In this article, first published in INSOL World - Third Quarter 2022, Neil Lupton, Siobhan Sheridan and Chaowei Fan explore LATAM Airlines' Chapter 11 proceedings.
In 2020, in response to the devastating financial effects of the COVID-19 pandemic, Latin America’s leading airline group, LATAM Airlines Group S.A. and various of its affiliates (including LATAM Finance Limited, Peuco Finance Limited and Piquero Leasing Limited, incorporated in the Cayman Islands (the “LATAM CayCos”)) filed Chapter 11 cases in the United States (the “LATAM Debtors”), and in respect of the LATAM CayCos, ‘light touch’ provisional liquidation proceedings in the Cayman Islands. More than two years later, as LATAM is poised to emerge from bankruptcy, this article looks back at some of the unique challenges and opportunities that have arisen as a result of these proceedings, and the valuable lessons the case offers to debtors and creditors seeking successfully to restructure cross-border operations while complying with competing corporate and regulatory regimes.
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This article was written in conjunction with Lisa Schweitzer and Alexandra Lotty of Cleary Gottlieb Steen & Hamilton LLP, USA.