Brazil’s Corrupt Odebrecht Firm Files for Bankruptcy
Odebrecht, the Brazilian company that is synonymous with corruption, decided to file for bankruptcy protection on Monday after years of graft scandals and trials involving top Latin American businessmen and politicians.
The firm’s lawyers have requested US$13 billion from the São Paulo bankruptcy court to settle its debts with its creditors, which include three public banks. The firm would be allowed to continue its operations during this time.
This sum, if granted, would signify the largest debt protection process in Latin America to date, Reuters reported.
Founded in 1944 as a construction company, Odebrecht expanded into the chemical and energy industries to become one of Brazil’s largest conglomerates. It counts among its building achievements the Miami International Airport, the Lisbon metro, and Brazil's Transnordestina railway. At one point, its global success was seen to have symbolized Brazil’s economic boom.
In 2014 it became one of the subjects of Brazil’s highly commended Lava Jato corruption probe, which is also known as “Operation Car Wash” and has seen the toppling of several prominent Latin American politicians and corporations.
By 2015, the company was found to have spent nearly $800 million in bribes to win contracts across 12 different countries, in what was called the “largest foreign bribery case in history” by the U.S. Department of Justice.
Its CEO, Marcelo Odebrecht, was sent to prison and in 2016 the company paid $3.5 billion to Brazilian, American, and Swiss prosecutors in what is still the largest-ever corruption leniency fine in history.
Since then the firm has tried to restructure its debts and sell its subsidiaries to make up for its losses and a steep decline in business.
In November, however, it announced that it would miss a $11 million debt payment, and within the last month two sales of its major subsidiaries fell through--including its ethanol division Atvos, which declared bankruptcy on May 29, and the petrochemical company Braskem, which it jointly shared with Brazilian petroleum firm Petrobras.
Odebrecht’s lawyers are currently in the process of developing a full list of its debts, according to Brazilian media.