CFG Peru plan stalled by adversary proceedings, plan administrator says

By Sarah Lizee

Olympia, Wash., July 15 – The bankruptcy plan administrator for China Fishery Group Ltd. debtor CFG Peru Investments Pte. Ltd. (Singapore) is seeking court approval of certain actions that could bring the debtor’s plan closer to effectuation, according to court documents filed with the U.S. Bankruptcy Court for the Southern District of New York on Friday.

The plan administrator said the case is at a “critical juncture.”

In October 2021, one of CFG Peru’s operating subsidiaries was close to obtaining sanction in the High Court of Justice of England and Wales for its U.K. proceeding, which is part of the implementation of the Chapter 11 plan.

Getting the sanction would have cleared the way for the transactions underlying the plan to close, which would have allowed the debtor to emerge from Chapter 11.

Following emergence, CFG Peru’s equity interests in the Peruvian operating companies would be transferred to a newly formed entity held by their club lenders and senior noteholders.

“These hopes were dashed by the news, received just weeks before the sanction hearing, that club lender Sun Securities had filed the Sun Securities proceeding,” the plan administrator said.

In response, the court confirmed that the proceeding was illegal and in contravention to prior court orders, and ordered Sun Securities to withdraw its proceeding.

In May, another entity, purporting to be a beneficial holder of a senior notes claim, filed a separate proceeding.

The plan administrator said the proceedings forced China Fishery to delay the sanction hearing date for the U.K. proceeding, and therefore the plan’s effective date.

The plan administrator said he is seeking relief from the court that would ensure the beneficial holder’s claim can be paid off through transfer of funds to an escrow account and extinguished as soon as possible, along China Fishery to push forward with the U.K. proceeding.

Defending the beneficial holder’s adversary proceeding to its successful end could take months to years, the plan administrator said.

China Fishery is a Hong Kong-based manager and operator of fishing vessels for coastal and deep-sea industrial fishing. The company filed bankruptcy on June 30, 2016 under Chapter 11 case number 16-11895.

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