By Brazil Stock Guide – Oi S.A. (B3: OIBR3), Brazil’s debt-laden telecom operator, is now under a court-appointed administration that is undoing the strategy of its ousted board. The former leadership had sought to shift the center of the company’s restructuring to the United States through Chapter 11, rather than keep the process recognized in Brazil under Chapter 15.
On October 1, the U.S. Bankruptcy Court for the Southern District of New York rejected Oi’s request to terminate Chapter 15 proceedings, effectively blocking the board’s plan to file for a broader Chapter 11. The ousted executives had argued such a move was necessary to cover liabilities excluded from Brazilian bankruptcy law, including tax debts and post-petition obligations. The court, however, upheld the existing recognition and noted that creditors — including V.tal, Brazil’s largest neutral fiber network controlled by BTG Pactual (B3: BPAC11), in which Oi still holds a 27% stake — had relied on the U.S. protection to extend financing.
Days earlier, the Rio de Janeiro Court of Appeals (TJ-RJ) had removed CEO Marcelo Millet and the entire board, froze assets, and anticipated liquidation measures. Reports by court-appointed monitors pointed to asset stripping since late 2024 and R$1.5 billion ($290 million) in unpaid post-petition liabilities. The court said the intervention was necessary to avert an imminent collapse of essential telecom services, including systems tied to air traffic control. Judge-appointed administrators Bruno Rezende and Tatiana Binato were tasked with overseeing the transition.
A request for an injunction filed by Oi’s former board to suspend that decision was rejected by Justice Mônica Maria Costa of the TJ-RJ. This left the intervention fully in place, consolidating Rezende and Binato’s authority over the transition of essential services.
The former board’s plan to migrate toward Chapter 11 has now been effectively neutralized. On October 2, Oi also announced the cancellation of an extraordinary shareholders’ meeting (AGE) scheduled for October 9, which was set to vote on a 25-for-1 reverse stock split and a revised corporate charter. The cancellation followed a ruling by the 7th Commercial Court of Rio de Janeiro, which suspended shareholder deliberations amid the ongoing legal dispute.