing new financing instruments
to strengthen the early-stage investor base, diversify financing,
and leverage public and private resources to share risks through
co-investment in funds and other instruments.
It will also seek to increase private investment for innovation and
technological adoption in MSMEs through credit lines and processes
of guarantee coverage, and promote innovation and technological
adoption aimed at 4.0 technologies, environmental sustainability,
and climate change.
The population of the State of Sao Paulo will benefit from the
program through support for investment in innovations that improve
the quality of life in different areas. The initiative will also
directly benefit 3,410 formal innovative companies that use the new
financing instruments being promoted.
Additionally, proceeds from the program will help issue 1,400
guarantees for innovation and technological adoption in companies,
as well as the design and implementation of a pilot program to
support women entrepreneurs who lead early-stage companies.
This operation is in line with Vision 2025 - Reinvesting in the
Americas: A Decade of Opportunity, created by the IDB to achieve
recovery and inclusive growth in Latin America and the Caribbean,
in the areas of small and medium-sized enterprises, digital
transformation, promotion of gender equality, and the fight against
climate change.
The IDB loan of $195 million has a 25-year maturity, a 6-year grace
period, an interest rate based on SOFR, and $120.2 million in
parallel financing with local resources.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Jair Bolsonaro is the current president, having
been sworn in on Jan. 1, 2019.
Standard & Poor's credit rating for Brazil stands at BB- with
stable outlook (April 2020). S&P's 'BB-/B' long-and short-term
foreign and local currency sovereign credit ratings for Brazil
were affirmed in December 2021 with stable outlook. Fitch Ratings'
credit rating for Brazil stands at 'BB-' with a negative outlook
(November 2020). Fitch's 'BB-' Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) has been affirmed in
December 2021. Moody's credit rating for Brazil was last set at
Ba2 with stable outlook (April 2018). DBRS's credit rating for
Brazil is BB (low) with stable outlook (March 2018).
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C H I L E
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LATAM AIRLINES: Amends Plan to Provide Payment of W&C Creditor
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LATAM Airlines Group S.A. ("LATAM Parent") and certain of its
debtor affiliates submitted a Fourth Revised Disclosure Statement
with respect to the Joint Plan of Reorganization dated Feb. 28,
2022.
The Fourth Revised Disclosure Statement reflects revisions
principally based on the rulings and guidance provided by the Court
at the hearing to approve the Disclosure Statement Motion, further
revisions and comments made by certain parties-in interest, and to
provide for the distribution of provisional ballots for Holders of
Claims in Class 4 (without altering the Plan's classification of
Class 4 as Unimpaired).
On February 18, 2022, the Debtors filed the Debtors' Motion for an
Order (i) Authorizing the Debtors to (a) Enter into the Amended and
Restated Credit Agreement, (b) Obtain Replacement Tranche C
Postpetition Financing, and (c) Grant Superpriority Administrative
Expense Claims and (ii) Granting Related Relief (the "Fourth DIP
Motion") which seeks approval of an amendment and restatement of
the DIP Credit Agreement (the "Amended and Restated DIP Credit
Agreement"). The proposed Amended and Restated DIP Credit Agreement
extends the scheduled maturity date of all tranches under the DIP
Credit Agreement, refinances and replaces the Tranche C facility
existing under the DIP Credit Agreement and includes certain
reductions in fees and interest provided for under the DIP Credit
Agreement.
The total committed amount under the Amended and Restated DIP
Credit Agreement will increase to $3.295 billion which reflects an
increase in the committed amount under the Tranche C facility from
the existing $1.15 billion to $1.245 billion which is intended to
cover the costs of refinancing the Tranche C facility existing
under the DIP Credit Agreement. The scheduled maturity date of the
Amended and Restated DIP Credit Agreement will be August 8, 2022,
subject to the possibility that LATAM may extend the maturity date
at its discretion to a date no later than October 31, 2022,
provided LATAM may further extend the maturity date to a date no
later than the (x) earlier of November 30, 2022 or (y) the
termination of the Restructuring Support Agreement, in the event
the World Health Organization or the U.S. Centers for Disease
Control designates any COVID-19 variant as a variant of concern.
The Fourth DIP Motion is scheduled to be heard by the Bankruptcy
Court on March 10, 2022.
Sajama and SVP Settlement Motions
On December 8, 2021, the Debtors filed motions seeking approval of
(a) a stipulated settlement with Sajama Investments, LLC ("Sajama")
related to rejection damages claims arising from the Court-approved
surrender of seventeen aircraft (the "Sajama Settlement Motion")
and (b) the long-term restructuring pursuant to new leases (the
"New Leases") for sixteen aircraft, including the Tritan, Centaurus
and Vintage JOLCO aircraft (the "Go Forward Aircraft") and a
settlement agreement for certain related claims for those aircraft
and four A350s that were rejected by the Debtors during the Chapter
11 Cases (the "SVP Settlement Motion" and, together with the Sajama
Settlement Motion, the "Settlement Motions").
The Sajama Settlement Motion sought to resolve twenty-four claims
acquired by Sajama in exchange for a single general unsecured claim
against LATAM Parent of $695 million. The SVP Settlement Motion
sought to allow general unsecured claims of (a) $484 million
against LATAM Parent arising under certain headleases, (b) $226
million against LATAM Parent arising under certain guarantees, and
(c) $140 million against TAM arising under certain headleases and
subleases.
The Creditors' Committee and Banco Estado each filed objections to
the Settlement Motions. The objections argued, among other things,
that the proposed allowed claims set forth in the Settlement
Motions were unreasonably large and overvalued and that the
Debtors' negotiations with the counterparties to the Settlement
Motions were improperly tainted by the Debtors' negotiations
concerning the Plan and RSA.
After an all-day evidentiary hearing held on January 21, 2022 and
further arguments heard on January 24, 2022, on January 28, 2022,
the Bankruptcy Court issued a memorandum decision and order
approving the Settlement Motions and overruling the objections (the
"Settlements Decision") for the reasons set forth in the
Settlements Decision.
The classification and treatment of Holders of Allowed Claims in
Class 4 is part of the overall Plan terms negotiated and agreed to
among the Debtors, the Commitment Parties and the Eblen Group, as
part of the agreements contained in the Restructuring Support
Agreement. [Certain parties, including the BNYM as trustee under
the LATAM 2024 and LATAM 2026 Bonds and counsel to certain Holders
of the NY Law Bonds have argued that the NY Law Bonds are entitled
to payment of post-petition interest and fees with respect to their
allowed claims although the Plan does not provide for such
amounts.]
The Plan treatment of Holders of Allowed Claims in Class 4
comprises and depends on a combined recovery on account of their
Allowed Claims against both LATAM Parent and LATAM Finance Ltd. If
the Court were to order the substantive consolidation of LATAM
Finance, Peuco and LATAM Parent, or if the Court were to grant
LATAM Finance Claim Objection, the recoveries for Holders of the NY
Law Bonds (Class 4 Claims) would be reduced and the recoveries for
existing Holders of Class 5 Claims would be improved.
Following the execution of the Restructuring Support Agreement, the
Debtors continued to engage in constructive discussions with
members of the Ad Hoc Group of LATAM Bondholders. Each Initial W&C
Creditor Group Party executed a joinder agreement to the
Restructuring Support Agreement (each joinder agreement a "W&C
Creditor Group Joinder Agreement"), effective as of February 10,
2022.
Under each W&C Creditor Group Joinder Agreement and the
Restructuring Support Agreement (as amended on February 10, 2022),
the relevant Initial W&C Creditor Group Parties agreed to certain
commitments made by the Commitment Parties under the Restructuring
Support Agreement, including, inter alia, using commercially
reasonable efforts to pursue, support, solicit, implement, confirm,
and consummate the Restructuring Transactions, as applicable, and
also agreed to direct BNYM, in its capacity as trustee under the NY
Law Bonds, to withdraw the Objection of the Bank of New York
Mellon, as Trustee to the Debtors' Motion to Approve the Disclosure
Statement.
In turn, the Plan has been amended to provide for the payment of
the W&C Creditor Group Fees consistent with the terms of the Plan
which includes the reasonable and documented fees, expenses,
disbursements and other costs incurred in connection with the
Chapter 11 Cases through January 12, 2022, by the Ad Hoc Group of
LATAM Bondholders, up to a maximum aggregate amount of $15
million.
The Plan also provides for the payment of the W&C Initial Creditor
Group Fees, which includes the payment of certain reasonable and
documented fees and expenses of certain legal counsel incurred by
the Initial W&C Creditor Group Parties in connection with, inter
alia, the negotiation and execution of the W&C Creditor Group
Joinder Agreement, the approval of the Disclosure Statement and
Plan, the filing of pleadings in defending the challenges to the
allowance or treatment of any Joining Party's Participating Claims,
and the taking of certain other actions at the request of the
Debtors as provided in the Restructuring Support Agreement.
The Creditors' Committee does not believe that the Plan's proposed
payment of the W&C Creditor Group Fees and W&C Initial Creditor
Group Fees complies with the Bankruptcy Code, and the Debtors
disagree with the Creditors' Committee's position.
Counsel for the Debtors:
CLEARY GOTTLIEB STEEN & HAMILTON LLP
Richard J. Cooper
Lisa M. Schweitzer
Luke A. Barefoot
Thomas S. Kessler
One Liberty Plaza
New York, New York 10006
Telephone: (212) 225-2000
Facsimile: (212) 225-3999
About LATAM Airlines Group
LATAM Airlines Group S.A. -- http://www.latam.com/-- is a
pan-Latin American airline holding company involved in the
transportation of passengers and cargo and operates as one unified
business enterprise. It is the largest passenger airline in South
America.
Before the onset of the COVID-19 pandemic, LATAM offered passenger
transport services to 145 different destinations in 26 countries,
including domestic flights in Argentina, Brazil, Chile, Colombia,
Ecuador and Peru, and international services within Latin America
as well as to Europe, the United States, the Caribbean, Oceania,
Asia and Africa.
LATAM and its 28 affiliates sought Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in
Chile, Peru, Colombia, Ecuador and the United States are part of
the Chapter 11 filing.
The Debtors disclosed $21,087,806,000 in total assets and
$17,958,629,000 in total liabilities as of Dec. 31, 2019.
The Hon. James L. Garrity, Jr., is the case judge.
The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as
bankruptcy counsel, FTI Consulting as restructuring advisor, Lee
Brock Camargo Advogados as local Brazilian litigation counsel, and
Togut, Segal & Segal LLP and Claro & Cia in Chile as special
counsel. The Boston Consulting Group, Inc. and The Boston
Consulting Group UK LLP serve as the Debtors' strategic advisors.
Prime Clerk LLC is the claims agent.
The official committee of unsecured creditors formed in the case
tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters
Jureller Southard & Stevens, LLP, as conflicts counsel, UBS
Securities LLC as investment banker, and Conway MacKenzie, LLC, as
financial advisor. Ferro Castro Neves Daltro & Gomide Advogados is
the committee's Brazilian counsel.
The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as
counsel.
Glenn Agre Bergman & Fuentes, LLP, led by managing partner Andrew
Glenn and partner Shai Schmidt, has been retained as counsel to the
Ad Hoc Committee of Shareholders.
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D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Fund Aims to Boost Cocoa Producers
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Dominican Today reports that with an investment of RD$60 million,
the Special Fund for Agricultural Development (Feda) in the
Dominican Republic presented a plan to promote the industry and
consumption of chocolate. It aims at the agro-industrialization of
Dominican cocoa, financing and supporting small and medium-sized
chocolate manufacturers, grouped in associations and cooperatives,
mainly women's, to improve their production and quality. The
Dominican Republic is said to be a leading exporter of cocoa.
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. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCRLA 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.
Fitch Ratings, in December 2021, revised the Outlook on Dominican
Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR)
to Stable from Negative and affirmed the IDRs at 'BB-'. The
revision of the Outlook to Stable reflects the narrowing of
Dominican Republic's government deficit and financing needs since
Fitch's last review resulting in the stabilization of the
government debt/GDP ratio, as well as the investment-driven
economic momentum, reflected in the faster-than-expected economic
recovery in 2021 that Fitch expects to carry into above-potential
GDP growth during 2022 and 2023.
Standard & Poor's, also in December 2021, revised its outlook on
the Dominican Republic to stable from negative. S&P also affirmed
its 'BB-' long-term foreign and local currency sovereign credit
ratings and its 'B' short-term sovereign credit ratings. The
stable outlook reflects S&P's expectation of continued favorable
GDP growth and policy continuity over the next 12 to 18 months that
will likely stabilize the government's debt burden, despite lack of
progress with broader tax reforms, S&P said. A
rapid economic recovery from the downturn because of the pandemic
should mitigate external and fiscal risks.
Moody's affirmed the Dominican Republic's long-term issuer and
senior unsecured ratings at Ba3 and maintained the stable outlook
in March 2021.
=====================
P U E R T O R I C O
=====================
INSTITUTO MEDICO: Court Dismisses Suit vs. Condado 7
----------------------------------------------------
The adversary proceeding styled INSTITUTO MEDICO DEL NORTE, INC.,
Plaintiff, v. CONDADO 7, LLC, Defendant, Adv. Proc. No.
21-00033(ESL)(Bankr. D.P.R.) is before the United States Bankruptcy
Court for the District of Puerto Rico upon the motion for summary
judgment filed by Instituto Medico del Norte, Inc., the opposition
filed by defendant Greengift Capital, LLC, substituted defendant of
action against Condado 7 LLC, in compliance with the court's minute
order at hearing held on January 21, 2022.
Instituto Medico insists its stipulation with Oriental Bank, as
well as the confirmed plan, provide that the portion of the credit
in the amount of $3,585,388.53 does not generate interest.
Instituto Medico states the main purpose of the supplement is to
provide the court with newly acquired evidence that confirm its
allegations. Instituto Medico claims the newly acquired evidence
stems from disclosures recently provided by Oriental.
Greengift opposes the Instituto Medico's supplement, realleging its
previous position. In addition, Greengift states Instituto Medico
has not submitted Oriental's Workout Plan Proposal dated August 24,
2015, which Instituto Medico avers serves as basis for its
contention. Greengift stresses that the stipulation, the confirmed
plan, and the referred 1991 agreement, which was not produced, do
not sustain Instituto Medico's claim that the $3,585,388.53 does
not generate interest.
Greengift further states that at the status conference held on
January 21, 2022, the Court "expressed concerns . . . as to the
allegations in the complaint, namely, when, why and by whom
Instituto [Medico] determined that the payments were not being
applied as agreed to in the stipulation with Oriental and the
confirmed plan; and as to the specific part of the 1991 agreement
.
. . providing for a no interest-bearing note." Greengift asserts
that Instituto Medico has failed to answer the court's concerns,
only alleging that the stipulation and the plan are "clear." What
is clear, Greengift argues, is that neither the stipulation nor the
confirmed plan includes a provision that a portion of the proof of
claim filed would not accrue interest.
The issue before the court is whether the payments made by
Instituto Medico have been credited and applied to the restructured
allowed secured claim in accordance with the Amended Chapter 11
plan filed on July 1, 2016, confirmed on July 26, 2016, which
incorporates the stipulation with Oriental Bank, approved on
September 28, 2015. Bankruptcy Judge Enrique S. Lamoutte holds that
Instituto Medico has the burden of establishing that they have not
been made accordingly.
In October 2021, the court found that the "conclusory allegations
in the complaint do not clearly establish the failure nor the
extent of the alleged misapplication." The court also concluded
that the "determination of the above moves the court to consider
the matter through a motion for summary judgment as it is
fact-based, and the dispositive data is not before the court. The
analysis must be based on three factors. First, determine how the
payments should have been made and applied as set forth in the
confirmed plan. Second, provide a detail of the payments made.
Third, provide a detail of how the payments were applied and the
balance owed after each payment."
Judge Lamoutte now holds that Instituto Medico has failed to
present to the court evidence or reasonable support for its
allegation that its stipulation with Oriental as well as the
confirmed plan, provide that the portion of the credit in the
amount of $3,585,388.53 does not generate interest. Moreover, even
if the $3,585,388.53 did not generate interest at some point in
time, Instituto Medico has failed to provide evidence that it has
complied with the payments as provided for in the confirmed plan
and the stipulation, the judge points out, holding that conclusory
allegations do not suffice.
On the other hand, assuming the truth of all well-plead facts in
the amended complaint and giving the benefit of all reasonable
inferences therefrom, Judge Lamoutte concludes the complaint does
not plead a plausible claim as it is based on conclusions not
supported by the facts. Instituto Medico has had a reasonable
opportunity to fill the factual gap and has been unable to do so,
the judge says.
Accordingly, Judge Lamoutte dismisses Instituto Medico's motion for
summary judgment and Greengift's motion to dismiss is granted.
A full-text copy of Judge Lamoutte's Opinion and Order dated March
1, 2022, is available at https://tinyurl.com/ycks6rwk from
Leagle.com.
About Instituto Medico
Instituto Medico del Norte, Inc. -- aka Centro Medico Wilma N.
Vazquez, aka Hospital Wilma N. Vazquez Skill Nursing Facility of
Centro Medico Wilma N. Vazquez -- sought protection under Chapter
11 of the Bankruptcy Code on Oct. 30, 2013 (Bankr. D.P.R. Case No.
13-08961). The case is assigned to Judge Mildred Caban Flores.
The Debtor scheduled $20,843,692 in total assets and $20,107,642 in
total liabilities. The Debtor, however, said its real property has
a book value of $16,000,000 and personal property is worth
$6,105,979.
The Debtor tapped as counsel Fausto David Godreau Zayas, Esq., and
Rafael A. Gonzalez Valiente, Esq., at Latimer Biaggi Rachid &
Godreau, in San Juan, Puerto Rico. Luis B. Gonzalez & Co. CPA's
P.S.C. serves as accountant.
The U.S. Trustee for the District of Puerto Rico has appointed Dr.
Carlos Mellado (b/t Lcda Dinorah Collazo Ortiz) as patient care
ombudsman.
* * *
MCS Advantage, Inc., MCS Life Insurance Company, Medical Card
System, Inc., filed a motion to convert the bankruptcy case to a
liquidation under Chapter 7.
On July 1, 2016, the Debtor filed a Plan of Reorganization which
was confirmed on July 26, 2016.
*********
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