Oil firm OGX Petroleo & Gas Participacoes SA, petroleum, filed for bankruptcy protection in a Brazilian court on Wednesday, October 30th, after the company had difficulties finding and producing oil and natural gas. OGX is owned by former billionaire Eike Batista and a part of his EBX Group conglomerate. The bankruptcy case is anticipated to be one of the largest of its kind in Latin American history. It is also expected to challenge the bankruptcy laws in Brazil, which are only about a decade old.
CRG Partner Christopher K. Kiplok spoke to Law360 (subscription required) and The Deal (subscription required) concerning the bankruptcy. “For that jurisdiction, this is a case of major size,” Chris told Law360. Chris also explained to the publication that size does not necessarily lead to a difficult case, but that any large filing brings with it the potential for uncertainty no matter how well-orchestrated it might be. He told The Deal that OGX’s filing “is not a surprise and that is a good thing in so much as it was not a chaotic filing.” Chris further noted, “The thing to watch now is what litigation stems from this, because the more of that there is the greater the chance of delays to the process.”
“In any big case, there is an air of uncertainty,” Kiplok told Euroweek (subscription required) “And for OGX you have to layer on to the size the fact that the Brazilian bankruptcy regime has been reformed in recent years. Big cases with big complicated issues don’t have much of a playbook to follow, and with a new regime less so.” He added, “In my experience, the best bankruptcies are collaborative processes. In the absence of any consensus, there is a real risk of value erosion.”
Chris was also quoted in Latin Lawyer, among other business and legal publications.