Brazilian conglomerate Grupo OAS asked a U.S. bankruptcy judge
to help protect its assets from bondholders attempting to interfere
with its restructuring efforts abroad.
OAS filed for chapter 15--the section of the bankruptcy code
that deals with international insolvencies--at the U.S. Bankruptcy
Court in Manhattan on Wednesday, amid a corruption investigation
that has engulfed some of Brazil's largest construction firms,
court papers show.
If its bankruptcy filing is recognized by Judge Stuart M.
Bernstein, OAS will receive the benefits of U.S. bankruptcy law,
including the so-called automatic stay that halts lawsuits and
prevents creditors from seizing assets.
Prosecutors allege OAS has been involved in the corruption
scandal at Brazil's state-controlled oil company Petroleo
Brasileiro SA, or Petrobras. Together with other high-ranking
executives for some of Brazil's largest construction firms, OAS
executives have been charged by prosecutors with money laundering,
corruption and criminal conspiracy in the alleged kickback and
bribe scandal at Petrobras.
"Despite the OAS Group's prominent position in Brazil's
construction and engineering market, ripple effects from the
Petrobras investigation and adverse economic conditions have
impaired its financial position," a lawyer for OAS said in court
papers filed Wednesday.
OAS has denied that it was involved in the alleged
corruption.
OAS filed for Brazil's equivalent of chapter 11 bankruptcy
protection in a São Paulo state court last month. The company has
said it plans to sell its stakes in a shipbuilder, and in oil and
gas, defense and environmental units, as part of its
restructuring.
OAS is one of the largest and most experienced infrastructure
companies in Brazil, building highways, hospitals, water and sewage
systems and affordable housing, the company said in court
papers.
The company holds about 9.2 billion Brazilian reais, or about $3
billion, in mostly unsecured debt. That includes $1.78 billion in
U.S.-dollar denominated notes, the company said.
Luciana Magalhaes contributed to this article.
Write to Tom Corrigan at tom.corrigan@wsj.com
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