Brazilian firms see through US$2 billion beef restructuring

Brazilian firms see through US$2 billion beef restructuring
Por: Latin Laweyer
Data: 11/01/2010
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A Brazilian court has approved the 3.5 billion reais (US$2 billion) reorganisation proposal submitted by beef
group Independência, the largest restructuring filing of 2009.
Pinheiro Neto Advogados represented Independência in the process, along with Fleury Malheiros,
Gasparini, De Cresci e Nogueira de Lima.
Gasparini, De Cresci e Nogueira de Lima Advogados partner Pedro Paulo Wendel Gasparini says,
"Considering the dimension of the restructure proceeding and the diversity of involved interests, it was
strategically found convenient to hire two different law firms to carry out this process."
"While Pinheiro Neto was more focused on the negotiation process with creditors and on the definition of
the reorganization plan's terms, GCN represented the interests of Independência in all lawsuits filed by
creditors not submitted to judicial reorganisation effects," he explains.
The district court of Cajamar in São Paulo state confirmed the plan, which was submitted under the
country’s 2005 bankruptcy law, in December, noting the overwhelming (though not unanimous) support
from the company’s creditors.
Brazil’s 2005 bankruptcy law – modelled on the US bankruptcy code – was designed to give creditors
greater participation in the restructuring process, and in Independência’s case, this saw a host of banks and
bondholders turning to Brazil’s firms for legal advice.
Pinheiro Guimaraes - Advogados acted for an ad hoc committee of the company’s lenders, while Machado,
Meyer, Sendacz e Opice Advogados represented a committee of Independência’s bondholders.
Bank lenders Citibank retained Sergio Bermudes Advogados, JPMorgan Chase turned to Felsberg, Pedretti,
Mannrich e Aidar Advogados, Banco Santander hired TozziniFreire Advogados, while Demarest e Almeida
Advogados advised Banco Votorantim and Lehman Brothers.
Pinheiro Neto partner Luiz Fernando Paiva, says, “dealing with such a diversity of creditors with different
agendas and interests was the most challenging element in building up consensus and support during the
process. The plan provides for various means to reorganise Independência’s business and capital structure
addressing the different positions from relevant stakeholders.”
One of the two parties represented by Demarest e Almeida – Banco Votorantim – did not approve the plan,
while its other client Lehman Brothers did. Partner Celso Xavier says that “Independência and its main
financial creditors took a few months to reach a compromise over the legal advisor to be retained to help
out the creditors' steering committee, which initially stressed the relationship.”
Independência filed for bankruptcy protection in March last year, filing a parallel request with a New York
court at the same time.
In the US case, it has retained Davis Polk & Wardwell along with Wollmuth Maher & Deutsch LLO, while
Cleary Gottlieb Steen & Hamilton LLP represents the ad hoc bank lenders, and Bingham McCutchen LLP the
bondholders.
In order for the plan to be put into effect, Independência must procure an exit financing of 150 million
reais in order to make the first tranche of payments dues to its cattle raisers and suppliers. Lawyers say the
company fully expects to secure this financing by the deadline of 31 March.
Counsel in the Brazilian court filing
Counsel to Independência
In-house counsel - Renata Pimenta, Renata Steffen and Mariana Corrêa
Pinheiro Neto Advogados
Partners Luiz Fernando Paiva, Henrique Lang, Daniela Anversa Sampaio Doria, Ricardo Becker and
associates Giuliano Colombo, Flavio Veitzman, André Marques, Henrique Vieira, Joana Bontempo,
Fernanda Gatti
Gasparini, De Cresci e Nogueira de Lima
Partner Pedro Paulo Gasparini and associates Glauco Alves Martins, Mario Elias Junior and Liv Machado
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Counsel to the ad hoc bank lenders committee
Pinheiro Guimaraes - Advogados
Partner Eduardo Augusto Mattar and associate Laura Massetto Meyer
Counsel to Citibank
Sergio Bermudes Advogados
Partner Ricardo Tepedino and associate Aluisio Berezowski
Counsel to JPMorgan Chase Bank
Felsberg, Pedretti, Mannrich e Aidar Advogados
Partners Thomas Felsberg e Marcelo Cosac and associate Bruno Kurzweil de Oliveira
Counsel to Banco Santander
TozziniFreire Advogados
Partner Fabio Rosas and associate Mariana Rocha Calejon
Counsel to Banco Votorantim and Lehman Brothers
Demarest e Almeida Advogados
Partners António Manuel França Aires and Celso Xavier and associates Candice Buckley Bittencourt Silva,
Paulo Magalhães Nasser, Lucas Tavares Bueno
Counsel to the bondholders
Machado, Meyer, Sendacz e Opice Advogados
Partner Domingos Fernando Refinetti and associates Renata Oliveira and Mayra Simioni Aparecido
Counsel in the US court filing
Counsel to Independência
Davis Polk & Wardwell
Partner Maurice Blanco
Wollmuth Maher & Deutsch LLP
Partner James N Lawlor and associate George Benaur
Counsel to the ad hoc bank lenders
Cleary Gottlieb Steen & Hamilton LLP
Partners Richard J Cooper and Francesca L Odell and associate Carla Passos
Counsel to the bondholders
Bingham McCutchen LLP
Partner Timothy B DeSieno and associate Katherine Dobson