Compania de Alimentos Fargo petitioning creditors' objection to case dismissal

By Caroline Salls

Pittsburgh, April 30 - Compania de Alimentos Fargo SA's involuntary Chapter 11 petitioners objected to the company's request to dismiss the case in light of the fact that their claims are not recognized in Fargo's Argentine bankruptcy proceedings, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the involuntary Chapter 11 filing was made on Sept. 11 by Fargo bondholders The Rainbow Global High Yield Fund, Argo Capital Investors Fund SPC, The Star Fund and The Rainmac Fund, which hold more than 65% of Fargo's 13¼ senior notes due 2008.

"At this time, petitioners have no voting rights, no enforcement rights and no rights at all in the concurso with respect to at least 90% of their claim," according to the objection.

In addition, the petitioning creditors said Fargo has not given the bankruptcy court an accurate picture of how long it will take to wrap up the concurso proceedings, which began more than four years ago, noting that they "are currently suspended and may continue to be suspended for years and years."

Once the suspension is lifted and the proceedings resume, the petitioning creditors said the process could take additional years to complete as the proceedings were barely begun at the time of the suspension.

In addition, the objection said Fargo is responsible for the delays and suspension, and the now-suspended concurso is subject to the threat of foreclosure by Fargo's secured creditor, who is controlled by the same entities that own and control Fargo's equity interests.

The petitioning creditors also said Fargo omitted evidence from the U.S. State Department that "the Argentine judicial system is inefficient and slow to stem corruption."

Finally, the petitioning creditors said Fargo has ignored the important differences between the protections afforded to creditors under United States law and Argentina law.

Compania de Alimentos Fargo is a Buenos Aires, Argentina-based producer and distributor of packaged bread and bakery products in Argentina. Its Chapter 11 case number is 06-12128.

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