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ABN Amro Queries Cocoa Supplier Over ‘Missing’ $313 Million

Updated on
  • ABN Amro seeks subpoenas to review cocoa supplier’s books
  • Transmar opposes request, says it’s cooperated with bank

ABN Amro wants to know what became of more than $300 million which it claims was collateral that the bankrupt U.S. unit of cocoa supplier Transmar Group may have moved to a European affiliate. 

The Dutch bank asked a federal judge in Manhattan for permission “to investigate the facts and circumstances surrounding the apparent disappearance of hundreds of millions of dollars in collateral and other property” from the estate of Transmar Commodity Group Ltd., which filed for bankruptcy in New York on the last day of 2016.

ABN Amro, which is an agent for a lender group on the $400 million Transmar Commodity credit facility, said in a Jan. 17 court filing that about $313 million in asset value vanished from the company’s books sometime after the end of October. The bank said some of the assets may have been transferred to Transmar affiliate Euromar Commodities GmbH. 

Euromar, which owns a cocoa-processing factory in Fehrbellin, Germany, began its own insolvency proceedings in the country in early December. The processor was partly felled by the U.K.’s decision to leave the European Union, which weakened the pound and drove up prices for London cocoa futures. 

More: Bankruptcy Filing Deepens Woes for Cocoa Firm Hit by Brexit

ABN Amro said that so far Transmar hasn’t complied with requests for information, and the bank wants the U.S. court’s permission to issue subpoenas so it can examine documents and question company officers about the fate of the assets. Other banks lending to Transmar include Societe Generale SA, BNP Paribas SA, Natixis SA and Macquarie Bank.

Collateral Value

In a separate filing, a lawyer for ABN Amro said urgency was necessary “because of the significant collateral value loss that has occurred in just the past few months, the risk that such losses will continue unabated, and the failure of the debtor and its affiliates and principals to provide most of the basic information in response to the lenders’ and their advisers’ prior requests for information.”

Joseph Schwartz of Riker Danzig Scherer Hyland & Perretti, an attorney for Transmar, fired back Jan. 18. In a letter to U.S. Bankruptcy Judge James Garrity, he called ABN Amro’s request “burdensome” and said the bank “literally seeks to have unreasonably broad truckloads of documentation” in days. The attorney said Transmar has been supplying “a voluminous amount” of information already.

Preventing Transfers

Schwartz said that since mid-December, the lenders have prevented Transmar from making transfers that could jeopardize their collateral. Rather than rush the bank’s request, the lawyer said, the court should schedule a hearing to give all parties time to respond.

ABN Amro’s lawyer, Curtis Mechling of Stroock & Stroock & Lavan, responded with his own letter to the judge Thursday, saying it was necessary to expedite the subpoena request without a hearing “because of the extraordinary and urgent circumstances.”

“Over $300 million of the lenders’ collateral disappeared over the course of six weeks shortly prior to the debtor’s bankruptcy filing,” he wrote. Much of that collateral may have been transferred to Euromar, which could sell its assets in the next two to three months, Mechling said.

Peter G. Johnson, chief executive officer of Transmar, didn’t reply to an e-mail and two phone calls Friday seeking comment on the dispute. As of Monday morning, Garrity hadn’t posted a response to the subpoena or hearing request on the New York court’s electronic docket.

A spokesman for Japanese trader Itochu Corp., which owns a stake of less than 20 percent in Transmar Group, declined to comment. A spokesman at ABN Amro declined to comment.

Transmar Commodity Group sought U.S. bankruptcy court protection from creditors on Dec. 31, saying it owes more than $400 million to banks and other creditors.

The case is In re Transmar Commodity Group Ltd., 1:16-bk-13625, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

— With assistance by Aya Takada

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