Magyar Telecom Files for Chapter 15 Protection in U.S.
Magyar Telecom BV, the owner of a Hungarian telecommunications company, filed for Chapter 15 bankruptcy protection in the U.S. while it seeks to reorganize in the U.K.
The company, incorporated in the Netherlands, listed debt of less than $500 million and assets of less than $50,000 in a filing today in U.S. Bankruptcy Court in Manhattan. Chapter 15 protects foreign companies from U.S. lawsuits and creditor claims while they reorganize abroad.
Magyar is asking the U.S. court to recognize the proceeding pending before the Chancery Division of the High Court of Justice of England and Wales as its “foreign main proceeding,” according to court papers.
The company failed to make an interest payment due June 15 on 350 million euros ($481 million) in 9.5 percent senior secured notes due in 2016. Magyar won permission from the U.K. court to hold a Nov. 27 meeting of creditors to consider a restructuring plan, according to an Oct. 28 statement.
Magyar owns Invitel Tavkozlesi Zrt., which as of June 30 had about 20,000 corporate customers and provided residential customers in Hungary with about 367,000 telephone lines, about 217,000 Internet packages and about 135,000 cable-television packages, according to court papers.
Magyar said its parent, holding company Hungarian Telecom Cooperatief UA, is controlled by Hungarian Telecom LP.
The case is In re Magyar Telecom BV, 13-bk-13508, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Dawn McCarty in Wilmington, Delaware, at firstname.lastname@example.org