LATAM Airlines Group has asked the US Supreme Court to refuse an appeal for post-bankruptcy interest by bond holders from a Brazilian LATAM affiliate, reports Law 360.
According to an SEC filing, the LATAM Group's on May 8, 2023, was due to oppose an appeal in the US Supreme Court by the so-called TLA Claimholders Group, a group of bondholders that assert certain claims against TAM Linhas Aereas S.A. d/b/a LATAM Airlines Brasil (JJ, São Paulo Congonhas).
The background is as follows: The LATAM Airlines Group exited Chapter 11 bankruptcy protection on November 3, 2022. This followed the June 18, 2022, approval of its reorganisation plan by the US Bankruptcy Court, when the authority also rejected all remaining objections and entered an order confirming the plan, known as the "Confirmation Order".
On June 23, 2022, the TLA Claimholders Group filed a motion to stop the Confirmation Order pending appeal, which the Bankruptcy Court denied on July 8, 2022.
On August 31, 2022, after briefing and oral argument by the parties, the US District Court denied an appeal of the TLA Claimholders Group. Specifically, it rejected the TLA Claimholders Group's request for payment of post-petition interest on its claims. It found that the Bankruptcy Court was not mistaken in finding that TAM Linhas Aereas S.A. was insolvent. The District Court also denied the TLA Claimholders Group's motion to stay the Confirmation Order.
On September 2, 2022, the TLA Claimholders Group filed a notice of appeal – the Second Circuit Appeal - in the District Court, further appealing the Confirmation Order to the United States Court of Appeals for the Second Circuit. Following oral argument, the Second Circuit, on December 14, 2022, unanimously affirmed the District Court's decision rejecting the Second Circuit Appeal.
On March 14, 2023, the TLA Claimholders Group filed another petition for a "writ of certiorari" with the United States Supreme Court, seeking a judicial review of the lower Second Circuit court's decision. The LATAM Group opposes this appeal.
