MatlinPatterson fund says settlement with VRG is ‘major breakthrough’

By Sarah Lizee

Olympia, Wash., July 25 – MatlinPatterson Global Opportunities Partners II LP is seeking court approval of a settlement with Gol Linhas Aereas, SA, formerly VRG Linhas Aereas SA, according to a motion filed Monday with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the parties have been in mediation for several weeks to resolve their disputes.

The company said the settlement represents a “major breakthrough” in the Chapter 11 cases.

“The settlement marks the need of over a decade and a half of international litigation with VRG across three continents and aligns the interests of the debtors and VRG in confirmation a plan and concluding these Chapter 11 cases as quickly as possible,” the debtor said.

The settlement contemplates the deferral of a ruling on case dispositive motions so that the debtors can consummate a confirmable plan in a timely manner with VRG’s support.

Under the agreement, VRG will be paid $42 million by the debtors on the effective date of a Chapter 11 plan.

The debtor noted that, because of the mediation confidentiality, it has been unable to determine whether other parties in interest support the settlement.

The agreement requires the debtor to file a plan by no later than Sept. 30.

“If the debtors were required to litigate the issues resolved by the settlement, such efforts would delay the Chapter 11 cases and consume the estates’ resources, to the detriment of creditors – with no guarantee that the ultimate result would be any more beneficial to the estates than the result obtained by the settlement,” the debtor said.

MatlinPatterson is a New York-based distressed debt and credit opportunities fund. The company filed bankruptcy on July 6, 2021 under Chapter 11 case number 21-11255.

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