Argentine court provisionally suspends bankruptcy of Argentina’s postal service company

RIO DE JANEIRO, BRAZIL – The court that had declared the bankruptcy of Correo Argentino SA, belonging to the family of ex-Argentine president Mauricio Macri (2015-2019), decided to provisionally suspend proceedings on Wednesday, after the company appealed the measure.

The ruling was issued by Commercial Court 6, headed by Judge Marta Cirulli who granted the appeal filed by Correo Argentino SA and and granted “suspensive force” of all proceedings arising from the bankruptcy.

In the ruling Cirulli stated that she was “forced” to “comply” with a previous decision of the National Court of Appeals in Commercial Matters. The bankruptcy decision is now in the hands of the superior court.

BANKRUPTCY DECLARATION

Cirulli had declared the bankruptcy of Correo Argentino SA on July 5, 2001, after the company’s failed reorganization proceedings opened in September 2001, and of terminal failure of attempts at salvage initiated in August 2020.

Within such proceedings, Correo Argentino SA made several payment proposals to its creditors, but the national government rejected all of them.

The company Sociedad Macri (Socma), part of the Macri family’s group, was granted the concession of the state postal service in 1997, during the government of Carlos Menem (1989-1999), but in 1999 it stopped paying the established royalty to the State, thereby incurring a debt.

In 2003, the government of Néstor Kirchner (2003-2007) rescinded the concession contract with the Macri Group and in 2004 ordered the service to once again become state-owned, without calling for a new bidding process.

In June 2016, during Macri’s administration, Socma agreed to pay the debt to the State in several installments until 2033 and with an interest rate much lower than inflation in Argentina, but the agreement was challenged by Attorney General Gabriela Boquín, before the National Chamber of Appeals in Commercial Matters, for considering it highly detrimental to the State.

According to local media, in its last offer Correo Argentino has agreed to pay 1 billion pesos (about US$9.9 million) for a debt that, according to the State and the Public Prosecutor’s Office estimates, totals about 5 billion pesos.

APPEAL

Correo Argentino SA lodged a motion “of appeal and nullity” for the July 5 bankruptcy ruling, arguing that “the bankruptcy ruling exhibits insurmountable shortcomings” and therefore “the full review that such decision warrants” is “undeniable”.

According to the appeal, Correo Argentino’s payment proposal applies to the Argentine state and to the unsecured debt holders, and recalls that “the required majorities are comfortably met” and “there was not a single challenge” from unsecured debt holders, while “the payment of 100% of the loan” plus interest was offered to the Argentine State.

“The National State’s representative, a few hours after the bankruptcy ruling was issued, stated before the media that the real purpose of its position in the proceeding has been (and is) to pursue an ‘extension of bankruptcy’ to shareholders. Demonstrating a clear disinterest in receiving the credit from the insolvent company for extra-bankruptcy purposes,” the appeal stated, referring to Treasury Attorney Carlos Zannini.

In anticipation of the bankruptcy ruling, Macri had published a message on Facebook stating that the government of Alberto Fernández “seeks revenge” and “targets” his children through the alleged manipulation of court proceedings in the case of Correo Argentino SA.