Lupatech, Brazilian Valve Maker, Seeks U.S. Protection

Lupatech SA, a bankrupt Brazilian industrial-valve maker, sought court protection for its U.S. assets, citing as much as $1 billion in debt.

The Caxias do Sul-based company listed more than $100 million in assets in a Chapter 15 filing yesterday in U.S. Bankruptcy Court in Manhattan. Lupatech said in a Feb. 13 statement it had negotiated a recovery plan with about 85 percent of bondholders as part of its reorganization in Brazil.

The bankruptcy stemmed from acquisitions made before the 2008 financial crisis, the global economic slump and “a lack of integration between units with significant synergy potential,” Chief Executive Officer Ricardo Doebeli said in court papers.

Revenue from the valve business fell to a record low in the quarter ended March 31, limiting the company’s access to cash, Lupatech said in its most recent quarterly report. Lupatech also makes anchor ropes for oil platforms and provides services for coating and inspection of pipes.

Among Lupatech’s creditors are holders of $275 million in unsecured bonds issued in 2007 and 2008 and $320 million in convertible debentures issued in 2009, according to court filings.

Chapter 15 allows a foreign company in bankruptcy abroad to halt creditor lawsuits in the U.S.

The case is In re Lupatech SA, 14-bk-11559, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

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