Philippine Airlines (PAL) successfully restructured crippling debts and exited a U.S. chapter 11 bankruptcy process in just four months with a steady management team at the helm and the full financial backing of owner, billionaire Lucio Tan, the Philippine Daily Inquirer reported. The flag carrier was also aided by a small army of international legal and financial consultants, who earned fees of almost $3 million (P150 million) advising the carrier during the creditor protection plea, a recent court filing showed. The payments include $1.34 million to Debevoise & Plimpton LLP, which rendered legal services and advice on obtaining financing during the bankruptcy plea. Another $640,167 was paid to Seabury Securities LLC and Seabury International Corporate Finance LLC.
Opening statements are expected to take place today in the U.S. corruption trial of a former Goldman Sachs banker charged with helping to launder hundreds of millions of dollars looted from Malaysia's 1MDB sovereign wealth fund, Reuters reported. Roger Ng, Goldman's former head of investment banking in Malaysia, stands accused of conspiring to launder money and to violate an anti-bribery law. He has pleaded not guilty and Ng's lawyer has called him a "fall guy" for one of the biggest financial scandals in Wall Street history. The trial in Brooklyn federal court could last up to six weeks. Prosecutors are likely to argue that Ng helped two co-conspirators — his former boss, Timothy Leissner, and Malaysian intermediary Jho Low — launder funds embezzled from 1MDB and used some of the stolen money to bribe officials in the Southeast Asian country to win business for Goldman. Leissner, a former partner for Goldman Sachs in Asia, in 2018 pleaded guilty to conspiracy to launder money, and conspiracy to violate the Foreign Corrupt Practices Act (FCPA), in part by helping to pay $1.6 billion in bribes. He is expected to testify as a government witness against Ng. Ng's defense is expected to argue that he had no role in the scheme perpetrated by Low and Leissner, and that he even warned Goldman management not to trust Low. Ng's defense lawyer Marc Agnifilo has said Leissner falsely implicated Ng in the scheme in an effort to minimize his punishment. Leissner has not yet been sentenced. The scandal stems from some $6.5 billion in bonds that Goldman helped 1MDB — launched by former Malaysian Prime Minister Najib Razak to spur economic growth — sell from 2009 to 2014. But around $4.5 billion of that money was embezzled, according to U.S. prosecutors. U.S. authorities say Goldman earned $600 million in fees from the deals. The bank in 2020 paid a $2.3 billion fine, returned $600 million in ill-gotten gains and agreed for its Malaysian subsidiary to plead guilty in U.S. court as part of a deal, known as a deferred prosecution agreement (DPA), with the Department of Justice.
Mexican payroll and business lender Credito Real SA B de CV said its planned refinancing of a 170 million Swiss franc bond, worth $184 million, hadn’t materialized, pointing to a possible nonpayment and restructuring ahead for the embattled shadow bank, WSJ Pro Bankruptcy reported. Credito Real has until the end of Wednesday to repay or refinance the outstanding bond, or could be deemed in default. Failure to pay would likely trigger a cross-default on other debt obligations, including the company’s dollar-denominated bonds. The company also said on Wednesday that it had retained law firm DLA Piper and restructuring adviser FTI Consulting. It is working with its financial stakeholders to evaluate strategic alternatives and “resolve its short-term and long-term financing situation,” it said. Bonds for Credito Real have lost almost half their value since late last month over uncertainty on its ability to repay the Swiss bond. The company had been working with Goldman Sachs to help line up secured financing. Last year, it had approached its Swiss investors to refinance the bond, but was rebuffed.
A bankruptcy judge extended Latam Airlines Group SA’s exclusive control over its chapter 11 proceedings until early March despite opposition from certain unsecured creditors who have been sidelined in the Chilean airline’s proposed capital raise, WSJ Pro Bankruptcy reported. Bankruptcy Judge James Garrity of the U.S. Bankruptcy Court in Manhattan yesterday granted a request by Latam to extend its exclusivity, while denying a competing bid by certain unsecured creditors to terminate the company’s exclusive control so that a potential alternative could be put forth. Judge Garrity said that Latam, the largest airline group in Latin America, has formulated its chapter 11 plan in good faith, taking into consideration the company’s complex operations along with sizable assets and liabilities. He said that granting this short extension will allow Latam to continue making progress toward a value-maximizing restructuring and won’t harm stakeholders in the chapter 11 cases, jointly filed by Latam and its affiliates in 2020.
Jury selection is expected to begin on Monday in the U.S. corruption trial of a former Goldman Sachs banker accused of involvement in the looting of billions of dollars from Malaysia's 1MDB sovereign wealth fund, Reuters reported. Roger Ng, Goldman's former head of investment banking in Malaysia, has pleaded not guilty to conspiring to violate an anti-bribery law and launder money in connection with the alleged looting of billions of dollars from the fund. Goldman helped sell $6.5 billion of bonds for 1MDB, a fund former Malaysian Prime Minister Najib Razak launched to spur economic development. Authorities said fund officials and accomplices looted some of the money to spend on luxuries, while Goldman bankers paid more than $1.6 billion in bribes to officials in Malaysia and Abu Dhabi for 1MDB business. Goldman in 2020 agreed to pay $2.9 billion in penalties and have a Malaysian unit admit criminal wrongdoing to settle probes by the U.S. Department of Justice and other authorities into its role in 1MDB. U.S. District Judge Margo Brodie is expected to question prospective jurors about whether they can be fair and impartial. Both prosecutors and defense lawyers have suggested Judge Brodie quiz jurors about any work ties they have to Malaysia or Abu Dhabi, court records show. And Ng's defense lawyers have proposed asking prospective jurors if they had any view about Goldman Sachs, and if that view was "favorable or unfavorable." Opening statements in the trial are scheduled to begin next week in Brooklyn federal court. Ng was arrested in Malaysia in November 2018 and extradited six months later. Tim Leissner, another former Goldman banker, pleaded guilty in 2018 over his role in the scandal. He is scheduled to be sentenced in March.
