Liz Osborne Discusses Her Work on Agrokor Restructuring with Global Restructuring Review

Akin Gump financial restructuring partner Liz Osborne has been quoted in the Global Restructuring Review article “Of systemic importance: the race to save Agrokor,” which looks at the restructuring of the Croatian food conglomerate. Osborne led the Akin Gump team advising the Agrokor creditors’ committee.

The article reports that the Agrokor bankruptcy began in 2017, with Osborne assuming her role in December of that year. While she had a mandate to represent creditors’ interests, she was retained by the company. “It was an unusual structure,” she said.

Osborne described how she had to work closely with local firms to solve a host of novel issues, under tight timeframes and with little precedent. While large creditor groups usually have an aligned economic interest, such as holding the same debt instrument, that was not the case in this instance.

“They all had quite different interests, some of them were secured, some unsecured, some were trade suppliers,” Osborne noted. “As you can imagine the level of sophistication was very different between the different members of the creditors’ committee, so that proved to be a challenge and made the negotiations particularly complex. It did take a bit of time, but ultimately we got there and built a very good relationship with the committee members.”

According to the article, local creditors challenged many of the international claims against Agrokor. In addition, there was doubt over whether creditors with challenged claims could vote on the settlement plan or receive the new instruments issued under it. To get around this, Osborne’s team created a mechanism to claw back or cancel new instruments if the challenges ultimately succeeded which allowed creditors with challenged claims to receive their new instrument entitlements on the implementation date.

One other problem, the article says, involved ensuring that the Russian financial institutions Sberbank and VTB would not hold more than half of the equity instruments, which could lead to international sanctions against Russian-owned businesses. In an effort to avert this risk, Osborne said a structure was devised to escrow certain instruments that would have been issued to the Russian banks.

Looking back on the Agrokor case, Osborne said, despite the challenges, she loved working on it. “It was so full on, but professionally it was probably one of the best deals I’ve worked on for a long time, because it just had everything. It was complicated and difficult, but that’s also what made it interesting.”