Following the court's ruling, Nova Austral will be able to continue with its activity and the reorganization it proposed at the beginning of the year.
Photo: Nova Austral.
In mid-May, Judge Pablo Aceituno of the Court of Letters and Guarantee of the Chilean city of Porvenir issued a bankruptcy order against Nova Austral. Now, another tribunal, the Court of Appeals of Punta Arenas, Chile, has decided to suspend that order and give the salmon company momentary respite.
As reported by the local newspaper La Tercera, Nova Austral had filed an appeal against the ruling declaring its bankruptcy. However, the decision was not taken in response to it, but to another appeal that EWOS, Cargill Aqua Nutrition's product and services brand, had filed against the same court order.
Within this judicial process, it is worth noting that the decision of the Porvenir Court to declare Nova Austral bankrupt was taken in response to the contestations filed by two of its creditors, Nutreco - a competitor of EWOS - and Salmonera Dalcahue Limitada, both of which disagreed with the terms of the company's reorganization plan.
In fact, Nutreco had also appeared in the framework of EWOS' claim in the Court of Appeals of Punta Arenas, which has now paralyzed the bankruptcy order. According to La Tercera, in its filing, the animal nutrition and aquafeed company considered that EWOS did not have standing to appeal the judgment since it did not participate in the motion to challenge it.
The local Chilean newspaper also said that, in addition to requesting the rejection of EWOS's appeal, in its brief to the court, Nutreco questioned the injunction requested by EWOS, arguing that the effects of the judgment that annulled the reorganization agreement had already occurred and the measure would only generate uncertainty.
Nevertheless, as mentioned above, the appellate court finally decided not to grant Nutreco's request and to accept the injunction requested by EWOS, paralyzing the bankruptcy order of the salmon company.
The truth is that uncertainty has been accompanying Nova Austral in recent times and the situation worsened after the confirmation in April of the nearly million-dollar fine for environmental damage imposed by Chile's Environmental Superintendency.
The ruling confirming the fine only added more debt to the already delicate financial situation of the Norwegian-owned Chilean salmon company, whose ownership had been transferred to the main creditors in January, a decision which, as stated, Nutreco and Salmonera Dalcahue Limitada had challenged.
Now, while the future of the company is still being elucidated in the courts, this latest decision gave a respite not only to Nova Austral but also to its workers and the entire city of Porvenir, according to its mayor, José Gabriel Parada Aguilar. On the locality's website, MuniPorvenir, the municipal alderman said the ruling "is a light amid the problem faced by Nova Austral, especially thinking of the workers."
"This is good news because it invites it to continue with the reorganization. We hope that all the company's problems can be solved. It is a momentary relief for the workers and also for the commune of Porvenir, whose economy and labor market depend largely on the aquaculture sector. We will remain attentive to the legal proceedings," said Parada Aguilar.
*Sources:
- 'Corte de Apelaciones de Punta Arenas suspende quiebra de salmonera Nova Austral', La Tercera article by Leonardo Cárdenas .
- 'Alcalde de Porvenir se refirió a la resolución de Corte de Apelaciones que suspende liquidación de empresa Nova Austral', MiniPorvenir article by JQuelin.
