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KI Legal Secures $8.5 Million for HJDK in MatlinPatterson Bankruptcy

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KI Legal successfully represented HJDK Aerospacial SA in the Chapter 11 bankruptcy of MatlinPatterson Global Advisers, culminating in an $8.5 million settlement award.

NEW YORK, NY – July 2023 – Koutsoudakis & Iakovou Law Group, PLLC (“KI Legal”) successfully secured a $8.5 million settlement for the firm’s client, HJDK Aerospacial SA (HJDK), in the recent MatlinPatterson Chapter 11 bankruptcy liquidation. The firm’s litigation charge was led by Ralph E. Preite, Partner and Head of the Bankruptcy & Restructuring Division at KI Legal.

MatlinPatterson filed for bankruptcy protection in 2021, stating it was facing more than $420,000,000 in claims from three (3) creditors with judgments from courts in Brazil and the Cayman Islands related to loans advanced by HJDK, the purchase of Brazilian cargo airline Varig Logistica, and the sale of passenger airline VRG Linhas Aereas.  

MatlinPatterson were liquidating to wind down their businesses and distribute remaining assets to their limited partner investors. However, the $420 million in non-U.S. litigation claims and judgments precluded distribution to the funds’ investment partners because the claims exceeded the funds’ assets. MatlinPatterson’s disputed the creditors’ judgments and claims, arguing that the judgments obtained from non-U.S. tribunals were invalid, therefore unenforceable, and filed bankruptcy in the U.S. to collaterally attack the non-U.S. judgments.

Having received MatlinPatterson’s notices of bankruptcy shortly before action was needed, HJDK’s Panama office retained KI Legal a mere 24 hours before the Bankruptcy Court’s deadline for filing claims. KI Legal swiftly met the court-mandated deadline, and joined in fellow creditors VRG and VarigLog’s motions to convert the Chapter 11 case to a Chapter 7 liquidation; together, the creditors argued that Chapter 7 was the only valid way for the bankruptcy cases to proceed as the funds from its incorporation were intended to liquidate, pay off its investors, and wind down – not reorganize.

After almost two (2) years of negotiations, culminating in 11th-hour settlement disputes, all of HJDK’s protections were left intact, and the Chapter 11 plan was confirmed. In the end, MatlinPatterson was duly paid its $8.5 million settlement payment pursuant to the terms of its settlement.

KI Legal’s Bankruptcy and Restructuring Division has a wide range of experience in Chapter 11 bankruptcy reorganization and bankruptcy litigation, including stay-relief, lease assumption, cash collateral usage, 363 sales, plan confirmation, and related bankruptcy matters.

Ralph E. Preite is quoted as saying, “Trans-border litigation will continue, and global recessionary trends – with the advent of hyperinflation and elevated interest rates – will point to more Chapter 11 bankruptcies in the foreseeable future. KI Legal is well positioned to handle Chapter 11 bankruptcy matters, out-of-court workouts, and enforcement of U.S. and non-U.S. judgments in bankruptcy cases.”

KI Legal looks forward to continuing to represent creditors and debtors in international and domestic Chapter 11 bankruptcies.


To reach KI Legal, please contact Zoe Darmon at (646) 766-8308 or

KI Legal focuses on guiding companies and businesses throughout the entire legal spectrum. KI Legal’s services generally fall under three broad-based practice group areas: Transactions, Litigation and General Counsel. Its extensive client base is primarily made up of real estate developers, managers, owners and operators, lending institutions, restaurant and hospitality groups, construction companies, investment funds, and asset management firms. KI Legal’s unwavering reputation for diligent and thoughtful representation has been established and sustained by its strong team of reputable attorneys and staff. For the latest updates, follow KI Legal on LinkedInFacebook, and Instagram. For more information, visit

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