LATAM given five-month extension to file restructuring plan

Judge James L. Garrity of the US Bankruptcy Court for the Southern District of New York has approved LATAM Airlines Group’s request to extend the deadline for the lodging of a restructuring plan by a further five months i.e. until June 30, 2021. The Chilean holding filed the motion on January 12, saying that the added time would allow it to devise a plan acceptable to all parties concerned. It also argued that the previous deadline of January 29 “would disrupt the orderly administration of the Chapter 11 Cases and could create a risk that multiple, competing plans of reorganization are presented”. A group of LATAM’s bondholders sought to challenge the motion and asked the court to limit the extension to 120 days instead of the requested 152 days. The bondholders claimed that LATAM had not provided them with full access to its data – a charge the holding denied – although it did not explicitly link its accusations to the period of extension. “Even if the Limited Objection’s recitation of the Debtors’ efforts in response to the Ad Hoc [bondholders] Group’s requests and the discussions that followed were accurate (which they are not), the Limited Objection provides no legal basis to tailor the length of the exclusivity extension based on individual information requests, particularly in light of the Debtors’ substantial showing of cause,” LATAM responded. Subsequently, the bondholders withdrew their objection on January 27, paving the way for the court to approve the extension in a form originally proposed by LATAM during a telephone hearing on the same day. Under the new timeline, LATAM will have until August 23, 2021, to solicit acceptance for its restructuring plan.