Brazilian mining group seeks recognition in Miami

By Benjamin Clarke

The foreign representative of a Brazilian limestone mining group has applied for Chapter 15 recognition of its liquidation in Miami, after finding it had entered several “questionable” transactions and agreements.

Brazilian lawyer Reinaldo Camargo do Nascimento, the foreign representative of Brasagro Fertilizantes Minerais and Petrocal Industria e Comercio De Cal, filed the petition in the US Bankruptcy Court for the Southern District on 15 October, with counsel from Gregory Grossman and Bruno de Camargo of Sequor Law.

Camargo, who was appointed judicial administrator of the debtors three years ago, told the US court he needed recognition to investigate the extent of any activities undertaken in the US that might be related to the debtors and their assets.

“Investigations into the debtors have highlighted a number of questionable transactions and agreements,” he revealed in a declaration.

“[I]t appears that after petitioning for judicial reorganisation, the insolvent Brasagro entered into an agreement with its parent company… to pay any bills the parent company was unable to pay up to US$15,000 a month,” he said. “There appears to be no additional considerations for this agreement.”

“It is believed that there are more such agreements and transactions involving the debtors which may lead to information of diversion of assets abroad, particularly with insiders or affiliates,” he added.

Brasagro and Petrocal filed reorganisation proceedings in Belo Horizonte in May 2014. But the proceedings were later moved to Rondonópolis in Mato Grosso, where the companies operate.

The Rondonópolis court appointed Camargo as judicial administrator, and his subsequent report into the companies’ activities prompted the court to find there was no possibility of them successfully reorganising their debts. It converted the proceedings into a liquidation in January 2017.

Camargo said that prior to the bankruptcy order, the companies’ debts totalled about 129 million reais (US$31.2 million), but this number had since increased.

“I intend to investigate the nature and extent of any activities undertaken in the United States that may be related to the debtors and their assets,” he told the court. “[A]s well as any assets in the United States that may have been acquired using funds belonging to or traceable from the debtors.”

He said he has also been given the responsibility of filing proceedings and asserting propriety claims against any third parties in the US that may owe the companies money.

Such actions will give creditors of the companies further recovery opportunities, he said.

Judge Jay Cristol has not yet set a recognition hearing date.

 

In the United States Bankruptcy Court for the Southern District of Florida, Miami Division

In re: Brasagro Fertilizantes Minerais and Petrocal Industria e Comercio De Cal

  • Judge Jay Cristol

Counsel to the foreign representative

  •  Sequor Law

Shareholder Gregory Grossman and attorney Bruno de Camargo in Miami

In the Fourth Civil Court of Mato Grosso, Rondonópolis

In re: Brasagro Fertilizantes Minerais and Petrocal Industria e Comercio De Cal

  •  Judge Renan Calos Leão do Nascimento Pereira

Judicial administrator

Reinaldo Camargo do Nascimento in Mato Grosso

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Brazilian magazine group enters Chapter 15 in Florida

By Declan Bush

The administrator of a bankrupt Brazilian magazine publishing company has filed for Chapter 15 protection to search for assets its old owners may have stashed in the US.

Four entities – Minuano Comunicações e Produções Editorias, Diário de São Paulo Comunicações, Editora Fontana and Cereja Serviços de Midia Digital – filed a slew of documents before the US Bankruptcy Court for the Southern District of Florida dated 25 September.

Arnoldo Lacayo, a partner at Sequor Law specialising in financial fraud and asset recovery cases, is the debtors’ counsel in Miami. In a declaration to the US court filed on 1 October, Brazilian administrator Joice Ruiz Bernier, of São Paulo firm AJ Ruiz Consultaria Empresarial, said the Minuano companies were part of a publishing group owned by Spanish businessman Mario Florencio Cuesta and his ex-wife Giane Viana Cuesta. The Cuestas divorced in 2012.

Minuano was a big magazine publisher started in Brazil in 2004, which grew to include assets including longstanding newspaper Diario de São Paulo.

The first of Minuano companies went bankrupt in São Paulo in April 2017 after a creditors’ petition seven months before, the court was told. The other debtors were added to the Brazilian proceeding in January 2018 when it emerged they were run out of the same office and had commingled funds.

The debtors appealed the extension of the bankruptcy, but the Brazilian Court of Appeals in São Paulo affirmed it in June 2018.

As further entities and individuals were brought into the bankruptcy proceedings, the court made an order freezing the Cuesta’s assets, and those of five others and four of their companies on 8 October 2018.

By that stage, Bernier had already seized assets including a helicopter owned by the newspaper for the bankruptcy estate.

Bernier said her investigations had revealed the Cuestas were the debtors’ ultimate beneficial owners and had instructed the group’s directors on how to proceed, despite not being identified as shareholders.

“The Cuestas financed a lavish lifestyle through the use of the debtors’ assets, monetary and physical,” Bernier has told the US court in her declaration. “Investigations into the Debtors suggest that assets were diverted overseas to banks in Miami and New York.”

She says she intends to investigate the nature and extent of any of the debtors’ activities and assets in the US, as well as any assets bought with their funds.

A hearing has been set for 13 November.

In the US Bankruptcy Court for the Southern District of Florida

Minuano Comunicações e Produções Editorias, Diário de São Paulo Comunicações, Editora Fontana and Cereja Serviços de Midia Digital, case 19-23184-LMI

  • Judge Laurel Isicoff

Counsel to Minuano

In the Second Bankruptcy Court for the State of São Paulo

  • Judge Marcelo Barbosa Sacramone

Administrator to Minuano

  • AJ Ruiz Consultoria Empresarial*

Partner Joice Ruiz Bernier in São Paulo

*Formerly Satiro e Ruiz Advogados Associados

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