In our second episode, partners Andy Thorp, Stuart Cullen and Ellie Crespi discuss the US$1.67 billion global debt restructuring of Brazilian oil and gas services group Constellation (formerly Queiroz Galvão Oil & Gas). 

The transaction saw a creative move by the BVI courts, who accepted the appointment by the company of a light touch provisional liquidator over the BVI subsidiaries of Constellation, providing a moratorium against its unsecured creditors and breathing space for the Brazilian restructuring to operate. 

Here we take a closer look at the legal and practical implications of the restructuring, and whether legislative reform is on the cards in the BVI. 

Key Takeaways: 

• The Operation Car Wash (lava jato) investigation, as it did with many Brazilian businesses in the same industry, had a massive impact on the operations of Oil and Gas giant Queiroz Galvão Oil & Gas group (now Constellation). 
• The restructuring involved an unprecedented move by the BVI courts, who accepted the appointment by the company of light touch provisional liquidators, with only minimal supervisory powers but providing the umbrella protection of a moratorium. 
• The ejection of one of the key BVI subsidiaries from the Brazilian restructuring required a BVI solution to compromise its obligations to allow the reissuance of fresh notes and security. 
• Following the successful Brazilian RJ, the BVI scheme was approved in February of this year and obtained Chapter 15 recognition in the SDNY in March to complete the US$1.5+ billion restructuring.