Latin American airlines file for Chapter 11 in response to Covid-19: forum shopping or sound strategy?

Latin American airlines file for Chapter 11 in response to Covid-19: forum shopping or sound strategy?

A webinar presented by the IBA Insolvency Section

8 SEP 2020 1400 – 1500 BST

While the Covid-19 pandemic has negatively affected most industries, the impact on the transport sector has been drastic and created a new level of uncertainty concerning the future of the industry. International organisations have predicted that the coronavirus outbreak would wipe out two-fifths of passenger traffic and halve airports revenues in 2020.

Latin American airlines and airport concessionaries companies have quickly reacted to the situation. While some companies launched bond exchanges with the goal of extending the maturity terms of their bonds, others adopted a more extreme strategy by filing for reorganisation proceedings.

Three of the largest Latin American regional airline companies (Avianca, LATAM and Aero México) decided to pursue reorganisation proceedings before the New York courts by filing for Chapter 11; not only for their United States entities, but also of their subsidiaries, including Colombian, Chilean and Mexico entities.

Filing for Chapter 11 in New York, instead of filing in their home jurisdictions, raises several questions and challenges that we will discuss in this webinar.

Topics will include:

  • What advantages does filing for Chapter 11 before the New York courts offer to Latin American companies?
  • What disadvantages do Latin American companies find in their own home jurisdictions?
  • Ability of the US court to bind foreign creditors
  • Would local courts recognise Chapter 11 proceedings in their home jurisdictions?
  • The status of United Nations Commission on International Trade Law Model on cross-border insolvency in Latin America
  • Would this new wave of cross-border insolvency in Latin America lead to a developed practice of protocols and court-communication?
  • Lessons from UE – United Kingdom lack of jurisdiction and forum shopping cases

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Timothy Graulich
Davis Polk, New York; Transportation and Infrastructure Industry Officer, IBA Insolvency Section

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Lisa Schweitzer
Cleary Gottlieb & Steen & Hamilton, New York

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Ricardo Reveco
Carey, Santiago; Industry Officer - Finance and Insurance, IBA Insolvency Section

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Otto Eduardo Fonseca Lobo
Lobo & Martin Advogados, São Paulo; Mid-Year Meetings Conference Officer, IBA Insolvency Section

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Alejandro Sainz
Cervantes Sainz, Mexico City

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