Retroactive bankruptcy decision moves to Supreme Court

A JUDICIAL   decision that sent shock waves through Panama financial structures and put bondholders at risk is heading for the Supreme Court.

A Cocle judge had granted R.G.Hotels bankruptcy protection retroactive to 2012.  The development  company is already mired in investigations over a project in Coronado  involving doubtful loans from Caja de Ahorros.

ABS Trust, the administrator of the trust that guaranteed the emission of bonds and securities by the company for $30 million, on Thursday November 27 filed an application before the Supreme Court challenging the Cocle decision.

The trust seeks to have the case transferred to Panama City.

Judge Manuel Jesus Corrales Hidalgo of Coclé issued the decision, which puts the security of the bonds at risk, since the bankruptcy would be in place before the bonds were issued.

ABS Trust said in its request that since both the company and the administrator of the trust and regulators are located in Panama City, he case should be handled in that district instead of Coclé.

The trust also expressed concerns about the official appointed by the court, Dimas Espinoza, to handle the bankruptcy, saying “his expertise in management of hotels and tourist facilities is unknown.”