/raid1/www/Hosts/bankrupt/TCRLA_Public/230818.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Friday, August 18, 2023, Vol. 24, No. 166
Headlines
B R A Z I L
BANCO DA AMAZONIA: Moody's Assigns First Time Ba2 Deposit Ratings
BANCO DO BRASIL: Raises Bad Loan Outlook
BRAZIL: IDB, BNDES to Invest $900M in Small Business in the Amazon
BRAZIL: Industry Confidence Up due to Selic Interest Rate Cuts
C A Y M A N I S L A N D S
ATOM HOLDINGS: Chapter 15 Case Summary
C H I L E
GUACOLDA ENERGIA: S&P Cuts ICR to 'D' on Completion of Tender Offer
J A M A I C A
NCB FINANCIAL: Gives Insight Into Reasons For Leadership Changes
P A N A M A
ENA NORTE: S&P Affirms 'BB-' Debt Rating, Off Watch Negative
P U E R T O R I C O
UNIVERSAL DOOR: Amends Plan to Include Priority Tax Claims Pay
- - - - -
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B R A Z I L
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BANCO DA AMAZONIA: Moody's Assigns First Time Ba2 Deposit Ratings
-----------------------------------------------------------------
Moody's Investors Service has assigned Ba2 long-term and Not Prime
short-term local and foreign currency deposit ratings to Banco da
Amazonia S.A., as well as Ba2 long-term and Not Prime short-term
counterparty risk ratings (CRR), in local and foreign currency.
Concurrently, Moody's has also assigned baseline credit assessment
(BCA) and adjusted BCA of ba3, as well as counterparty risk
assessments (CR Assessment) of Ba2(cr) and Not Prime(cr), for long-
and short-term, respectively. The outlook on the long-term deposit
ratings is stable.
RATINGS RATIONALE
Banco da Amazonia's ba3 BCA reflects the bank's important regional
franchise and broad footprint in the Amazon region, with operating
as a financial agent and manager of the constitutionally mandated
Fundo Constitutional de Financiamento do Norte (FNO), whose
resources are used to promote economic and social development,
particularly focused on the North states of Brazil. As such, the
bank's ba3 BCA incorporates the recurring fee-income generation
derived from the management of constitutional funds as well as the
bank's adequate liquidity provides by the FNO.
The ba3 BCA also reflects challenges related to asset risk faced by
Banco da Amazonia. The bank has a loan book with operations that
show an intrinsic geographical, as well as sectorial concentration
in agriculture and infrastructure, that accounted for 53% and 22%
of total loans, respectively, in March 2023. In Moody's view, the
large share of loans to the agriculture sector exposes the bank to
above-average physical climate risk. The acceleration of loan
origination between 2019 and 2022 - 53% on a compound annual basis
– also indicates a potential increment of risk taking amid a
challenging operating conditions in Brazil in the period, that
could translate into future pressures to asset quality. At the same
time, Banco da Amazonia's development mandate exposes the bank to
credit risks derived from the guarantees it provides to loans the
bank split the risk with FNO, resulting in a sizable off-balance
sheet credit risk it manages under the constitutional funds. These
guarantees amounted to nearly 39% of the bank total credit risk,
incorporating on- and off-balance sheet risks.
While the level of nonperforming loans as a percentage of total
loans has remained low over the past years, the bank also reports a
track record of a large volume of loan renegotiation, that
accounted for 16.6% of gross loans in March 2023, an intrinsic
characteristic of its operations. These risks are shield by a high
level of reserves for loan losses maintained by Banco da Amazonia
that reached 3.3% of total loans and 244% of problem loans in March
2023.
Profitability is a key credit strength of Banco da Amazonia,
benefiting from an steady stream of fee-based revenue that the bank
receives from the national treasury to manage constitutional funds
and from fees from assuming the credit risk of 3% to 6% of FNO's
operations. Net income to tangible banking assets has averaged 2.6%
for the past three years, above the 1.4% average of rated Brazilian
banks in the same period. However, if off-balance sheet exposures
are added to the asset base the same metric declines to 1.1%.
The ba3 BCA also reflects Moody's assessment of the bank's adequate
capitalization, supported by its strong capital replenishment
capacity. Measured by Moody's ratio of tangible common equity to
risk-weighted assets (TCE/RWA), the bank's capital ratio was 9.5%
in March 2023, at the same level as of year-end 2022, following a
BRL1.0 billion capital injection, and above 5.8% in December 2021.
Because of the bank's strategy to expand the loan book at
double-digit levels in 2023, Moody's expect additional capital
consumption to pressure capital metrics down. On a regulatory
basis, the bank's Common Equity Tier 1 capital ratio was 12.8% in
March 2023, well above the minimum regulatory.
The bank has low reliance on wholesale funding, benefiting from its
access to FNO resources, at roughly 62% of total funding, and an
ample core deposit base that accounted for about 35% in March 2023.
These deposits are supported by a granular distribution network in
the legal Amazon region. Its role as a manager of the FNO also
supports the bank's liquidity profile, which provides recurrent and
sticky funding mix.
As a federal-owned bank, the Ba2 deposit rating acknowledges the
97% ownership and the social development role from the bank, and
providing the bank the status of government-backed institution,
which incorporates one notch of support from its BCA of ba3. The
stable outlook on the long-term deposit ratings of Ba2 reflects
Moody's perspective for the sovereign rating of the Government of
Brazil.
ESG CONSIDERATIONS
The assigned ratings also incorporate Banco de Amazonia's
environmental, social and governance (ESG) considerations, as per
Moody's General Principles for Assessing Environmental, Social and
Governance Risks Methodology. Moody's assessment of Banco de
Amazonia's exposure to governance risks reflects ongoing
improvements to governance structure and controls the bank has
implemented in the past 5 years, which is incorporated in a
Governance Issuer Profile Score (IPS) of G-3. This assessment
considers the bank's concentrated ownership by the federal
government and the potential of political interference in the
management team, as its CEO is appointed by the president of
Brazil. Banco da Amazonia has shown sound risk management despite
some asset risk concentration in the agriculture sector. The
assigned ESG Credit Impact score of CIS-2 indicates the mitigating
rating impact of very high government support over the bank's ESG
risk profile.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Banco da Amazonia's Ba2 deposit ratings are unlikely to be upgraded
because they are already positioned at the same level as Brazil's
Ba2 sovereign rating. Positive pressure on the bank's BCA could
result from bank's continuous expansion without a significant
deterioration on its capital metrics, less-volatile profitability,
and sustainably strong asset-quality metrics.
The bank's ratings could be downgraded if the sovereign rating is
downgraded. Banco da Amazonia's ratings could also be downgraded if
its BCA is lowered because of material deterioration in its asset
risk and profitability, as well as a decline in its capital
ratios.
The principal methodology used in these ratings was Banks
Methodology published in July 2021.
BANCO DO BRASIL: Raises Bad Loan Outlook
----------------------------------------
Peter Frontini at Reuters reports that Brazilian state-controlled
lender Banco do Brasil SA beat second quarter profit expectations
but raised its forecasts for bad loans in 2023 amid an increase in
loan-loss provisions, partly due to bankrupt retailer Americanas.
The bank posted adjusted net profit of 8.78 billion reais ($1.79
billion) for the second quarter, up nearly 12% on the previous
year, and beating the 8.65 billion reais forecast from analysts
polled by Refinitiv, according to Reuters.
In the quarter ended in June, its loan book grew 13.6% from the
previous year to 1.04 trillion reais, the report notes. This
prompted the lender to slightly raise its forecast for loan book
growth to 9%-13% in 2023, from a previous estimate of between
8%-12%, the report relays.
But after reporting 144.3% yearly growth in loan-loss provisions,
the lender also lifted its forecast for the money to be set aside
for bad loans this year to between 23 billion and 27 billion reais,
from 19 billion to 23 billion reais, the report ntoes.
It said a sum of 338.8 million reais ($69.11 million) was set aside
"for a company that has filed for bankruptcy in January this year",
without naming Americanas explicitly, the report discloses.
Such provision represents 70% of its exposure with Americanas, the
bank said, up from 50% at the start of the year, the report
discloses.
Analysts at Citi said in a note that the results, which some feared
would miss expectations, were a "positive outcome," the report
says.
However, they added that "the strong increase in cost-of-risk in
the quarter . . . could raise concerns of continued asset quality
deterioration," the report says.
The company's interest income, a measure of earnings on loans minus
deposit cost, rose 34.2% from a year earlier, to 22.89 billion
reais, also surpassing analysts' expectations of 21.98 billion
reais, the report discloses.
Its delinquency rate, measured by the 90-day loan default ratio,
came in at 2.73%, just slightly above the previous quarter, the
report says.
Return on equity, which measures profitability, landed at about
21.3%, or 0.3 percentage points above the first three months of
2023, the report adds.
As reported in the Troubled Company Reporter-Latin America on Aug.
4, 2023, Fitch Ratings has upgraded the Long-Term (LT) Issuer
Default Ratings (IDRs) of 12 Brazilian financial institutions
(Fis), including that of Banco do Brasil SA, following the upgrade
of Brazil's sovereign LT IDRs to 'BB'/Stable from 'BB-'/Stable on
July 26, 2023, and after the adjustment of Fitch's assessment of
the operating environment (OE) for Brazilian banks to 'bb'/Stable
from 'bb-'/Stable.
Fitch said Banco do Brasil's IDR is driven by its Government
Support Rating (GSR) which is aligned to Brazil's sovereign ratings
and, consequently, the revision of its IDR to 'BB' with a Stable
Outlook and the GSR to 'bb' mirrors the action taken on the LT IDRs
of Brazil.
BRAZIL: IDB, BNDES to Invest $900M in Small Business in the Amazon
------------------------------------------------------------------
The Inter-American Development Bank (IDB), as part of the Amazonia
Forever regional program, and the Brazilian Development Bank
(BNDES), in the context of its continuing support to the Amazon,
climate and alternative sustainable economic activities, signed a
letter of intent to move forward with PRO-AMAZONIA, a program that
will scale up financing for micro, small and medium Enterprises
(MSMEs) and small entrepreneurs in the Legal Amazon in Brazil.
Companies and small entrepreneurs from multiple sectors will
benefit from financing for modernization, expansion, goods and
equipment acquisition, and innovation. The financing will include
incentives to adopt sustainable practices, contributing to creating
jobs and building a balanced and environmentally responsible
economy in the region.
The Amazon region plays a critical role in preserving biodiversity
and in global climate regulation, making it a unique opportunity to
create businesses that reconcile economic development with the
search for sustainable business alternatives.
Fostering MSMEs in the Amazon region helps expand the use of new
and sustainable technologies, boosting the emergence of innovative
value chains and contributing to greater regional economic
dynamism.
MSMEs in Brazil represent 99% of firms and are responsible for 27%
of the gross domestic product (GDP) and 46% of jobs, mostly in the
services sector. However, this business segment usually faces
greater credit constraints than larger firms, and the challenges
are even greater in the Amazon region, where access to logistics
infrastructure, sanitation, education, health, and safety is more
difficult than in other regions of Brazil.
Announced at the Amazon Presidential Summit, the commitment
includes an IDB loan of $750 million, with $150 million from BNDES,
which will be implementing the program through accredited financial
agents. Individual loans must comply with IDB and BNDES
environmental and social safeguards policies.
The PRO-AMAZONIA Program, which is planned to start in 2024, aims
to foster sustainable development in the Amazon region, focusing on
reducing regional inequalities by supporting small businesses and
entrepreneurs.
"The partnership between BNDES and IDB plays an important role on
this Program as it is being developed by long-term partner
institutions with common goals in offering financing options to
improve businesses and sustainable development. PRO-AMAZONIA has
been designed to generate positive impact on both the environment
and local communities, promoting synergy and prosperous future for
the businesses in the region," said BNDES President Aloizio
Mercadante.
"We see this program as a key part of our efforts to help preserve
the Amazon, which include incentives to adopt alternative,
sustainable economic activities. Our Amazonia Forever program is a
holistic effort that will seek to upscale our financing through
novel financial instruments, strengthen the planning and execution
of projects, and create networks to share knowledge and
evidence-based innovations," said IDB President Ilan Goldfajn.
"BNDES, with its expertise and capillarity, is the ideal partner
for this program."
The Legal Amazon is a geographical delimitation comprised of the
states of Acre, Amapa, Amazonas, Maranhao, Mato Grosso, Para,
Rondonia, Roraima and Tocantins. It has an approximate area of 5.1
million sq. km. and is home to 67% of the world's tropical
forests.
Amazonia Forever
Amazonia Forever is a holistic umbrella program that aims to
protect biodiversity and accelerate sustainable development through
three lines of action: expanding funding, boosting knowledge
exchange and facilitating regional coordination among the eight
Amazonian countries.
The program is based on five pillars: (i) combating deforestation
and strengthening environmental control and security in the context
of national governments; (ii) the bioeconomy, promoting alternative
and sustainable economic activities; (iii) people, aiming for
adequate access to quality education, healthcare and employment;
(iv) sustainable cities and infrastructure and connectivity; and
(v) sustainable, low-carbon agriculture, livestock and forestry. In
addition, the program focuses on promoting the inclusion of women,
indigenous peoples, people of African descent and local
communities; climate and forest conservation; and strengthening
institutional capacities and the rule of law.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022
Brazilian general election. He was sworn in on January 1, 2023, as
the 39th president of Brazil, succeeding Jair Bolsonaro.
Fitch Ratings upgraded on July 26, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'BB', from 'BB-',
with a Stable Outlook. The upgrade reflects better-than-expected
macroeconomic and fiscal performance amid successive shocks in
recent years, proactive policies and reforms that have supported
this, and Fitch's expectation that the new government will work
toward further improvements.
In mid-June 2023, S&P Global Ratings, revised the outlook on its
long-term global scale ratings on Brazil to positive from stable.
S&P affirmed its 'BB-/B' long- and short-term foreign and local
currency sovereign credit ratings on Brazil. S&P also affirmed its
'brAAA' national scale rating, and the outlook remains stable. The
transfer and convertibility assessment remains 'BB+'. The positive
outlook reflects signs of greater certainty about stable fiscal and
monetary policy that could benefit Brazil's still-low GDP growth
prospects. Continued GDP growth plus the emerging framework for
fiscal policy could result in a smaller government debt burden than
expected, which could support monetary flexibility and sustain the
country's net external position.
Moody's credit rating for Brazil was last set at Ba2 in 2018 with
stable outlook. Moody's affirmed the Ba2 issuer ratings and
senior unsecured bond ratings in April 2022.
DBRS Inc., on August 15, 2023, upgraded Brazil's Long-Term
Foreign and Local Currency - Issuer Ratings to BB from BB (low).
At the same time, DBRS Morningstar confirmed Brazil's
Short-term Foreign and Local Currency - Issuer Ratings at R-4.
The trend on all ratings is Stable.(March 2018).
BRAZIL: Industry Confidence Up due to Selic Interest Rate Cuts
--------------------------------------------------------------
Lachlan Williams at Rio Times Online reports that the recent uplift
in industrial confidence has been linked to the commencement of
cuts in the Selic rate, Brazil's basic interest rate, and
anticipations of further reductions, as per the National
Confederation of Industry (CNI).
The Industrial Entrepreneur Confidence Index (Icei) recorded a
growth of 2.1 points, moving from 51.1 to 53.2, indicating a shift
away from the neutral 50-point mark, distinguishing confidence from
lack thereof, according to Rio Times Online.
CNI's Economic Analysis Manager, Marcelo Azevedo, commented, "For
the first time in ten months, the economic expectation index for
Brazil has crossed the 50-point threshold," the report notes.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022
Brazilian general election. He was sworn in on January 1, 2023, as
the 39th president of Brazil, succeeding Jair Bolsonaro.
Fitch Ratings upgraded on July 26, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'BB', from 'BB-',
with a Stable Outlook. The upgrade reflects better-than-expected
macroeconomic and fiscal performance amid successive shocks in
recent years, proactive policies and reforms that have supported
this, and Fitch's expectation that the new government will work
toward further improvements.
In mid-June 2023, S&P Global Ratings, revised the outlook on its
long-term global scale ratings on Brazil to positive from stable.
S&P affirmed its 'BB-/B' long- and short-term foreign and local
currency sovereign credit ratings on Brazil. S&P also affirmed its
'brAAA' national scale rating, and the outlook remains stable. The
transfer and convertibility assessment remains 'BB+'. The positive
outlook reflects signs of greater certainty about stable fiscal and
monetary policy that could benefit Brazil's still-low GDP growth
prospects. Continued GDP growth plus the emerging framework for
fiscal policy could result in a smaller government debt burden than
expected, which could support monetary flexibility and sustain the
country's net external position.
Moody's credit rating for Brazil was last set at Ba2 in 2018 with
stable outlook. Moody's affirmed the Ba2 issuer ratings and
senior unsecured bond ratings in April 2022.
DBRS Inc., on August 15, 2023, upgraded Brazil's Long-Term
Foreign and Local Currency - Issuer Ratings to BB from BB (low).
At the same time, DBRS Morningstar confirmed Brazil's
Short-term Foreign and Local Currency - Issuer Ratings at R-4.
The trend on all ratings is Stable.(March 2018).
===========================
C A Y M A N I S L A N D S
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ATOM HOLDINGS: Chapter 15 Case Summary
--------------------------------------
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 15 of the Bankruptcy Code:
Debtor Case No.
Atom Holdings (Lead Case) 23-14343
89 Nexus Way
Camana Bay, Grand Cayman
KY1-9009
Cayman Islands
AAX Asia Private Limited 23-14346
61 Robinson Road
#08-02
61 Robinson
Singapore (068893)
AAX Singapore Private Limited 23-14347
61 Robinson Road
#08-02
61 Robinson
Singapore (068893)
Business Description: The Debtors are part of a group that
engaged in the cryptocurrency business,
offering saving, spot, and futures
trading.
Chapter 15 Petition Date: June 2, 2023
Court: United States Bankruptcy Court
Southern District of Florida
Judge: Hon. Peter D. Russin
Atom Holdings'
Foreign Representatives: Angela Barkhouse and George
Kimberley Leck, as Joint Provisional
Liquidators
142 Seafarers Way, Suite N404
Flagship Building
George Town
Grand Cayman, Cayman Islands
AAX Asia & AAX Singapore's
Foreign Representative: Luke Furler, as Interim Judicial Manager
137 Amoy Street, #02-03
Far East Square
Singapore 049965
Atom Holdings'
Foreign Proceeding: Grand Court of the Cayman Islands
Financial Services Division
AAX Asia &
AAX Singapore's
Foreign
Proceeding: Interim Judicial Management under IRDA
94(3)
Foreign
Representatives'
Counsel: Gregory S. Grossman, Esq.
Juan J. Mendoza, Esq.
SEQUOR LAW, P.A.
1111 Brickell Ave., Ste. 1250
Miami, FL 33131
Tel: (305) 372-8282
Fax: (305) 372-8202
Email: ggrossman@sequorlaw.com
jmendoza@sequorlaw.com
mgonzalez@sequorlaw.com
Estimated Assets: Unknown
Estimated Debt: Unknown
Full-text copies of the Chapter 15 petitions are available for
free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/ZDXZ6TY/Atom_Holdings__flsbke-23-14343__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/6IKXXQY/AAX_Asia_Private_Limited__flsbke-23-14346__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/6SBAHJQ/AAX_Singapore_Private_Limited__flsbke-23-14347__0001.0.pdf?mcid=tGE4TAMA
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C H I L E
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GUACOLDA ENERGIA: S&P Cuts ICR to 'D' on Completion of Tender Offer
-------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit and issue-level
ratings on Chilean coal-fired power generator Guacolda Energia SpA
to 'D' from 'CC'.
S&P will reevaluate both ratings upon the settlement of the
transaction, including the company's willingness and capacity to
meet its financial obligations.
This is the second tender offer that the company has completed this
year. Guacolda exchanged $168.3 million of its $274 million
outstanding notes for new 10% notes due in 2030. Additionally,
$22.2 million of nominal amount was submitted to the tender offer,
for which the company will pay approximately $15 million in cash on
the settlement date, Aug. 17, 2023. The tender offer and the
concurrent exchange offer represent an aggregate amount of $190.5
million.
S&P will reevaluate the issuer credit and issue ratings upon the
settlement of the transaction. In particular, it will take into
account the company's new capital structure, and willingness and
capacity to meet its financial obligations.
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J A M A I C A
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NCB FINANCIAL: Gives Insight Into Reasons For Leadership Changes
----------------------------------------------------------------
RJR News reports that Chairman of the NCB Financial Group, Michael
Lee-Chin, has given some more insight into the reasons behind the
recent leadership changes at the company.
In a briefing with media, Mr. Lee-Chin said the decision had to be
made based on shareholder sentiment and key areas deemed prime for
improvement, according to RJR News.
Among those areas, he highlighted a lack of efficiency as it
relates to cost to income ratio, governance, as well as a less than
desirable customer experience.
"We can do a much better job at not only defining what governance
means, but actually living it. And as you heard from the investor
forum, I see governance as starting with the individual and it
becomes part of the culture. And . . . I wasn't happy with the
customer experience. Every time I get too many complaints. So for
those reasons, we had to make a change," he explained, notes the
report.
The company has prioritised efficiency, governance and customer
experience as areas it will address.
Interim Group CEO Robert Almeida said some areas of cost saving
have already been identified which could save the company $6
billion to $8 billion annually.
He said cost savings have so far been identified in three areas --
Executive Compensation, Consultancy and Digital Innovation.
In July, NCB Financial Group announced the appointment of Mr.
Almeida as interim Group CEO and Malcolm Sadler as interim Group
Chief Financial Officer.
This followed the removal of Patrick Hylton as CEO and Dennis Cohen
as Group Chief Financial Officer and Deputy CEO.
Mr. Lee-Chin, who cut his three-month leave of absence short, is
also carrying out some executive responsibilities.
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P A N A M A
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ENA NORTE: S&P Affirms 'BB-' Debt Rating, Off Watch Negative
------------------------------------------------------------
On Aug. 16, 2023, S&P Global Ratings affirmed its 'BB-' issue
rating on Panamanian toll road ENA Norte Trust's debt and removed
it from CreditWatch, where it had been placed with negative
implications on Feb. 27, 2023.
The stable outlook reflects S&P's expectation that higher traffic
volume will allow the project to fully repay its notes before legal
maturity.
In the first seven months of the year, ENA Norte's traffic volume
increased by almost 13% year over year and debt prepayments totaled
$21 million, above S&P's previous estimates of 7% and $17 million,
respectively. In S&P's view, the higher traffic follows Panama's
robust domestic economic recovery.
S&P said, "Considering our higher GDP growth forecast for Panama,
we now expect ENA Norte's traffic volume to grow 9%-11% in 2023 and
around 5% annually thereafter, compared with our last projections
of 6%-8% in 2023 and 2024, 5%-7% in 2025, and 4.5% thereafter. This
would lead to principal payments of $44 million to $45 million in
2023 and $47 million to $49 million in 2024. Therefore, we now
forecast the project would repay the total outstanding notes in
January 2028, one quarter before legal maturity (which was our
previous base-case scenario).
"Under hypothetically stressed levels of traffic, O&M expenses, and
capex, the expected shortfall is now $42 million, significantly
less than the $71 million from our previous downside scenario.
However, under this scenario, the project would still be unable to
fully repay its debt at legal maturity, even using its $6.8 million
debt service reserve account. As a result, and considering ENA
Norte's cash flow sweep feature on its notes, we continue to limit
the rating at 'BB-'."
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P U E R T O R I C O
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UNIVERSAL DOOR: Amends Plan to Include Priority Tax Claims Pay
--------------------------------------------------------------
Universal Door and Window Manufacture Inc. submitted a First
Amended Disclosure Statement describing Plan of Reorganization
dated August 8, 2023.
The Plan provides that only holders of Allowed Claims, that is,
holders of Claims not in dispute, not contingent, liquidated in
amount and not subject to objection or estimation are entitled to
receive distribution thereunder.
As a result of the filing by Debtor of its Chapter 11 petition,
Debtor received the benefits of Section 362(a) of the Bankruptcy
Code, which stays all collection actions and judicial proceedings
against Debtor, providing Debtor the opportunity to file the Plan
and Disclosure Statement, without the pressures that drove Debtor
into Chapter 11, as envisioned by the Bankruptcy Code.
Like in the prior iteration of the Plan, Class 3 General Unsecured
Claims shall be paid in full satisfaction of their claims their
pro-rata portion of 60 equal consecutive monthly installments of
$704.53 commencing on the Effective Date and continuing on the
30th day of the subsequent 59 months.
Class 2 consists of the Secured Claim of USDT. Class 2 is
impaired.
The Secured Portion of Class 2, estimated in $471,978, shall be
paid in monthly installments of $2,533.68, including principal and
interest at 5% per annum, commencing on the Effective Date until
the full payment of this claim. The unsecured portion of USDT's
claim (deficiency claim), estimated in $1,081,015.53, will be dealt
under Class 3.
It must be underscored that it is Debtor's contention that a motion
under Rule 3012(c) is not mandatory as the confirmation of Debtor's
Plan will comply with Section 1129 (b)(2)(A)(iii) by providing the
USDT with the indubitable equivalent of its liens. To prove this,
Debtor is attaching hereto as Exhibit K the relevant pages of the
latest appraisal of the subject property as well as the updated
cash flows and values. As it can be ascertained from said exhibit,
the secured portion of the USDT that is being paid in the Plan is
based on the latest appraisal and taking into consideration the
updated cash flows.
Class 5 consists of Priority Tax Claims. Holders of Allowed
Priority Tax Claims, secured and unsecured, including the allowed
claims of the Internal Revenue Service, Treasury Department of
Puerto Rico, and Centro de Recaudaciones de Ingresos Municipales,
shall be paid 100% of their claims, in 60 equal consecutive monthly
installments, commencing on the Effective Date and continuing on
the last day of the following 59 months, with monthly payments of
$5,841.82, including the allowed principal amounts of the claims
plus the statutory rate of interest prevailing during the month the
Plan is confirmed, estimated at 3.25% per annum. Class 5 is
impaired.
Debtor will make payments of Administrative Expense Claims,
Priority Tax Claims, Allowed Secured and General Unsecured Claims
in accordance with the payment plans set forth above from the cash
flows generated from its rental operations, the collection of its
accounts receivables, and the cash accumulated during the pendency
of the case. Initial payment to BPPR for $250,000 shall be made
from the sale of the parcels of land mentioned in the Stipulation
with BPPR.
Said sale will be a direct sale to Mr. Alexis Jesus Bosques
Acevedo, who has already submitted a formal written purchase
offer.
Lastly, Debtor's insiders' monthly management fee of $3,500.00,
will be decreased to $2,500.00 on or about July 2023, and further
decreased to $2,000.00 on or about January 2026 to give
feasibility
to the Plan.
A full-text copy of the First Amended Disclosure Statement dated
August 8, 2023 is available at https://urlcurt.com/u?l=9iPqVg from
PacerMonitor.com at no charge.
Debtor's Counsel:
Alexis Fuentes-Hernandez, Esq.
Fuentes Law Offices, LLC
P.O. Box 9022726
San Juan, PR 00902-2726
Tel: (787) 722-5215, 5216
Fax: (787) 722-5206
Email: alex@fuentes-law.com
About Universal Door
Universal Door and Window Manufacture, Inc., a company based in San
Sebastian, P.R., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. P.R. Case No. 22-01961) on July 5, 2022,
disclosing $1.54 million in assets and $2.86 million in
liabilities. Judge Enrique S. Lamoutte oversees the case.
Alexis Fuentes-Hernandez, Esq., at Fuentes Law Offices, LLC and CPA
Luis R. Carrasquillo & Co., P.S.C. serve as the Debtor's legal
counsel and financial consultant, respectively.
*********
S U B S C R I P T I O N I N F O R M A T I O N
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