A leading U.S. subsidiary of Abengoa SA received U.S. court approval to exit its chapter 11 bankruptcy, according to court records filed yesterday, putting the Spanish renewable energy group closer to achieving a global debt-cutting plan, Reuters reported. Abeinsa Holding Inc. was one of dozens of U.S. Abengoa subsidiaries that filed for U.S. bankruptcy protection while the Seville-based parent worked out a high-stakes plan to cut $10 billion of debt and avoid its own bankruptcy in Spain. Under Abengoa's master restructuring agreement, big bank lenders such as Santander will take equity in exchange for debt in the family-founded engineering company that invested heavily to finance a quick expansion in global renewable energy. As part of the U.S. reorganization, Abengoa will retain its control of the U.S. businesses, which range from engineering and construction firms to biofuel and solar energy plants, thanks to a $23 million cash payment by its new bank owners. Abengoa will also put funds into a litigation trust to resolve potential lawsuits and a separate reserve pool for potential insurer claims. Read more.
To read more about litigation or liquidation trusts in bankruptcy, be sure to pick up a copy of ABI’s A Practitioner's Guide to Liquidation and Litigation Trusts.
