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Chile's LATAM Airlines received backing by a majority of its unsecured creditors in its chapter 11 bankruptcy exit plan, the airline said on Friday, Reuters reported. LATAM, which filed for bankruptcy in the United States in 2020 after being hit by the coronavirus-related travel downturn, said around 65% of its low-ranking creditors had backed the plan, which it said was "fair and considered all stakeholders." A committee representing junior creditors filed an objection to the restructuring plan in court Monday, calling it "fundamentally flawed" and alleging it would improperly benefit shareholders such as Delta Airlines at their expense. LATAM Airlines, created in 2012 following the merger of Chile's LAN with Brazilian rival TAM and with operating units in Chile, Brazil, Colombia and Peru, still has to bring dissenting stakeholders on board. The plan, in which LATAM hopes to raise $5.4 billion, has also received objections from a Chilean bank representing local bondholders and the U.S. Department of Justice's bankruptcy watchdog. The airline's lawyers will ask a New York judge to approve its proposal in court May 17.

Sri Lanka remains deep in the throes of a balance of payments crisis that has crippled the country’s ability to import necessities and make payments on its over $30 billion in foreign debts, Sri Lanka’s finance minister said, WSJ Pro Bankruptcy reported. “Right now if you look at our usable liquid reserves, [they] are running next to zero, we just don’t have it,” the South Asian nation’s finance minister, Ali Sabry, said in an interview. Sri Lanka’s foreign-exchange reserves have collapsed since the beginning of 2020 as it lost key sources of foreign currency due to Covid-19, including both tourism and remittances from Sri Lankans living abroad. Low taxes and high public sector expenses have contributed to the drop-off in available reserves, which measured near $8 billion in February 2020. “Basically we collect [foreign exchange] on a daily basis from the banks and then we try to support the imports,” Mr. Sabry added. Sri Lanka has other reserves, such as special reserves at the International Monetary Fund, special foreign-exchange swap lines and bullion, which aren’t necessarily usable to pay for imports on a daily basis. The nation is hoping to raise between $3 billion and $4 billion in external funding, which combined with funds brought in from tourism, exports and worker remittances, can help the nation afford basic imports of medicine, fuel and food, Mr. Sabry said.

Junior creditors of LATAM Airlines Group SA are challenging its proposed reorganization plan, saying it improperly benefits the carrier's existing shareholders, such as Delta Air Lines, at their expense, Reuters reported. Objections were filed on Monday in Manhattan bankruptcy court ahead of a May 17 hearing at which LATAM’s lawyers will ask U.S. Bankruptcy Judge James Garrity to approve the proposal. The airline is seeking to raise $5.4 billion through its plan to exit chapter 11, which it filed two years ago as world travel halted amid the COVID-19 pandemic. If approved, the plan would put a group of creditors including Sixth Street Partners in control of the company. The committee representing unsecured creditors in the case has long opposed the airline’s restructuring strategy and has frequently urged it to consider alternative sources of financing. In an objection filed on Monday, the committee accused LATAM of conducting “a fundamentally flawed process” that violates bankruptcy law by elevating the rights of shareholders. It argued that the plan offers shareholders, including Delta and Qatar Airways, overly beneficial treatment in the form of discounted equity options and an "outsized role" in LATAM's corporate governance.

Grand Slam champion Boris Becker has been jailed for two and a half years after hiding assets and debts worth more than £2.5 million after being declared bankrupt, the Evening Standard reported. The three-time Wimbledon winner deliberately transferred money to family and associates when he ran aground financially in June 2017, successfully keeping £390,000 (€426,930) and the proceeds of a bank loan worth £1.1 million from his creditors. Becker, the former World Number One, also failed to declare his ownership of a £1 million German property and £75,000 in shares he held in a tech firm. The tennis great was made bankrupt after his £38 million sporting fortune was swallowed up by an expensive divorce, child maintenance, and the cost of continuing his luxury lifestyle.

xSri Lanka said it would suspend foreign debt repayments, as the country suffering from double-digit inflation and daily power outages seeks to conserve its dwindling foreign reserves for essential food and fuel imports, WSJ Pro Bankruptcy reported. On Tuesday, Sri Lanka’s finance ministry said a comprehensive restructuring of its outstanding foreign-denominated debt was required and that the government had approached the International Monetary Fund for emergency financial assistance. It said the coronavirus pandemic and the war in Ukraine — which have hurt tourism revenue and driven up commodity prices — had eroded the country’s finances to the point it could no longer pay its debts. Sri Lanka’s financial problems had taken root earlier, economists say, stemming from an accumulation of debt on infrastructure spending and sweeping tax cuts that decimated government revenue. They said the unilateral suspension of debt repayments, which amounted to an effective default, was another reflection of Sri Lanka’s dire financial state. “It is purely just a final recognition of how close we are to the brink,” said Anushka Wijesinha, an economist at the Centre for a Smart Future, a Colombo-based think tank. All outstanding payments to bondholders, bilateral creditors and institutional lenders will be suspended until they are restructured, the finance ministry said, with creditors able to capitalize interest payments or opt for repayment in Sri Lankan rupees. Currency swap lines from foreign countries, which have provided an important lifeline to the country during the continuing financial crisis, won’t be affected by the suspension, the finance ministry said.

Exiled Chinese businessman Guo Wengui is offering to repay the more than $100 million he owes creditors in part by offering up the yacht that drove him to bankruptcy, court papers show, Bloomberg News reported. The businessman’s debt stems from a $30 million loan he got from a fund in 2008, which according to the lender Guo failed to repay. Guo arranged for the yacht to leave U.S. waters sometime after October 2020, putting it out of the reach of debt collectors. That prompted a New York judge to hold the Chinese exile in contempt and levy a fine of $134 million, leading Guo to file for bankruptcy in February just before that payment was due.

State-owned Russian Railways was declared in default of a bond obligation on Monday, setting the stage for credit insurance payouts on a Russian corporate borrower for the first time since the war in Ukraine began as sanctions impede payments to foreign creditors, WSJ Pro Bankruptcy reported. Paying agent UBS AG didn’t receive payment by the end of a grace period last month on a Swiss franc-denominated bond, constituting a failure-to-pay credit event, according to the EMEA Credit Derivatives Determination Committee, a panel of banks and investment firms overseeing credit-default swap contracts. UBS said last month that Russian Railways claimed to have attempted payment on the 250 million Swiss franc bond, equivalent to $268 million, but that no funds were received, due to what the Russian company understands to be “legal and regulatory compliance obligations within the correspondent banking network.” The U.S. and EU have imposed sanctions on Russian Railways that limit it from conducting transactions and obtaining financing. The White House said in February that it was including Russian Railways on a list of the 13 most critical Russian enterprises for sanctions that prevent them from raising money from the U.S. market. Russian companies, as well as the Russian government, have been facing difficulty in servicing their debt, particularly debt owned by foreign investors, following the implementation of sanctions in response to the country’s invasion of Ukraine.

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.

A former Goldman Sachs banker was convicted on Friday of bribery and other corruption charges accusing him of participating in a $4.5 billion scheme to ransack the Malaysian state investment fund known as 1MDB, the Associated Press reported. A jury reached the verdict at the U.S. trial of Roger Ng in federal court in Brooklyn. Jurors had heard nearly two months of evidence about tens of millions of dollars in bribes and kickbacks allegedly orchestrated by Malaysian financier and fugitive socialite Low Taek Jho, better known as Jho Low. Defense attorney Marc Agnifilo told reporters outside court that he was surprised by the verdict because “the evidence wasn’t reliable,” and that he was considering an appeal. The embezzlement bankrolled lavish spending on jewels, art, a superyacht and luxury real estate. The spoils even helped finance wild parties and Hollywood movies, including the 2013 Martin Scorsese film “The Wolf of Wall Street” that starred Leonardo DiCaprio. Ng faces up to 30 years in prison. No sentencing date was set. A former head of investment banking in Malaysia, Ng is the only Goldman banker to stand trial in the 1MDB scandal. The 49-year-old had pleaded not guilty to three counts — conspiring to launder money and violating two anti-bribery laws. Prosecutors alleged that Ng and other Goldman Sachs bankers helped 1MDB raise $6.5 billion through bond sales — only to divert $4.5 billion of it to themselves and their co-conspirators through bribes and kickbacks.