GFM advises Velitec in the acquisition of SP Argentina through a Cramdown proceeding. Leading Case.
Velitec S.A., a service Company in the oil and gas industry, acquired 100% of the capital stock of SP Argentina, one of the largest oil services companies in Argentina, through a Cramdown proceeding.
A Cramdown consists of a mechanism under Argentina’s Bankruptcy Law where a company can be salvaged even when the debtor fails to obtain conformity from a majority of its creditors. The form used in this case is known as “Cramdown Power”, where the court may approve the agreement reached with only one class of creditors and obtaining a 75% approval of the non-secured creditors. This constitutes the first time this method is successfully used in Argentina.