Decision provides significant relief to the 3,600 workers who would be affected by the bankruptcy.
The Court of Appeals of Punta Arenas in Chile has decided to suspend the liquidation of the Norwegian-owned salmon producer Nova Austral, following a petition by feed giant Ewos against the resolution that had declared the salmon producer bankrupt.
The decision by the appellate court accepted an order temporarily halting the liquidation process of the salmon farming company, according to Chilean media outlet Mundo Acuicola.
On May 14, Judge Pablo Aceituno issued a liquidation order against Nova Austral in response to objections from creditors Nutreco and Salmonera Dalcahue Limitada, who were dissatisfied with the terms of the company’s reorganization plan.
Nutreco, represented by attorney Fernando Urrutia of Cariola Diez Pérez-Cotapos, filed a brief with the Court of Appeals of Punta Arenas as part of Ewos’ appeal. In the brief, Nutreco argued that Ewos lacked standing to appeal the ruling, as it had not participated in the objection incident, and requested the appeal be dismissed. Additionally, Nutreco questioned the order to not innovate, pointing out that the effects of the ruling that nullified the reorganization agreement had already taken place and that the measure would only create uncertainty.
Simultaneously, Nova Austral also appealed Judge Aceituno’s decision. In a statement, the salmon producer claimed that the lower court’s ruling contained serious errors by accepting objections to the reorganization agreement, arguing that these objections were “contrary to the law” and constituted an undue agreement, despite the agreement being approved with all legal requirements, with over two-thirds of the creditors’ approval in a deliberative meeting supervised by the court.
Nova Austral’s three largest creditors are Nordic Trustee, which has invested $415 million, DNB Bank at $69 million, and Skretting at $23 million. The company owes more than $550 million in total debt.
In its reorganization request, the company explained that its performance has been affected by several factors, including sanctions imposed by the Superintendency of the Environment (SMA), hindering its normal operations.
