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

• 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

•  Judge Renan Calos Leão do Nascimento Pereira

Judicial administrator

Reinaldo Camargo do Nascimento in Mato Grosso

To view the original article, click here.