Dominican Republic May Reopen Lawsuit Against Odebrecht
The Attorney General’s Office (PGR) of the Dominican Republic confirmed Thursday that the Brazilian construction giant Odebrecht S.A. did not pay a US$32 million installment of a corruption fine, thus creating a possibility for the lawsuit to be reopened.
The PGR said it therefore filed a formal complaint with Brazilian justice to ensure the collection of $124 million that the company has pending with the Dominican Republic, media reported.
Following a leniency agreement signed with the Dominican judicial authorities in 2017, the company was ordered to pay the Carribean country a $184 million fine - twice as much as it spent on bribes to obtain public contracts between 2001 and 2014, according to media.
Once Odebrecht signed the leniency agreement, the Dominican Republic reportedly suspended criminal actions against the company, its subsidiaries, shareholders and directors.
The compensation was planned to be disbursed over an eight-year period in annual payments up until 2025 and the company paid the first two installments, or $60 million, in accordance with the agreement. The third installment was due in July.
The installments paid so far, according to earlier media reports, went to a special PGR’s fund and were allocated to crime prevention programs in the country.
Odebrecht reportedly stopped the payment as it “opted to include the Dominican Republic on the list of creditors of its holding, known as ODB,” considered as the largest judicial reorganization in Brazilian corporate history.
Judicial reorganization or financial restructuring is used when companies in debt try to avoid bankruptcy, which was the case with Odebrecht. In June, the company filed for bankruptcy protection before the court in Sao Paulo, aiming to restructure $13 billion of debt.
The Dominican Republic is the only country included in the company’s judicial reorganization, as the debt restructuring reportedly relates to “the parent company Odebrecht SA and a network of holding companies,” with which the Dominican Republic signed the leniency deal.
Odebrecht’s main operating businesses are excluded from the bankruptcy protection, such as its construction unit OEC, operating in Panama, Ecuador, Peru and Guatemala.