In a 25 October decision published by Oi in a company update, a three-judge appeals panel at the Lisbon Court of Appeal overruled the Commercial Court of Lisbon's 30 July decision rejecting the plan, thereby removing what Oi calls the last stumbling block towards recognition of the judicial recovery plan in all relevant jurisdictions.
Oi argued that, having received recognition in the Netherlands, the plan should be rubber-stamped by the Portuguese court without delay. It said that the recast European Insolvency Regulation (EIR) left the Portuguese court with little choice but to do so.
Citing that argument, the appeals court ruled that the plan will be binding on all creditors, including those who did not approve it.
Oi creditors approved Latin America's largest-ever reorganisation plan after a 15-hour meeting in December, with three quarters of creditors approving the 65 billion reais (US$20 billion) restructuring.
The Seventh Corporate Court of the Judicial District of Rio de Janeiro ratified the plan in January, and in June it gained recognition in the US courts.
The Portuguese court's decision is currently available only in Portuguese, but Oi says it will soon furnish an English language translation to the US Securities and Exchange Commission.
Notable among the objectors to the plan was Lisbon-headquarters telecommunications company Pharol, formerly known as Portugal Telecom and 49% owned by the Portuguese government, whose 100%-owned subsidiary Bratel holds a 27.5 percent voting share in Oi.
The day after the Portuguese court's decision, Pharol announced it had won a stay on a 4 billion reais (US$1.2 billion) capital raising it has been seeking to halt through arbitration proceedings in the Market Arbitration Chamber (CAM), a Brazilian institution for shareholder disputes.
On 11 October, a Brazilian court gave the go-ahead for the arbitration process to begin between Oi and shareholder Pharol, lifting an earlier injunction.
The CAM arbitrator then ordered the stay over "the effects of any deliberation related to the capital increase of Oi," on 26 October, Pharol wrote in its announcement.
The arbitrator suspended deliberations regarding the Capital Increase on the same date, the company adds.
The arbitrator gave Pharol a deadline of 5 November to submit further arguments supporting its arguments against the capital increase.
Pharol said in the release that the arbitration is "the only possible alternative to preserve its rights, considering the one-sided and relentless corporate decisions taken by Oi so far".
In Brazil and the US
Counsel to Oi
BMA - Barbosa, Müssnich, Aragão
Partners Luiz Antonio Sampaio de Campos, Sergio Savi, Rafael Calabria and Felipe Evaristo dos Santos Galea in Rio de Janeiro
Rosman Penalva Souza Leao Franco Avogados
Partners Paulo Penalva Santos and Luiz Aberto Clonna Rosman in Rio de Janeiro
Partner Ana Tereza Basilio in Rio de Janeiro
White & Case LLP
Partner Richard Kebrdle in Miami
Counsel for the International Bondholders' Committee
Sergio Bermudes Advogados
Associates Marcelo Carpenter and Luis Tomas Alves de Andrade
Partner Allan Brilliant in New York
Counsel to the Ad Hoc Group of bondholders
Pinheiro Neto Advogados
Partner Guiliano Colombo in São Paulo
Cleary Gottlieb Steen & Hamilton LLP
Partners Richard Cooper and Luke Barefoot in New York
Counsel to Bratel (Pharol)
Cescon, Barrieu, Flesch & Barreto Advogados
Partners Maria Cristina Cescon and Fábio Rosas, and associates José Luis Rosa and Juliana Vasquez in São Paulo
Lollato Lopes Rangel Ribeiro Advogados
Partner Tiago Lopes and associate Guilherme França in São Paulo
Andrade Fichtner Advogados
Partners Jose Antonio Fichtner, Sergio Nelson Mannheimer and Julio Rebello Horta, with associates Marcelo Dickstein and Eduardo Cardoso in Rio de Janeiro
Greenberg Traurig LLP
Partner Mark Bloom in Miami, and associate Ryan Wagner in NY
Counsel to Societe Mondiale Fundo
Galdino, Coelho, Mendes Advogados
Partners Joao Mendes, Rafael Pimenta and Lia Stephanie Saldanha Pompili in Rio de Janeiro
Counsel to Aurelius Capital Management
Kramer Levin Naftalis & Frankel
Partners Kenneth Eckstein and Bradley O'Neill, special counsel David Blabey Jr and associateAndrew Dove in New York
Counsel to Jasper Berkenbosch as bankruptcy trustee of Coöp
Partner Eduardo Munhoz, and associates Joäo Vincente Carvalho, Carolina Iwamoto, Ana Luiza Arguelloand Ana Elisa Laquimia
Partners Corinne Ball in New York and Louis Fischer in Washington, DC