LATAM Airlines Group SA has accused a Chilean bank representing a group of unsecured bondholders of spreading inaccurate information about the airline's proposed restructuring ahead of a key vote on the plan, Reuters reported. Attorneys for the airline will appear before U.S. Bankruptcy Judge James Garrity in Manhattan on April 15 to force Banco del Estado de Chile, known as BancoEstado, to turn over information about what LATAM described as an attempt to “obstruct and taint” its ability to reorganize in chapter 11 by seeking rulings from a Chilean court that would interfere with the New York proceeding and swaying creditor votes on the deal. Holders of nearly $500 million in unsecured bonds, for whom BancoEstado serves as trustee, have long opposed the plan, which they say gives them only 19.3% in recoveries, or up to 27.8% if they invest new money. During a hearing before Judge Garrity on Thursday, a lawyer for BancoEstado, Pedro Jimenez of Paul Hastings, called LATAM’s demand for additional information a stunt, saying the airline could have simply asked for the documents. LATAM, one of the leading airlines in South America, was one of three large Latin American carriers that filed for bankruptcy in New York in the spring of 2020 as the COVID-19 pandemic brought global travel to a halt. The other two, Grupo Aeromexico and Avianca, have since emerged from bankruptcy, while LATAM is working to do the same in the coming months.
