Multicanal wins decision to maintain protection under U.S. code

By Jeff Pines

Washington, March 29 - Multicanal SA will keep its protection from legal action under U.S. law, according to a March 29 order from the U.S. Bankruptcy Court for the Southern District of New York.

A group of Multicanal bondholders including Argentinian Recovery Co. LLC sought to throw the company involuntarily into Chapter 11 arguing that the Trustee Indenture Act trumped Sec. 304 of the bankruptcy code, which provides foreign companies with protection from U.S. legal action, while they reorganize under their home countries' legal code.

But the bankruptcy court refused the request to dismiss Multicanal's section 304 petition - which would have allowed the bondholders to involuntarily throw the company into Chapter 11.

Multicanal is conducting an out-of-court restructuring under Argentine law called an acuerdo preventivo extrajudicial or APE.

The Buenos Aires-based cable television company's Chapter 11 case number is 04-10280.

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