UPDATE 1-Dutch court puts unit of Brazil's Oi under creditor protection
(Adds formal confirmation of court protection request in paragraphs 1-5) By Guillermo Parra-Bernal and Ana Mano SAO PAULO, Aug 9 (Reuters) - A Dutch court has accepted a request by Brazilian phone carrier Oi SA to put a Netherlands-based unit under protection from creditors, handing them a victory as they seek to recoup billions of dollars in losses. In a securities filing, Oi said the Amsterdam-based commercial court accepted a request to put subsidiary Oi Brasil Holdings Coöperatief UA under a so-called "suspension of payment" procedure. The court also appointed an independent trustee to represent the interests of creditors in the subsidiary, the filing said. Reuters reported earlier in the day that Oi had sought the suspension of payments and that the court had appointed lawyer Jasper Berkenbosch of law firm JonesDay as the trustee for Oi Brasil Holdings. In recent months, several creditors including Aurelius Capital Management LP asked the Dutch court to start bankruptcy proceedings against the subsidiary. The court's decision is a "huge development because it forbids Oi's management from representing the company without the trustee's consent," a source directly involved in the matter told Reuters on Tuesday. New York-based Aurelius declined to comment. Efforts to contact officials at Amsterdam's commercial court and Berkenbosch of Jones Day for comment were unsuccessful. Oi, Brazil's fourth-largest wireless carrier and the largest fixed-line operator, filed in June for creditor protection in a Rio de Janeiro court to restructure 65.4 billion reais ($21 billion) in debt. The ruling makes it tougher for Oi to protect existing shareholders from potential heavy dilution by bondholders during bankruptcy proceedings in Brazil. It also gives more say to bondholders of Oi Brasil Holdings and Portugal Telecom International Finance Co, both Dutch-based subsidiaries of Oi, during reorganization talks. Both subsidiaries issued a combined $6.33 billion in bonds. The ruling means Oi will have to deal with two different in-court reorganization processes in two different countries, a setback for the company, according to investors including Paolo Gorgó. Apart from participating in the proceedings, the trustee will investigate Oi Brasil Holdings' prior and current management teams and enforce the company's claims against parent Oi and other affiliates. ($1 = 3.1555 Brazilian reais) (Additional reporting by Toby Sterling in Amsterdam; Editing by James Dalgleish, Bernard Orr)
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