During a meeting in a civil court Tuesday, Brazilian iron ore and pellet producer Samarco and its creditors, by suggestion of the judge, have decided to opt for arbitration by a local chamber, Cejusc, to settle their dispute.
As previously reported by SteelOrbis, Samarco has been in judicial recovery since April 2021, resulting from the collapse of its Fundao waste dam in 2005, which caused 19 deaths and a massive environmental disaster.
The group of creditors, who are owed an estimated $4.7 billion from the company, have submitted a plan to convert the debt into shares of the Samarco capital, assuming the control of the company. Samarco claims that, if the plan is adopted in its entirety, it will ultimately drive the company into bankruptcy.
Under the terms adopted for the arbitration, the judicial recovery is now suspended for two months, and the parties will have until July 4 to submit a joint plan to Cejusc. If no agreement is reached, the process will return to the civil court.