MatlinPatterson representative seeks conversion of bankruptcy case

By Sarah Lizee

Olympia, Wash., Oct. 4 – MatlinPatterson Global Opportunities Partners II LP’s foreign representative, Vanio Cesar Pickler Aguiar, asked the U.S. Bankruptcy Court for the Southern District of New York to convert the company’s Chapter 11 bankruptcy case to Chapter 7, according to a motion filed Friday.

Aguilar said the debtors’ negative cash flow is depleting the debtors’ estate and there is no reasonable likelihood that the defunct debtors will rehabilitate.

“The debtors are defunct and incapable of emerging as operating entities,” Aguilar said.

The foreign representative claims the debtors have a conflict of interest in investigating their insider transactions completed in the run up to the filing for bankruptcy or in investigating the significant fees incurred in connection with the filing of the cases.

Aguilar also said that there are no relevant activities the debtors can take that a Chapter 7 trustee can’t undertake.

“The ongoing administrative costs of the estate would be much lessened by conversion,” Aguilar added.

MatlinPatterson is a New York-based distressed debt and credit opportunities fund. The company filed bankruptcy on July 6 under Chapter 11 case number 21-11255.

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