A group of debt holders of the InterCement filed a lawsuit against the Bradesco saying the Brazilian bank – one of the underwriters of the company’s bonds issued in 2014 – did not disclose a conflict of interest, according to documents filed in a New York court on Friday.
Bondholders allege that Bradesco hid from investors that its preferred shares included a put option that gave them a greater advantage in any restructuring, allowing it to recover funds before them, according to the document.
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According to the group, creditors can recover only 45% to 50% of the debt value. Bradesco will be compensated before them by up to R$2.2 billion.
The lawsuit was filed by creditors including Redwood Capital, Moneda Asset Management and Contrarian Capital.
Bradesco and InterCement did not comment. The Wall Street Journal previously reported the lawsuit.
In September, InterCement reached an agreement with some of its creditors to initiate an extrajudicial restructuring process. The Brazilian company presented a plan to restructure around R$21.9 billion in debt to a São Paulo court. The proposal had the support of more than a third of its debt holders when the request was filed, according to documents.
