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Some New York lawmakers are planning legislation designed to blunt hedge funds’ ability to resist sovereign-debt restructurings, while easing financial settlements for government borrowers in distress, WSJ Pro Bankruptcy reported. New York state Sen. Gustavo Rivera and Assemblywoman Maritza Davila, both Democrats, plan to introduce legislation as soon as this week to allow a supermajority of a nation’s creditors to amend or restructure its debt contracts and bind any dissenters that could otherwise hold out. Many sovereign bonds in Latin America, Africa, and other emerging markets contain collective-action clauses that require all creditors to honor agreements that a majority of them make with the borrower. But others lack any such mechanism, leaving no ready way for settlements made with majority support to become binding on all members of a creditor class. This means that financial investors can buy distressed sovereign debt at a discount, then refuse to accept a restructuring negotiated by other creditors, push for a higher recovery and possibly litigate for full repayment. A small number of determined bondholders led by Paul Singer’s Elliott Management Corp. refused to go along with other investors when Argentina restructured its debts after a 2001 default. These holdouts later sued Argentina in the U.S. and won court rulings blocking payments to other creditors and locking Argentina out of credit markets. In 2016 the country settled the dispute at significant cost, handing huge profits to Elliott and the other holdouts.

Seadrill Ltd, the rig operator controlled by billionaire John Fredriksen, filed for bankruptcy protection for its Asian units after the economic downturn triggered by the coronavirus pandemic worsened a crisis in offshore oil drilling, Bloomberg News reported. The filing in U.S. Bankruptcy Court in the Southern District of Texas is the second within four years by the driller that was once the industry’s largest by market value. The filing covers Seadrill GCC Operations, Asia Offshore Drilling Ltd., Asia Offshore Rig 1 Ltd., Asia Offshore Rig 2 Ltd. and Asia Offshore Rig 3 Ltd., the company said in a statement early Monday. On Feb. 3, the company said that it obtained a new forbearance agreement from the majority of its senior secured lenders, which gave it time until mid-February to come up with a plan to shore up its finances. Nine of the group’s 12 senior secured credit facility agreements have now been terminated. Norwegian-born shipping tycoon Fredriksen founded Seadrill in 2005 and turned it into the crown jewel of his business empire. But the collapse of crude prices in 2014 forced the company to shrink its operations as oil companies slashed spending on rigs. Seadrill completed an overhaul of its finances in July 2018 but left bankruptcy protection with bank debt of almost $6 billion. The drilling market recovered at a slower pace than the company expected and Seadrill engaged in talks with creditors again last year.

The 28 Olympic sports federations have taken a big financial hit due to the postponement of the Tokyo Olympics by a year, but even if the Games were cancelled they would not be at risk of bankruptcy, the executive director of the international federations’ association said, Reuters reported. The 2020 Games have been rescheduled for July after being put off due to the coronavirus outbreak, though there remains a risk they could be cancelled if the pandemic worsens. “We are all committed to delivering the Olympic Games this year,” Andrew Ryan, Executive Director of the Association of summer Olympic international federations (ASOIF), told Reuters. “But if the very worst comes to the worst of course federations would suffer. Some budgets would have to go. But by and large federations would not declare themselves bankrupt.” All Olympic federations receive a chunk of cash after each Games, based on the size and popularity of their sport. The funding model used to determine their share of the revenues delivered by the International Olympic Committee divides the sports into five groups. Top sports such as athletics, gymnastics and swimming receive about $40 million in group A, while smaller sports such as modern pentathlon and new Olympic sports — rugby and golf — end up with about $14 million in group E. That cash injection has now been delayed by a year.

Mexican pilots have rejected a cost-saving plan put forward by their own trade union amid talks aimed at agreeing how to restructure airline Grupo Aeromexico, the ASPA union said on Thursday, Reuters reported. Battered by the coronavirus pandemic, Aeromexico filed for chapter 11 protection in a U.S. court in June, and is trying to secure a second tranche of financing. In a statement, the ASPA said the majority of its pilots had in a vote rejected the plan put forward by the union as an alternative to Aeromexico’s own proposal, but that it would keep exploring other options to aid restructuring efforts. The airline earlier this year had up to $1 billion in debtor-in-possession (DIP) financing approved, and received an initial $100 million payment in September.

With mediation efforts ongoing, China Fishery Group (CFG) trustee William Brandt believes that the Peruvian fishmeal and fish oil maker will be able to achieve a "value-maximizing exit" from bankruptcy by the end of 2021, Undercurrent News reported. Brandt, who was appointed in 2016 by a New York judge to oversee CFG amid the $1.5 billion bankruptcy filing of its Hong Kong-based parent company Pacific Andes International Holdings (PAIH), said earlier this month that talks to resolve thorny issue holding up a sale of CFG are showing promise but will require more time to conclude. In the meantime, CFG has used up all but $5.5 million of a $45m loan it took from the company's own resources to pay the administrative costs of the bankruptcy proceeding. Brandt has asked Bankruptcy Judge James Garrity to approve increasing CFG's potential borrowing ceiling to $60 million.

Grupo Aeromexico has wound up discussions with two labor unions but remains in talks with two more, it said yesterday in an update on negotiations that are a requirement for the airline to receive a second tranche of bankruptcy financing, Reuters reported. Aeromexico filed for chapter 11 protection in a U.S. court in June, after the coronavirus pandemic slammed the global travel industry. The carrier was approved for up to $1 billion in debtor-in-possession (DIP) financing, and received an initial $100 million payment in September. Aeromexico said it had wrapped up negotiations with the STIA and Independencia unions, which represent airline industry workers, while it remains in talks with the ASSA and ASPA unions, which represent flight crews and pilots respectively. It did not detail terms of the completed agreements. The airline is required to reach agreements with all four unions to access a second tranche of DIP funding. The company in November requested permission from a U.S. bankruptcy court to dismiss 1,830 employees, including 855 unionized workers.