A New York bankruptcy judge delivered an unambiguous rebuke of Aurelius Capital Management LP’s litigation strategy in the complex and contentious international restructuring of Brazilian telecom giant Oi SA, WSJ Pro Bankruptcy reported. In a decision handed down on Monday, Judge Sean Lane of the U.S. Bankruptcy Court in New York declined to recognize a chapter 15 U.S. bankruptcy proceeding launched earlier this year by an Oi affiliate based in the Netherlands. The judge said that Aurelius “weaponized” the Dutch affiliate to attack Oi’s broader restructuring goals. “In sum, the strategy pursued by Aurelius in these cases is a troubling one that the court refuses to countenance,” Judge Lane wrote. “Aurelius’ actions also reflect a lack of candor before the court,” he added.
