Struggling Brazilian telephone company Oi SA is arguing that its Dutch unit is free to use borrowed funds to lend to the parent company, according to a person with knowledge of the matter.

In a response to a creditor lawsuit, Oi said that individual lenders don’t have the right to question the uses of the money they lent the Dutch unit, Oi Brasil Holdings Cooperatief UA, arguing only the trustee of the notes is eligible to do so, according to the person, who asked not to be identified because the matter is private. A fund affiliated with Aurelius Capital Management LP last month asked a Dutch judge to prevent Oi from borrowing any more money from the subsidiary.

The Aurelius Fund, Capricorn Capital Ltd., argued the Dutch unit had already lent Oi 2.8 billion euros ($3.2 billion) that Oi is unable to repay because of its worsening financial situation. Capricorn said the money mostly came from a loan the Dutch unit borrowed in June 2015 from another Oi subsidiary, Portugal Telecom International Finance, or PTIF. Capricorn owns PTIF bonds with a face value of more than 100 million euros, according to its lawsuit.

Oi countered that the purpose of the unit always was to provide financing to other parts of the business, the person said. Oi also said that both Oi Brasil and PTIF have met their payment obligations, the person said.

Brian Schaffer, a spokesman for Aurelius at Prosek Partners, confirmed the firm received Oi’s response on Friday. A representative for Oi and its subsidiaries declined to comment.

A hearing is scheduled for April 18, said the person.

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