US Creditors to Abide by Stay

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) — Creditors in the U.S. will have to recognize Abengoa SA’s standstill agreement struck in Spain with creditors and bondholders giving the company until Oct. 28, 2016, to reorganize its debts, according to a ruling handed down Wednesday by a judge in the U.S. Bankruptcy Court in Wilmington, Delaware.

The judge approved Abengoa’s motion to file Chapter 15 bankruptcy, which is a unique section of the U.S. bankruptcy code created in 2005. Chapter 15 allows for the recognition by U.S. courts of bankruptcy filed in foreign countries. In this case the Delaware court ruled the ongoing proceedings in Spain are the main proceedings.

Chapter 15 comes with an automatic protection of the parent company’s assets in the U.S. while court proceedings are ongoing elsewhere.

"No person or entity may commence or continue any legal proceeding or action against the foreign debtors, their assets located in the United States, or the proceeds thereof," according to the ruling by the Delaware court, "enforce any judicial, quasi-judicial, administrative or regulatory judgment, assessment or order or arbitration award against the foreign debtors.

"The foreign debtors are entrusted with the right to operate the foreign debtors’ business, exercise the rights and power of a trustee, and they are entitled to administer and realize all or part of the foreign debtors’ assets within the territorial jurisdiction of the United States."

A number of insurance companies in the U.S. that are Abengoa creditors had objected to Chapter 15. Some creditors have objected because Chapter 15 gives U.S. courts limited power to control Abengoa assets.

Chapter 11 proceedings are underway in the U.S. and a number of grain companies are listed as creditors to ethanol plants in Nebraska. Abengoa also has ethanol plants in Kansas, Illinois and New Mexico. Chapter 15 could make it more difficult for creditors to be paid until legal proceedings in Spain are resolved.

By DTN’s count, there are more than 225 agriculture businesses, farmers and ethanol companies listed as creditors by Abengoa in its Chapter 11 filing in the U.S. Bankruptcy Court for the Eastern District of Missouri in St. Louis.

A number of farmer cooperatives and other grain providers to the company’s ethanol plants in Nebraska attempted in March to force Abengoa into Chapter 7 liquidation after reporting $10 million in losses for unpaid grain delivered to the company’s plants in York and Ravenna.

Creditors who were not paid for grain deliveries made to plants in York and Ravenna include Gavilon Grain LLC; Farmers Cooperative Association in Ravenna; Farmers Cooperative in Dorchester, Nebraska; the Anderson’s Inc. and Central Valley Ag Cooperative.

All told, the company reports more than $16 billion of debt.

Abengoa announced in the past several months it intends to sell its ethanol assets in the U.S. and other countries.

For more information on Chapter 15, see http://bit.ly/…

Todd Neeley can be reached at Todd.Neeley@DTN.com

Follow him on Twitter @ToddNeeleyDTN

(CZ/ES)