Spanish Court Cites Brattle Analyses in Restructuring Matter
In a complex restructuring matter, a Brattle team provided analyses and Senior Associate Dr. Fernando Bañez testified on behalf of Naviera Armas – a leading Spanish ferry company operating in the Canary Islands – after minority creditors objected to the company’s 2023 restructuring plan. Recently, the Provincial Court of Las Palmas de Gran Canaria approved Naviera Armas’s restructuring plan, citing Brattle’s expert analyses.
In 2023, Naviera Armas faced severe financial difficulties, leading to the approval of a restructuring plan by the Commercial Court No. 3 of Las Palmas. The company had a total debt of nearly €600 million, consisting of €441 million in secured bonds, a €58 million emergency bridge loan from the bondholders, and €100 million bank loans and Official Credit Institute (ICO)-backed facilities. A court-appointed expert valued the company at €403 million, rendering certain creditors – such as Banco Santander, CaixaBank, Banco Sabadell, the ICO, and Acciona – out of the money, meaning they had no realistic chance of recovering their investment under this valuation.
The law firm Garrigues defended the restructuring plan during legal proceedings. In 2024, Garrigues retained Brattle to assess the reasonableness of the plan after the objections of certain creditors. These creditors claim that the court-appointed expert’s valuation of the company was flawed – leading to an excessive write-off of their debt – and that allocating a portion of bondholder’s equity to the founding Armas family was unfair.
The Brattle team – which, along with Dr. Bañez, included Principals Dr. José Antonio García and Dr. Pedro Marín and Associate Piero Fortino – provided expert support during the judicial process, delivering economic and financial analyses of the restructuring plan and the company’s valuation conducted by the court-appointed expert. The team’s analyses showed that the objections of the creditor’s experts were baseless and thus the plan was solid. Dr. Bañez testified at the hearing in January 2025.
In its March 2025 ruling, the Court dismissed all arguments raised by the minority creditors challenging the plan. The Court concluded that the expert reports submitted on behalf of the creditors lacked credibility. Citing Brattle’s analyses, the ruling determined that the write-offs to minority creditors were not excessive, allowing Naviera Armas’s bondholders – including JP Morgan, Barings, Bain Capital, and others – to (a) take 100% control of the company and (b) voluntarily allocate 6% to the Armas family to ensure business continuity.
Furthermore, the Court reaffirmed that out-of-the-money creditors may face full write-offs in non-consensual restructurings and that bondholders have the discretion to transfer the equity they receive under the plan, provided that the original allocation did not negatively impact other creditors.
