According to the U.S. Bankruptcy Court docket, Sao Paulo, Brazil-based Aralco S/A Industria e Comercio and eight affiliated Debtors filed for Chapter 15 protection in the Southern District of New York, lead case number 15-10419. The Company, which produces low cost sugar and ethanol, is represented by John K. Cunningham of White & Case.
According to documents filed with the Court, “Despite the Debtors’ prominent position in Brazil’s sugar and ethanol market, adverse conditions beyond their control have recently impaired their financial health. The Debtors’ business has suffered from the low productivity of recent harvests due to a persistent drought in the Sao Paulo region and the lack of sufficient investments. The Debtors have also been impacted by pricing instabilities, which have been caused primarily by the Brazilian government’s actions to control inflation in Brazil by artificially depressing fuel prices. Finally, the Debtors were severely affected by the Brazilian currency rate devaluation, which increased its relative indebtedness substantially.”
On February 28, 2014, the Debtors filed voluntary bankruptcy petitions in the Brazilian Bankruptcy Court, thus commencing the Brazilian Bankruptcy Proceedings. The Brazilian Bankruptcy Court issued a decision approving the commencement of the joint reorganization proceeding on May 9, 2014. On January 21, 2015, the Brazilian Bankruptcy Court entered an order approving the Brazilian Reorganization Plan, which contemplates the filing of the U.S. Bankruptcy Court Chapter 15 cases. Aralco S/A Industria e Comercio’s Chapter 15 petition indicates assets greater than $500 million. Learn more about this international bankruptcy filing.