Brazil: Court suspends sale of Eike Batista’s assets to pay off bankruptcy creditors

The second instance of the Court of Appeals of the State of Minas Gerais (TJ-MG) suspended the sale of the equity debentures issued by Anglo American belonging to the bankrupt estate of MMX, the mining company owned by businessman Eike Batista.

Included in the bankruptcy estate last year, the papers are seen as the last valuable asset of the former billionaire and his companies, able to face their debts.

The sale of debentures issued by Anglo American was being disputed in a duel of giants between XP (XPBR31) and BTG Pactual (BPAC11).

The first to make an offer was BTG, with a minimum value of R$360 million (US$70.7 million). The receivership administrator accepted the proposal. Then, in partnership with Banco Modal, XP entered the game offering R$390 million for the debt securities assets.

Before that, the expectation of selling the papers, which initially would be done via auction, was much higher: initially, the expected collection was R$1.8 billion.

However, three auctions were held without a firm proposal, which led to the direct sale of Anglo American’s debt papers.

Therefore, on Monday last week, judge Claudia Helena Batista, head of the 1st Business Court of Belo Horizonte of the TJ-MG, authorized the reopening of the sale process, informing that the trustee was authorized to seek a “stalking horse” proposal at a minimum price of R$360 million. A proposal from BTG was even accepted.

However, Eike’s lawyers appealed the decisions of the judge and the trustee.

First, they filed a motion for clarification, asking the judge to clarify the deadlines of the direct sale process and the minimum value established.

Then, they appealed to the second instance with a writ of mandamus.

On Saturday, 10, judge Newton Teixeira Carvalho, from TJ-MG, granted an injunction in favor of the injunction, suspending the direct sale process, according to a source that requested anonymity.

In the injunction, the judge decided that the process would be suspended until the judge considered the statement motions filed by Eike’s defense.

On Friday, the 9th, Eike’s lawyers had already criticized the decisions of the judge and the trustee.

The businessman’s defense considered the minimum price of R$360 million an “unreasonable depreciation”, the deadlines were too accelerated, and the process as a whole lacked transparency.

With information from InfoMoney