Former billionaire Eike Batista hired U.S. law firm Quinn Emanuel Urquhart & Sullivan LLP to represent him as his oil company considers filing for bankruptcy protection, two people familiar with the matter said.
Quinn Emanuel was hired to work on restructuring and potential litigation matters in the U.S. for Batista, said the people, who asked not to be named because they weren’t authorized to speak publicly.
OGX Petroleo & Gas Participacoes SA (OGXP3) is considering filing for bankruptcy protection by the end of this month, two people with direct knowledge of the matter said last week. The filing would be done in Rio de Janeiro where OGX is based, said the people, asking not to be identified as discussions are private. While Batista is negotiating with creditors to avoid the same process for shipbuilder OSX Brasil SA (OSXB3), the most likely outcome is that both companies will seek legal protection, they said.
The company, the centerpiece of Batista’s commodities group, missed a $45 million Oct. 1 bond payment that puts Batista on the brink of Latin America’s biggest corporate default after oil deposits he valued at $1 trillion turned out to be commercial failures.
A representative for EBX, Batista’s holding company, didn’t immediately respond to phone and e-mail messages seeking comment on Quinn Emmanuel’s hiring today after regular business hours in Rio de Janeiro.
Companies based outside the U.S. can file for court protection in the U.S. under Chapter 15 of U.S. bankruptcy law. Companies use Chapter 15 to protect their U.S. assets while they reorganize operations under the jurisdiction of a foreign bankruptcy court.S
In U.S. bankruptcies, the owner of a company sometimes hires lawyers who are separate from the company’s attorneys. When the Los Angeles Dodgers filed for bankruptcy, the owner at the time, real estate developer Frank McCourt, hired his own lawyers who represented his interests in negotiating the $2 billion sale of the Major League Baseball team. A different group of lawyers represented the team itself.
Quinn Emmanuel specializes in corporate litigation. The firm’s bankruptcy lawyers have worked on litigation tied to the bankruptcies of energy trader Enron Corp., futures trader Refco Inc. and oil-trader SemGroup LP, according to the firm’s website.