/raid1/www/Hosts/bankrupt/TCRLA_Public/220810.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, August 10, 2022, Vol. 23, No. 153
Headlines
A R G E N T I N A
ARGENTINA: Weakness of Peso Further Exacerbated by Strong Dollar
CORDOBA PROVINCE: S&P Withdraws 'CCC+' LT Issuer Credit Rating
M E X I C O
GRUPO AEROMEXICO: Workers Union Wants Court to Hear Vote Suit
P U E R T O R I C O
CONDADO ROYAL: Claims Will be Paid from Consigned Funds
T R I N I D A D A N D T O B A G O
NATIONAL FLOUR MILLS: Reports $2.33 Million Loss in First Half 2022
U R U G U A Y
URUGUAY: Gets $6.5M IDB Loan to Enhance Agriculture Digitalization
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Weakness of Peso Further Exacerbated by Strong Dollar
----------------------------------------------------------------
EFE News reports that the dollar's strength globally is combining
with factors more specific to Argentina - high inflation, a
scarcity of hard currency, an elevated budget deficit and political
uncertainty - to create even more weakness in the peso.
"The (strong) dollar is exacerbating a problem that Argentina had
before," Gabriel Caamano, an economist with the Buenos Aires-based
Ledesma consulting firm, told EFE News, warning about expectations
for triple-digit inflation, money printing to finance the budget
deficit, an energy shortfall and an erosion of political
confidence.
"The external shocks figure to accelerate the process," Caamano
said, according to EFE News.
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.
Argentina obtained on March 25, 2022, approval from the Executive
Board of the International Monetary Fund (IMF) of a 30-month
extended arrangement under the Extended Fund Facility (EFF)
amounting to SDR 31.914 billion (equivalent to US$44 billion).
Under the new terms, Argentina secured a much-needed grace period
that postpones repayment of its debt. However, IMF warned of
exceptionally high risks to the program.
CORDOBA PROVINCE: S&P Withdraws 'CCC+' LT Issuer Credit Rating
--------------------------------------------------------------
S&P Global Ratings withdrew its 'CCC+' long term issuer credit
ratings on the province of Cordoba at the issuer's request. The
outlook was stable at the time of the withdrawal.
===========
M E X I C O
===========
GRUPO AEROMEXICO: Workers Union Wants Court to Hear Vote Suit
-------------------------------------------------------------
A union of workers at Mexican flag carrier Grupo Aeromexico is
asking a New York bankruptcy court to rule on allegations it lied
to an investment firm about what plan voting rights the firm would
get when it purchased the union's Chapter 11 claims against
Aeromexico.
In a motion filed Friday, July 29, 2022, in federal district court,
the union sought to refer a suit over the claims purchase filed by
buyer Invictus Global Management in New York state court in June to
the bankruptcy court, arguing a bankruptcy court judge's ruling is
needed because the claims relate to Aeromexico's restructuring
plan.
Defendant Sindicato Nacional Trabajadores al Servicio de las
Laneas Aereas, Transportes, Servicios, Similares, y Conexos
("Independencia"), by and through its attorneys Wollmuth Maher &
Deutsch LLP, served a notice of the removal to the United States
District Court for the Southern District of New York for referral
to the United States Bankruptcy Court for the Southern District of
New York of all claims and causes of action asserted in an action
pending in the New York Supreme Court, County of New York, under
Index No. 656887/2022, entitled Invictus Global Management LLC,
Plaintiff, v. Monomoy Capital Partners LLC and Sindicato Nacional
Trabajadores al Servicio de las Lineas Aereas, Transportes,
Servicios, Similares, y Conexos, Defendants (the "Invictus
Action").
Between December 2020 and January 2021, Aeromexico reached
agreements with Independencia and three other Mexican unions on the
terms for their respective new collective bargaining agreements.
On April 22, 2021, the Bankruptcy Court entered an order
authorizing Aeromexico to enter agreements establishing new labor
conditions under Aeromexico's CBAs with each of the Unions, which
reflected consensual resolutions regarding modifications to the
Unions' respective CBAs.
The CBA Order also provided that Independencia was entitled to
three allowed general, non-priority unsecured claims. The amounts
of the allowed claims, and the relevant debtors, are as follows:
$44,090,000 (Aerovias); $2,530,000.00 (Aerolitoral); and $1,110,000
(Cargo).
The "Bankruptcy Protection Covenant" referenced in paragraph 8 was
an agreement entered into between Aeromexico and ASPA and was
attached as Annex 1 to the CBA Order, and required each of the
Unions to support a Complying Plan proposed by the Debtors,
including by voting in favor thereof.
On Aug. 9, 2021, Independencia entered into three separate Transfer
of Claim Agreements whereby Cowen purchased all of Independencia's
right, title, and interest to the Independencia Claims, including,
but not limited to, all rights, duties, and obligations related to
"voting and other similar rights." On Aug. 18, 2021, Cowen entered
into substantially similar agreements with Invictus, as Investment
Manager for Invictus Special Situations Master I, L.P., Corbin
Opportunity Fund, L.P., and Corbin ERISA Opportunity Fund, Ltd.,
whereby it sold the rights it obtained to the Independencia Claims
to Invictus.
In December 2021, Invictus submitted nine ballots totaling $47.3
million purporting to vote the Independencia Claims against the
Chapter 11 Plan in violation of paragraphs 8 and 12 of the CBA
Order.
On Dec. 24, 2021, Aeromexico filed a Motion to Enforce the Court's
Order Authorizing Entry Into New Agreements Establishing New Labor
Conditions with ASPA, ASSA, STIA, and Independencia.
On Jan. 21, 2022, the Bankruptcy Court entered an order enforcing
the CBA Order against Invictus, including by ordering that
Independencia Union Claims be deemed to have voted to accept the
Chapter 11 Plan.
On Jan. 24, 2022, Invictus filed a notice of appeal of the Court's
enforcement Order.
On Jan. 28, 2022, Aeromexico, Invictus, and the Ad Hoc Group of
OpCo Creditors entered a settlement agreement, pursuant to which,
among other things, Aeromexico agreed to request that the Court
vacate the Enforcement Order and permit Invictus to vote the
Independencia Claims in any way it deemed appropriate. In exchange,
Invictus agreed to withdraw its appeal.
This agreement was described on the record at the Confirmation
Hearing, was acknowledged by counsel for Invictus, who appeared at
the hearing, and reflected in the Confirmation Order.
On June 20, 2022, Invictus filed the Invictus Action in the Supreme
Court of New York against Monomoy Capital Partners LLC and
Independencia alleging, inter alia, that Monomoy and Independencia
misrepresented the applicability of paragraphs 8 and 12 of the CBA
Order and whether Invictus would be permitted to freely vote the
Independencia Claims, and therefore, fraudulently induced Invictus
to purchase the Independencia Claims (or, alternatively, that there
had been a mutual mistake.
"Removal of the claims in the Invictus Action and Referral to the
Bankruptcy Court will efficiently and expeditiously adjudicate
issues related to the treatment of the Independencia Claims under
the CBA Order, Invictus's settlement of the Enforcement Order, the
Exculpation Provisions of the Chapter 11 Plan and Confirmation
Order such that the claims asserted by Invictus are necessarily
connected to the implementation and administration of the Chapter
11 Plan and Confirmation Order," Independencia said.
Counsel for Independencia:
Ronald J. Aranoff
James N. Lawlor
Alexandra C. Spina
Katherine E. M. McQuillen
500 Fifth Avenue, 12th Floor
New York, NY 10110
Tel: (212) 382-3300
raranoff@wmd-law.com
jlawlor@wmd-law.com
aspina@wmd-law.com
kmcquillen@wmd-law.com
About Grupo Aeromexico
Grupo Aeromexico, S.A.B. de C.V. (BMV: AEROMEX) --
https://www.aeromexico.com/ -- is a holding company whose
subsidiaries are engaged in commercial aviation in Mexico and the
promotion of passenger loyalty programs. Aeromexico, Mexico's
global airline, has its main hub at Terminal 2 at the Mexico City
International Airport. Its destinations network features the United
States, Canada, Central America, South America, Asia and Europe.
Grupo Aeromexico and three of its subsidiaries sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 20-11563) on June 30,
2020. In the petitions signed by CFO Ricardo Javier Sanchez Baker,
the Debtors reported consolidated assets and liabilities of $1
billion to $10 billion.
The Debtors tapped Davis Polk and Wardell LLP as their bankruptcy
counsel, KPMG Cardenas Dosal S.C. as auditor, and Rothschild & Co
US Inc. and Rothschild & Co Mexico S.A. de C.V. as financial
advisor and investment banker. White & Case LLP, Cervantes Sainz
S.C. and De la Vega & Martinez Rojas, S.C., serve as the Debtors'
special counsel. Epiq Corporate Restructuring, LLC, is the claims
and administrative agent.
The U.S. Trustee for Region 2 appointed a committee to represent
unsecured creditors on July 13, 2020. The committee is represented
by Willkie Farr & Gallagher, LLP and Morrison & Foerster, LLP.
* * *
Aeromexico emerged from bankruptcy protection in March 2022 with a
$5 billion investment plan and changes to its fleet. Delta
Airlines, which held a 49% stake in Aeromexico before Chapter 11
bankruptcy proceedings, ended with a 20% share. Private equity firm
Apollo Global Management became the company's largest shareholder
following Chapter 11.
In June 2022, a majority of its shareholders approved a proposal to
exit the main Mexican stock exchange as part of the airline's
bankruptcy restructuring.
=====================
P U E R T O R I C O
=====================
CONDADO ROYAL: Claims Will be Paid from Consigned Funds
-------------------------------------------------------
Condado Royal Palm, Inc., filed with the U.S. Bankruptcy Court for
the District of Puerto Rico a Disclosure Statement describing its
Plan of Reorganization dated August 2, 2022.
Condado Royal Palm, Inc., is a corporation duly registered before
the Puerto Rico's Department of State identified as entity number
151061 since March 2, 2005.
Essentially, Debtor is a single asset real estate that was the
owner of a real property described on Debtor's Schedule A/B as
follows:
* A- Land Parking lot with units #10, 11, 12 & 13 located
at Condado, San Juan, P.R. Land #572; Folio 214; Tomo 13
Property Register Section San Juan I. Cadaster #040-039- 012-06
802.
* B- Land Parking lot with units #14, 15, 16 & 17 located
at Condado, San Juan, PR, Land #10,584; Folio 159; Tomo 281 "
Property Register Section San Juan I. Cadaster #040- 039-012-19
001.
Debtor filed this voluntary petition in a good faith effort to
first, monetize the only asset of this corporation while
eliminating a monthly interest charge which could exceed $50,000,
when considering other charges and/or expenses, to then resolve the
outstanding obligations of the Debtor, distributing the resulting
net sales proceeds among allowed creditors through a Plan of
Reorganization complying with the provisions of the Bankruptcy
Code.
On May 18, 2022, debtor filed Motion for Approval of a Purchase and
Sale Agreement Pursuant to Section 363 of the Bankruptcy Code, Free
and Clear of all Liens, Claims, Interests and Encumbrances. Through
the efforts of the real estate broker, the Debtor has been able to
procure a private sale over the appraisal amount for
$8,300,000.00.
After all selling expenses, notarial expenses were paid or
authorized reserves made, the Debtor moved the Court for the
consignment of Net Proceeds in the amount of $1,737,943.29.
Accordingly, to this date, the amount of $1,737,943.29 remain
consigned with the Bankruptcy Court.
Upon this sale, the lease agreement was also assumed and
transferred to purchaser. Therefore, debtor no longer operates a
business nor receives income from such lease agreement nor any
other source. Therefore, the consigned funds will provide the
funding for Debtor's Plan.
The resolution of these pending litigation and/or the conclusion of
the contentions between the parties by any other means will define
the final distribution and payment of the consigned funds either to
Ashford R.J.F. Inc. or to the other creditors.
Class 2 is comprised by ASFHORD R.J.F. INC. This creditor filed
Proof of Claim Number 3, with the secured amount of $4,007,814.50.
The creditor relies on a junior mortgage note payable to bearer
with a scheduled face amount of $3,200,000.00. Ashford R.J.F. Inc.,
per on account of this mortgage note. The allowance of the claim
and the validity of the lien are disputed on Adversary Proceeding
No. 22-00041.
In the event that Ashford is successful in validating its claim and
lien through a final and unappealable order by the Court, Ashford
would receive a secured distribution from the consigned funds for
the amount of the judgment or the amount of the consigned funds,
whichever is lower (the "contingent distribution"). Any of the
amounts of POC No. 3, which exceeds the contingent distribution as
determined by the Court, will be deemed and unsecured claim sharing
distribution within general unsecured creditors within Class 3.
In the event that Ashford is successful in validating its claim but
not its lien, it will be deemed and unsecured claim sharing
distribution within general unsecured creditors in Class 3.
Finally, if Ashford is claim is disallowed, this creditor will be
entitled to no distribution, and consigned funds will be
distributed to within general unsecured creditors in Class 3.
Accordingly, this creditor will receive in full whatever secured
payment to which it may be entitled per a court's final judgment.
Class 3 consists of General Unsecured Creditors. The debt under
this class has been estimated by Debtor in the amount of
$6,816,500.00. The distributions to this Class 3 are contingent to
a court's adjudication on the disputes with Class 2. In the event
that the Debtor is successful in achieving a court judgment which
entitles the debtor to receive any or all of the consigned funds at
the Bankruptcy Court, then such funds, less any necessary fees or
expenses, will be distributed to Class 3 within 30 days upon being
received.
Then, Class 3 claimants shall receive from the debtors the totality
of the funds received by the debtor, less any necessary fees or
expenses, to be paid pro-rata to all allowed claimants under this
class, which shall be payable in a lump sum and/or 30 days upon
being received. This class is impaired.
Class 4 consists of Equity Security Interest Holders. Equity
security and interest holders are the current stockholders of
Debtor to wit, Jose Alfonso Ramirez de Arellano and Mayra Teresa
Carlo Delgado.
Creditors under this class will not receive any payment. The equity
security holders will retain their interest on the reorganized
entity but only with the purpose of (1) filing a formal dissolution
of the corporation with the Puerto Rico Department of State no
later than 90 days after the Plan confirmed by the Court is fully
consummated and; (2) remaining as designated officers in charge
with the liquidation process of the corporation as required by
Puerto Rico Corporate Law, which entails the prosecution and
resolution of the causes of actions within the Bankruptcy Court
and/or State Court against Ashford, which will pave the way for the
distribution of the consigned funds among either Class 2 or Class
3.
Debtor shall have sufficient funds to make all payments due under
this Plan. On June 28, 2022, this Honorable Court entered Writ for
Sale of Property Free and Clear of Liens. After all selling
expenses, notarial expenses were paid or authorized reserves made,
the Debtor moved the Court for the consignment of Net Proceeds in
the amount of $1,737,943.29. Accordingly, to this date, the amount
of $1,737,943.29 remain consigned with the Bankruptcy Court.
Contingent to a court ruling and adjudication, the Court will
disburse the funds to the appropriate class of creditors.
A full-text copy of the Disclosure Statement dated August 2, 2022,
is available at https://bit.ly/3bvpMv2 from PacerMonitor.com at no
charge.
Attorney for Debtor:
LUGO MENDER GROUP, LLC
100 Road 165 Suite 501
Guaynabo, PR 00968-8052
Tel. (787)-707-0404
Fax (787)-708-0412
Wigberto Lugo-Mender
USDC-PR No. 212304
wlugo@lugomender.com
Alexis A. Betancourt Vincenty
USDC-PR 301304
a_betancourt@lugomender.com
About Condado Royal Palm
Condado Royal Palm, Inc. is a company in San Juan, P.R., engaged in
renting and leasing real estate properties.
Condado Royal Palm filed a petition for Chapter 11 protection
(Bankr. D.P.R. Case No. 22-01282) on May 4, 2022, listing
$8,300,995 in total assets and $15,493,286 in total liabilities.
Jose A. Ramirez de Arellano, president, signed the petition.
Judge Mildred Caban Flores oversees the case.
The Debtor tapped Wigberto Lugo Mender, Esq., at Lugo Mender Group,
LLC as legal counsel and MAM Group, LLC as real estate consultant.
=====================================
T R I N I D A D A N D T O B A G O
=====================================
NATIONAL FLOUR MILLS: Reports $2.33 Million Loss in First Half 2022
-------------------------------------------------------------------
Trinidad Express reports that despite two increases in the price of
flour this year, majority State-owned National Flour Mills
announced an after-tax loss of $2.33 million for the first six
months of its financial year, compared to a $2.14 million profit in
the same period in 2021.
The company reported revenue of $228.29 million for the period from
January 1 to June 30, 2022, which was an 8.66 per cent increase
over the same period in 2021, according to Trinidad Express.
In his review, NFM chairman Nigel Romano pointed out that the
Russian invasion of Ukraine impacted supplies of wheat, fuel and
fertiliser, which disrupted global markets and caused food and fuel
prices to soar, the report notes.
He said despite the 8.66 per cent in revenue, the global increase
in the price of wheat, which he described as "uncontrollable,"
caused a 12.3 per cent increase in the cost of sales, up from
$168.9 million for the first six months of 2021 to $189.7 million
in 2022, the report relays.
"The net effect was a 6.3 per cent decrease in gross profit, an 85
per cent decrease in operating profit, down from $3.3 million to
$500,000 and an after-tax loss of $2.3 million compared to an
after-tax profit of $2.1 million for the first six months of 2021,
the report discloses.
"This was the context for the 33 per cent increase in the price of
flour in June 2022," said Romano, the report notes.
He said the NFM board is acutely aware of the importance of flour
to the living standards of its customers, the report relays. As a
result, the board continues to work with management to monitor
global markets to ensure availability of wheat supplies, while
ensuring the availability of wheat supplies, the report says.
"We have secured supplies for the rest of the year and do not
expect to change prices in the near future," said the NFM chairman,
the report relays. However, future contracts normally work by
allowing buyers and sellers to agree on a price of wheat that will
be delivered in the future, typically three months' time. And a
lot can change in three months," the report discloses.
Apart from the 33 per cent hike in flour prices in June, NFM also
increased the wholesale price of flour by between 15 and 22 per
cent and the price of its retail brands by 10 per cent and 17 per
cent, effective January 3, 2022, the report notes.
In a statement on December 30, 2021, NFM said: "The most important
point to note is that wheat accounts for over 60 per cent of our
raw material imports and, during the past 18 months, the price of
wheat has increased more than 100 per cent, the report relays.
"The price of spring wheat moved from as low as US$5.00 per bushel
in 2020, to as high as US$10.91 per bushel this year. In fact the
price is US$10.06 per bushel. Additionally, the cost of freight has
increased more than 110 per cent," the report adds.
=============
U R U G U A Y
=============
URUGUAY: Gets $6.5M IDB Loan to Enhance Agriculture Digitalization
------------------------------------------------------------------
The Inter-American Development Bank (IDB) approved a $6.5 million
loan to make Uruguay's agricultural industry more competitive by
digitalizing more services and activities offered by the country's
Ministry of Livestock, Agriculture and Fisheries. The program will
place special emphasis on helping family farms and women in rural
areas adopt digital tools, as well as on using emerging
technologies to mitigate and adapt to the effects of climate
change.
These resources will further the process of modernizing the
Ministry of Livestock, Agriculture and Fisheries and of digitally
transforming procedures like permits and certificates for
transporting agricultural products and registering farmers. They
will also improve service to the public via different channels,
like social media or intelligent virtual assistants.
For the agricultural sector, the program will involve coordination
and management work to stimulate the creation of digital
technologies and facilitate access to them. For example, it will
launch the AgTech Uruguay Network, a platform focused on climate
change that is open to the private sector.
The resources will also be used to provide non-reimbursable
financing to farmers for technology projects that promote good
environmental practices and climate adaptation. These grants will
be awarded via a competitive process.
Additionally, the program will coordinate with the National
Institute for Employment and Professional Development to offer
training on digital skills for agriculture, with a focus on gender
equity. It will also give digital technical assistance to farmers.
Uruguay's agricultural industry has enjoyed brisk growth over the
last 20 years and now accounts for 70% of the country's exports.
However, it is highly vulnerable to climate fluctuations. Although
farming in Uruguay has become a high-tech industry, the
modernization process has largely left family farms behind. For
example, only 8% of family farms have access to advanced
technologies such as drones or artificial intelligence.
This program is aligned with digitalizing economies pillar of the
Vision 2025, the IDB Group's roadmap for accelerating recovery and
inclusive and sustainable growth in Latin America and the
Caribbean.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2022. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
.
* * * End of Transmission * * *