Aurelius Can’t ‘Weaponize’ Law in Global Debt Dispute, Judge Says
- New York ruling opens way in $19 billion Brazil reorganization
- Hedge fund’s argument for Dutch jurisdiction in Oi is rejected
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Aurelius Capital Management’s bid to “weaponize” bankruptcy law in the restructuring of Brazilian telecom company Oi SA has been denied in a U.S. court opinion that offers a rare critique of the hedge fund’s investment strategy.
Aurelius, which specializes in distressed debt, had fought in Dutch and New York courts for an Oi unit to reorganize under Netherlands law. A ruling in Manhattan bankruptcy court Monday denied that bid, clearing what has been a major roadblock for the $19 billion reorganization. The court also laid out how bondholders should behave in international restructuring cases, saying Aurelius’s tactics clashed with the very aims of insolvency law.