Latin Lawyer s th Annual Charity Awards -...

Latin Lawyer’s 9th Annual

Charity Awards

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LEARN:• Nearly 70 substantive concurrent continuing legal education

sessions examining this year’s theme: Globalization and theImportance of Law, Language and Culture

• Explore topics focusing on dispute resolution, legal and regulatoryissues, business and fi nance, human rights, sports and entertainment,trade and the impact of culture on law and business

• An entire year’s worth of CLE/CPD credits

NETWORK:• Networking opportunities with thought leaders and experts, policy

makers, judges and international lawyers from around the world

• Twice daily networking breaks, two luncheons featuring high levelkeynote speakers and a networking lunch

• Fun after-hours get together on fi nal night of conference plusyoung lawyers brunch

• Daily evening receptions at the Cirque Éloize, Montréal ScienceCenter – The Belvedere and Fairmont The Queen Elizabeth Hotel

PARTICIPATE: • Meet colleagues who share your areas of interest at

specialized meetings

• Attend working business meetings of the Section’s regionaland special interest committees

CALLINGALL LAWYERS AND FUTURE LAWYERS

WITH A PRACTICE OR INTEREST IN INTERNATIONAL LEGAL ISSUES

JOIN THE ABA SECTION OFINTERNATIONAL LAW FOR OUR

2015 FALL MEETINGIN THE VIBRANT AND CHARMING CITY OF

MONTRÉAL, CANADA

FAIRMONTTHE QUEENELIZABETH

OCTOBER20–24,2015

Join us in Montréal to fi nd your global place in international law. For more information and to register, please visit

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On-the-night photos............................................................ 3The year that was 2014 ....................................................... 9The Deal of the Year winners ............................................. 11M&A .................................................................................. 12Corporate finance .............................................................. 15Project finance .................................................................. 18Restructuring .................................................................... 22Private equity ................................................................... 25Disputes ............................................................................ 28Regulatory ......................................................................... 31Individual lawyer of the year awards ................................. 35Introducing the clearing houses ........................................ 38

Contents

LATIN LAWYER CHARITY AWARDS CEREMONY

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Some of the Latin American legal community’s

biggest names were in attendance at the Hotel

Unique in São Paulo for a charity dinner to celebrate

the winners of this year’s Latin Lawyer awards. The

dinner was held in aid of three of the region’s pro

bono clearing houses; Chile’s Fundación Pro Bono,

Brazil’s Instituto Pro Bono and Mexico’s Fundación

Barra. Latin Lawyer would like to thank Maples and

Calder in particular for their generous donation.


www.LATINLAWYER.com 3

On the night

Latin Lawyer celebrated with the winners of its annual awards at a charity dinner attended by some of the Latin American legal community’s leading lights


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http://www.dentons.com

2014 DEAL OF THE YEAR AWARDS


Rocked by scandals and mired in eco-nomic slowdown, Brazil has lost its lustre. Elsewhere, Argentina is reeling from its second default in 12 years and an increas-ingly assertive regime in Venezuela has seen relations with the West and markets reach a new low. Amid this turbulence, 2014 was also the year new investors flocked to Latin America’s Pacific coast, with Mexico, Peru, Chile and Colombia among the most popular destinations. Mexico was particularly boosted by reforms to its energy sector, now open to foreign investment for the first time in nearly 80 years, while the remaining three countries continue to experience strong growth and operate open door policies to international investors.

The shortlist for Latin Lawyer’s Deal of the Year Awards 2014 – for which we re-ceived 316 nominations – illustrates these developments. Mexico’s energy reforms produced some strong contenders, in the private equity category for instance, with the country’s first independent energy exploration and production company obtaining more than half a billion US dollars in funding. But it was in project

finance that Mexico shone, with funding for the Los Ramones pipeline construc-tion, which will transport gas from the US to Mexico winning the top prize in that category. Weakening demand in China for Latin American minerals does not seem to have dampened the country’s interest in the region, especially in Peru, where the acquisition of a copper mine by a consortium of Chinese companies won the M&A category. And despite its woes, Brazil’s legal market showed that it still has plenty of clout in the region, especially in restructuring, where two of the three deals shortlisted were from the country.

The acquisition of the Las Bambas copper mine, a record-breaker in both Peru and China, was always going to be a strong contender in the M&A category. Set against the backdrop of a mega merger between Glencore and Xstrata, the latter of which owned the mine, the deal was not only large, but also complex and required deft work by the law firms involved, especially with Chinese and Peruvian authorities keeping a close eye on proceedings. Consequently, it was a standout winner. But another

strong contender came from Colombia, where the tie-up between mobile services provider Millicom and state-owned UNE EPM marked the largest ever telecoms merger in the country. A combination of the multibillion-dollar price tag and the fact that the merger involved a state-owned company and a private enterprise, a rare combination in Colombia, made the deal significant. A surprise package this year came from the Dominican Republic, where two leading banking groups, León and BHD, merged in the largest deal to date in the country’s financial sector.

Protectionist regimes and recent sovereign defaults in Argentina and Ecuador have made life difficult for corporate lawyers and their clients. As a consequence, there were some strong contenders from those countries in the corporate finance category, where lawyers have proved remarkably resilient and continue to satisfy client demands. In Argentina it was a US$1 billion bond issuance by the state-owned energy company YPF, the largest such offering in the country’s history and the first since

Vincent Manancourt profiles the winners, and runners-up, of Latin Lawyer’s Deal of the Year Awards, celebrating the lawyers who made Latin America’s biggest and most sophisticated transactions happen in 2014

Dealof the year

2014

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the Argentine government reached a settlement with Repsol over ownership of YPF. In Ecuador, there was another first when the government returned to the debt markets for the first time since it defaulted in 2008. But it was the wizardry of lawyers in Brazil which finally won out. The multibillion-dollar issuance by RioPrevidência, a pensions fund, which was secured by the state’s future oil and gas royalties, was notable in both its scope and complexity, and showed that in spite of the slowdown, Brazil’s lawyers still pack a punch.

The reforms sweeping through Mexico’s energy sector were in the spotlight this year, especially in the project finance category, where the winning deal was the financing of the Las Ramones pipeline, which will carry gas from Texas into Mexico. It was the first large-scale energy project to close following the reforms and many think it a harbinger of things to come. Chile’s status as one of Latin America’s most developed economies was also in evidence, as surging investment in infrastructure shows. A deal to build two new metro lines in Santiago came with a hefty price tag that led the parties involved to look to more uncon-ventional sources of financing. Meanwhile, in Brazil the financing for an onshore wind farm provides a blueprint for similar projects in the future and underscored the region’s status as a leader in renewable energy.

Unsurprisingly, Brazil and Mexico, home to Latin America’s most sophisti-cated legal markets and largest companies, dominated the restructuring category, where the legal work is often highly

complex. And while it was a torrid year for Eike Batista, formerly Brazil’s richest man, who saw his assets shed two-thirds of their value, the work done by lawyers to restructure the debt belonging to one of his companies, OGX Petróleo e Gás Participações, an oil and gas company, was widely heralded as precedent-setting by the country’s legal community. Another Brazilian oil and gas company, Lupatech, also had its debt skilfully restructured. In that deal, lawyers managed to negotiate a settlement whereby the company offered its creditors equity in return for having its debts cancelled out. In Mexico, the strongest contender was another debt-for-equity deal, this time involving Homex, a homebuilder.

The private equity category evidenced the growing appeal of Latin America’s Pacific Alliance countries: Mexico, Peru, Chile and Colombia. In Mexico, a deal that saw Sierra Oil & Gas, Mexico’s first independent exploration and production company, secure investment worth half a billion US dollars was heralded as the beginning of a new era, while in Peru, the local arm of Chilean conglomerate Falabella acquired home improvement store Maestro in a cross-border deal that was one of the largest in private equity in 2014. In the end the winning deal came from Colombia, where Advent International, one of the world’s largest private equity companies, bought a stake in Alianza Fiduciaria, a Colombian asset manager.

In disputes, the winner was a settle-ment between Spanish energy company Repsol and the Argentine government, which saw Repsol’s shareholders accept a

US$5 billion bond package in compensa-tion for assets expropriated from the company in 2012. The deal signals a more conciliatory approach by the Argentine government. Other strong contenders included a dispute between two Chinese companies over ownership of a mine in Peru: a supremely complicated deal involving Peruvian and Chinese law; and a landmark settlement in Brazil, whereby a system used by banks to determine their customers’ creditworthiness was deemed to be lawful.

In the regulatory category we recog-nise the skills of lawyers in deals where interaction with a regulator is vital to their successful conclusion. Brazil’s lawyers once again showed themselves to be particularly talented in a merger between two private education companies, Kroton Educacional and Anhanguera Educacional Participações, that will create one of the world’s largest private universities. Due to the size of both of the companies, Brazil’s antitrust authorities were heavily involved in what was one of the longest and most complex deals since Brazil changed its antitrust law in 2012. In Argentina, a notes exchange by Latin America’s largest natural gas transportation company was made particularly complex by a new capital markets law expanding the power of the state regulator. Another runner-up was a dispute in Panama between two natural gas companies.

Over the next few pages we highlight the year’s winning deals and the runners-up, along with the lawyers who ensured their inclusion in this year’s shortlist.

MethodologySubmissions for Latin Lawyer’s Deal of the Year 2014

were accepted from any law firm or company wishing to

nominate a transaction that closed between 1 January

2014 and 31 December 2014. Latin American firms and

companies were allowed to submit one deal per category

for each Latin American jurisdiction in which they have

an office, while international firms and companies

were able to submit one deal per category, with the

exception of international firms’ local law offices, which

could make separate submissions. Latin Lawyer’s

editorial team selected the winners taking into account

information in submissions and our daily reporting

throughout the year. Considerations when deciding the

winner included value, time frame, complexity, legal

creativity shown, political and regulatory sensitivity and

the number of jurisdictions to which the deal related.



M&AWinner: Las Bambas acquisition Runners-up: Centro Financiero BHD and Grupo Financiero León merger

Milicom and UNE EPM merger

Corporate financeWinner: RioPrevidência oil royalties securitisationRunners-up: Ecuador returns to global debt markets

YPF bond offering

Project financeWinner: Los Ramones pipelineRunners-up: Santiago metro

Brazil onshore windfarms

RestructuringWinner: Restructuring of OGX Petróleo e Gás Participações and

its subsidiariesRunners-up: Lupatech restructuring

Homex restructuring

Private equityWinner: Sale of stake in Alianza Fiduciaria to Advent InternationalRunners-up: Sale of Maestro to Falabella Sierra Oil & Gas secures funding

DisputesWinner: Repsol v ArgentinaRunners-up: Chinese arbitration award case

Brazilian credit rating class action

RegulatoryWinner: TGS notes exchangeRunners-up: Kroton and Anhanguera merger Gas Natural Fenosa v ASEP


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Few deals have as justifiable a claim to be as truly unprecedented as the acquisition of Las Bambas by a Chinese consortium. The deal to buy the Las Bambas copper mine from Glencore Xstrata is not only the biggest in Peruvian M&A history, but it is also China’s largest foreign mining acquisi-tion to date.

It is perhaps fitting that the US$7 billion merger was made possible by a global record-breaker. Ruling on the US$76 billion merger between Glencore and Xstrata, which would create one of the largest natural resources groups, Chinese competition authorities withheld their approval for the deal until both companies had agreed to sell the Las Bambas project, or other assets. This placed incredible pressure on negotiators since the failure to sell the mine would have had a major impact on the Glencore Xstrata merger. When a deal was reached to sell the mine to a consortium of Chinese companies, including MMG, Guoxin International Investment and CITIC Metal, the relief on all sides was

palpable. But for legal counsel the work was just beginning.

The Chinese consortium retained Rodrigo, Elías & Medrano Abogados, Dentons and White & Case LLP as counsel, while Baker & McKenzie LLP advised CITIC Metal on certain aspects of the deal. White & Case were the main international counsel, advising on shareholder arrangements and guiding the consortium through the require-ments needed to gain approval from the Hong Kong Stock Exchange, on which MMG is listed. Reflecting the inter-national nature of the deal, the firm drew on more than 10 offices (as well as a wealth of experience on complex cross-border transactions around the world). Meanwhile, Rodrigo Elías acted as Peruvian counsel to the consortium, undertaking due diligence and advising on local law and tax issues, such as mining, environmental and corporate regulation.

Glencore Xstrata hired Grau Abogados in Peru and Linklaters LLP as international counsel for the transac-tion. Over the course of a year, Grau

worked with the company to unpick the complex regulatory requirements, devise sales strategies and advise on a host of other issues, from finance and tax to environmental and real estate. Lawyers also negotiated for the value of the transaction to be revised upwards, from US$5.85 billion to US$7 billion, in order to reimburse Glencore Xstrata for ongoing capital expenditure and other costs it incurred developing the mine during the long negotiation period until the deal closed. Glencore has a long-term relationship with Linklaters, and the two also worked together on the Xstrata merger.

Under the watchful gaze of the Chinese competition authorities, Las Bambas was eventually sold to its new Chinese owners in April 2014 after nearly a year of challenging nego-tiations. For many observers, the deal underscores the shift in investor interest from Australia and Africa, to Latin America. Latin America’s legal com-munity will be hoping the deal forms a blueprint for many more to come.

A merger marathon

The acquisition of Peru’s Las Bambas copper mine by a Chinese consortium was a record-breaker in more ways than one. Not only did the deal have a hefty price tag, but the closure of the mega merger between mining companies Glencore and Xstrata was contingent upon its successful conclusion. Legal counsel on all sides had to dig deep

M&A



THE TEAMS

WINNERLas Bambas acquisition Counsel to MMG, Guoxin International and CITIC Metal• Rodrigo, Elías &

Medrano Abogados• Dentons• White & Case LLP

Counsel to CITIC Metal• Baker & McKenzie LLP

Counsel to Glencore Xstrata• Grau Abogados• Linklaters

RUNNERS-UPCentro Financiero BHD and Grupo Financiero León mergerCounsel to Centro Financiero BHD• In-house counsel• Headrick Rizik Alvarez &

Fernández• Simpson Thacher &

Bartlett LLP

Counsel to Grupo Financiero León• Squire Sanders, Peña

Prieto Gamundi*• Sidley Austin LLP

* Now called Squire Patton Boggs Peña Prieto Gamundi

Counsel to Banco Sabadell• Pellerano & Herrera

Counsel to International Finance Corporation• OMG

***

Milicom and UNE EPM mergerCounsel to Millicom• In-house counsel to

Millicom• In-house counsel to

Colombia Móvil• Davis Polk & Wardwell

LLP• Brigard & Urrutia

Abogados• Uría Menéndez

Counsel to UNE EPM• In-house counsel to

EPM• In-house counsel to

UNE• Clifford Chance LLP• Gómez-Pinzón Zuleta

Abogados

Cecilia Gonzáles of Grau Abogados

Claudia Prado of Trench, Rossi e Watanabe Advogados (Baker & McKenzie)

John Anderson of White & Case LLP Luis Carlos Rodrigo Prado of Rodrigo, Elías & Medrano Abogados


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Safely steering a complex, multibillion-dollar banking merger is no mean feat for any Latin American law firm. Doing so in a jurisdiction where mergers even a fraction of the size are few and far between requires something out of the ordinary.

When Centro Financiero BHD, owner of the Dominican Republic’s second-largest bank, took steps to merge with Grupo Financiero León, owner of the fourth-largest bank in the country, it hired Headrick Rizik Alvarez & Fernández and the New York office of Simpson Thacher & Bartlett LLP. For León, it was Squire Sanders, Peña Prieto Gamundi (now called Squire Patton Boggs Peña Prieto Gamundi) and Sidley Austin LLP.

Taking more than a year to complete and involving a com-plex two-step structure, the deal was not only the largest to date in the Dominican Republic’s financial sector, but created one of the largest banks in Central America. Although the initial drafts of the contracts were in English and governed by New York law, after extensive negotiations the documentation ended up being drafted almost entirely in Spanish and governed by Dominican law – underlining the importance of Dominican counsel. Adding further complexity to the transaction was the fact that both banking groups had to buy out the other stakeholders, which included Spanish bank Banco Sabadell (advised by Pellerano & Herrera) and the International Finance Corporation (advised by OMG). While the merger may have received global coverage, the success of the deal relied firmly on the abilities of truly local players.

The US$4.4 billion tie-up between the Colombian arm of Luxembourg-based telecoms company Millicom and local counterpart UNE EPM marked the largest telecoms merger ever to take place in Colombia.

Two years in the making, the deal led to the combination of a state-owned entity and privately owned company – a rare occurrence in the Colombian market – and involved firms from the US, Spain and Colombia. Milicom hired Brigard & Urrutia Abogados, Davis Polk & Wardwell LLP and Uría Menéndez, while UNE EPM relied on Gómez-Pinzón Zuleta Abogados and Clifford Chance LLP.

Alongside the cultural and political challenges accompanying any merger between a public and private company, legal counsel also had to structure the deal with few precedents to draw upon and meet the strict requirements imposed on regulated com-panies. Among these was the necessity for the parties to receive approval from five different stakeholders: the antitrust authority, the telecoms regulator, financial authorities, UNE’s bondholders, and the city council of Medellín, where UNE is headquartered.

Furthermore, the size of the transaction brought its own chal-lenges. Combined, UNE EPM and Colombia Móvil, Millicom’s Colombian arm, employ over 30,000 workers across Colombia. This contributed to the intense media scrutiny that surrounded the deal. To overcome these challenges, the companies carefully crafted an action plan to work with the media. Perhaps more crucially, they also successfully outlined the benefits of the merger to the companies’ employees.

Buying local

When two of the Dominican Republic’s biggest banking groups merged, the country’s lawyers proved to be a safe pair of hands on a record-breaking financial transaction

A ringing success

The tie-up between a Colombian state-owned telecoms company and the local subsidiary of its privately owned, Luxembourg-based counterpart showcased the skills of lawyers in three jurisdictions

Runners-up



A sharp fall in the value of Brazilian bonds could have spelled disaster for Rio de Janeiro’s state-run pension fund. With local debt making up half its assets, RioPrevidência suddenly had to plug a financing black hole or risk not being able to cover its pension liabilities in the future. To help plug a pension deficit that by 2013 stood at some US$9.9 billion, RioPrevidência launched a simultaneous US$2 billion international securitisation of oil and gas royalties and local debenture offering to Brazilian institutional investors, which raised 2.4 billion reais (approximately US$1 billion) and covered its debt obligations for years to come.

While both transactions were notable, it was the royalties-backed issuance, representing the first-ever international securitisation of Brazilian oil and gas royalties, which set the financing apart. Without a legal precedent to draw upon, getting the deal through required substantial creativity from legal counsel to resolve the headache-inducing complexi-ties of an untested transaction.

To undertake the task, RioPrevidência hired DLA Piper LLP’s Chicago, New York and São Paulo offices and Brazilian firm Campos Mello Advogados, while

joint lead managers BB Securities and BNP Paribas Securities turned to the New York and São Paulo offices of Hogan Lovells LLP and Brazil’s Souza, Cescon, Barrieu & Flesch Advogados.

With the notes issued on the Luxembourg stock exchange and the transaction spanning three different jurisdictions, legal counsel had to devise a special purpose vehicle (SPV) that complied with both US law, and Brazilian regulations limiting public entities from issuing debt.

To raise much-needed funds, the pension fund sold 3.3 billion reais (US$ 1.1 billion) worth of royalties to two local state-owned banks, Banco do Brasil and Caixa Econômica Federal – only to later repurchase the lot in order to securitise them to help lower borrowing costs.

Lawyers established a Brazilian securitisation company to accomplish the repurchasing, which issued local debentures to the banks in exchange for royalty rights. These rights were then assigned to the Rio Oil Finance Trust, an SPV established as a Delaware statuary trust, in exchange for proceeds from the international issuance.

The Rio Oil Finance trust used the royalty rights alongside other

hydrocarbon revenue streams assigned to it by RioPrevidência to back the international notes’ offering. Funds from the international issuance will also cover RioPrevidência’s ongoing pension liabilities.

The parties chose a 144A/Reg S issuance in order to attract sophisticated strategic investors. Furthermore, access to international capital markets offered a longer time for repayment, higher volumes and more attractive price levels. Therefore a master trust programme was set up, which allows for maximum funding flexibility and the ability to more easily undertake future issuances.

Five months later, RioPrevidência drew on the master trust programme to issue notes worth US$1.1 billion – also secured by the state’s future oil and gas royalties. The same special purpose vehicle and the same firms were used for the transaction, which brought the amount raised by the special purpose vehicle to more than US$4 billion since its launch.

RioPrevidência was created in 1999 to manage investments intended to fund the social security benefits and pensions of Rio de Janeiro’s public servants.

Financing the future

When RioPrevidência faced a funding shortfall, legal counsel had to think on their feet and devise a creative financing structure allowing the state-run pension fund to issue bonds secured by the state’s future oil and gas royalties

Corporatefinance


16

THE TEAMS

WINNERRioPrevidência oil royalties securitisationCounsel to RioPrevidência and the State of Rio de Janeiro• DLA Piper LLP*• Campos Mello Advogados* One partner has since moved to Clifford Chance LLP

Counsel to BB Securities and BNP Paribas• Hogan Lovells LLP• Souza, Cescon, Barrieu & Flesch Advogados

Counsel to Wilmington Trust• Richards, Layton & Finger, PA

RUNNERS-UPEcuador returns to global debt marketsCounsel to Ecuador• In-house counsel• Hogan Lovells LLP

Counsel to Citibank and Credit Suisse• Clifford Chance LLP• Pérez Bustamante & Ponce Abogados

***

YPF bond offeringCounsel to YPF in the bond offering and bond exchange• In-house counsel• Estudio O’Farrell Abogados• Chadbourne & Parke LLP

Counsel to initial purchasers and local placement agent in the bond offering• Tanoira Cassagne Abogados• Milbank, Tweed, Hadley & McCloy LLP

Counsel to the exchange agent in the bond exchange• Jones Walker LLP

Isabel Costa Carvalho of Hogan Lovells Roberto Vianna do R Barros of Campos

Mello Advogados Maurício Santos of Souza, Cescon,

Barrieu & Flesch Advogados



“True monsters” is how President Rafael Correa described Ecuador’s international creditors after the country defaulted on US$3.2 billion of notes in 2008. At the time, Correa argued the international bonds issued by Ecuador between 1976 and 2006 were compromised because they were issued without proper government authority and not registered with the US Securities and Exchange Commission. An international court reduced the price of outstanding bonds by more than 60 per cent. However, just six years later, Ecuador was doing business with international creditors once again, this time issuing US$2 billion worth of notes.

For lawyers, the challenge was to structure, document and issue the notes, while at the same time reassuring foreign investors that Ecuador would not default again. Hogan Lovells LLP advised Ecuador on the transaction, while Clifford Chance LLP in New York and Pérez Bustamante & Ponce Abogados in Ecuador counselled the bookrunners.

Ecuador issued the bonds as part of a strategy to diversify the country’s financing sources and came almost 10 years after Ecuador’s last bond offering. Since the default, Ecuador became increasingly reliant on Chinese investment to fund its public investment programmes, borrowing some US$11 billion over the last five years. The Export-Import Bank of China and the China Development Bank have been among the most regular sources of financing: providing a US$313 million financing package for a hydroelectric generation project in 2013 and funding worth US$2 billion two years earlier.

YPF’s recent history has been nothing if not turbulent. Formerly majority owned by Repsol, Argentina’s president Cristina Kirchner seized the Spanish company’s controlling stake in 2012. The move put YPF at the epicentre of a legal battle that not only threatened to curb the Argentine state-owned company’s growth ambitions, but also its future ability to collaborate with oil majors on future projects. When, in early 2014, Repsol agreed to settle with Argentina over the expropriation in exchange for bonds valued at around US$5 billion, YPF breathed a sigh of relief.

It was in light of this settlement that YPF went to the capital markets; issuing an Argentine record of US$1 billion worth of corporate bonds to finance its exploration activities in Vaca Muerta, one of the world’s largest shale deposits. YPF called on Argentina’s Estudio O’Farrell Abogados in Buenos Aires and US firm Chadbourne & Parke LLP for the offering.

Acting through its exchange agents, which were advised by Jones Walker LLP in New Orleans, YPF swapped US$85 million of its outstanding 10 per cent bonds due in 2028 for 8.75 per cent bonds due in 2018. However, closing the transaction came with its own complexities. Given that the bond exchange represented a reopening of a previous issuance, expiration dates, interest rates and other terms and conditions had to be identical to the previously opened bonds. Not only that, but due to market constraints, the deal had to be completed in a tight time frame of less than one month.

In spite of the challenges, investor demand was high. YPF reported the 10-year, 8.75 per cent bonds being more than five times oversubscribed. Tanoira Cassagne Abogados in Buenos Aires and the New York and São Paulo offices of Milbank, Tweed, Hadley & McCloy LLP helped the initial purchasers place the bonds internationally and locally.

Angels and demons

Ecuador’s sovereign debt default seven years ago meant lawyers had to navigate choppy waters to ensure the country’s smooth return to the international capital markets

Fuelling a shale boom

Ranging from high inflation to the country’s recent debt default, many of Argentina’s recent woes are well documented. Throw in a simmering dispute over ownership of state-owned energy company, YPF, and you have a challenging atmosphere for the company to make the largest corporate bond offering in the country’s history

Runners-up


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The US$890 million financing to con-struct phase two of the southern section of the Los Ramones gas pipeline, which will span nearly 300 kilometres from San Luis de Potosí to Guanajuato, is just one part of a huge project that will allow Mexico to double the quantity of its natural gas imports from the US, which has experienced a shale-led natural gas boom in recent years.

Described as Mexico’s largest energy investment in 40 years, the Los Ramones pipeline, when complete, will stretch 1,200 kilometres from Texas into Mexico and is projected to require a total investment of approximately US$3 billion.

Tag Pipelines Sur, one of the Pemex affiliates in charge of building the southern section of the pipeline, received counsel from Mexican firms Galicia Abogados and Rodríguez Dávalos Asociados, and Squire Sanders (now called Squire Patton Boggs) in

Washington, DC. French utilities company GDF, which is developing the pipeline jointly with Tag Pipelines and ICA Fluor, hired López Velarde, Heftye y Soria in Mexico City, Curtis, Mallet-Prevost, Colt & Mosle LLP in Houston and Linklaters in London and New York. PMI, a holding company owned by Pemex, sought counsel from González Calvillo, SC in Mexico.

The Mexican section of the pipeline has been divided into two tranches: a northern section, called Los Ramones Norte, and a southern section, Los Ramones Sur. Los Ramones Norte will run 450 kilometres, from Nueva León to San Luis de Potosí. Tag Pipelines and Gasoductos de Chihuahua will be in charge of its operation and maintenance. Since the deal to develop the southern section of the pipeline was struck, Tag Norte has obtained US$1.3 billion of funding for Los Ramones Norte. The financing package came as two

private equity firms – New York-based BlackRock and Connecticut’s First Reserve – announced that they had signed an agreement to buy a 45 per cent equity interest in Los Ramones from PMI reportedly worth US$900 million. All of this interest will serve to justify the Mexican government’s deci-sion in 2013 to open up the country’s oil and gas sector to foreign investment.

By enabling the import from the US of large volumes of shale gas, the project will help Mexico satisfy its growing domestic demand for natural gas and electricity, and allow the country to generate lower-cost power by fuelling new power plants and converting existing inefficient fuel-oil burning power plants to cleaner natural gas-fired technology. The resulting lower power prices are expected to make Mexico’s already booming manufacturing sector even more competitive by lowering overhead costs.

Unblocking the pipeline

The ground-breaking deal that earmarked financing for the Los Ramones pipeline is the first to close following Mexico’s deep structural reforms to the sector

Projectfinance



THE TEAMS

WINNERLos Ramones pipelineCounsel to ICA Fluor• In-house counsel – Ariadna

Cabanillas and Jude Leblanc

Counsel to GDF Suez• López Velarde, Heftye y Soria• Curtis, Mallet-Prevost, Colt & Mosle

LLP• Linklaters

Counsel to the debtors• González Calvillo, SC• Galicia Abogados• Rodríguez Dávalos Asociados• Cleary Gottlieb Steen & Hamilton

LLP• Squire Patton Boggs

Counsel to the banks• Ritch, Mueller, Heather y Nicolau,

SC• Shearman & Sterling LLP

RUNNERS-UPSantiago metroCounsel to Empresa de Transporte de Pasajeros Metro• In-house counsel• White & Case LLP• Guerrero Olivos

Counsel to BNP Paribas and Japanese lender Sumitomo Mitsui Banking Corporation• Milbank, Tweed, Hadley & McCloy

LLP• Cariola, Díez, Pérez-Cotapos & Cía

Ltda

Counsel to BBVA Securities and Deutsche Bank Securities• Claro & Cía• Davis Polk & Wardwell LLP

Counsel to Deutsche Bank Luxembourg• Pillsbury Winthrop Shaw Pittman

LLP

***

Brazil onshore windfarmsCounsel to Renova• In-house counsel• Barbosa Müssnich & Aragão• Tauil & Chequer Advogados in

association with Mayer Brown

Counsel to BNDES• In-house counsel

Counsel to Banco Santander, Banco Bradesco and Banco BTG Pactual• Machado, Meyer, Sendacz e Opice

Advogados

Guillermo Manning Martínez and Jesús Rodríguez Dávalos of

Rodríguez Dávalos Asociados

Paul O’Hop of Squire Patton Boggs

Juan Giráldez of Cleary Gottlieb Steen & Hamilton LLP

Robert Ellison of Shearman & Sterling LLP


20

Over the past year, a clutch of wind energy projects coming online has seen Brazil double its installed capacity. Yet perhaps more than any other, it is one deal that has captured the imagina-tion of project finance lawyers.

Representing the largest-ever project finance transaction in the renewables sector in Brazil, Renova successfully obtained US$916 million funding for 15 windfarms consisting of three bridge loans. Negotiations took more than a year to close and involved three of the country’s top-tier law firms.

Adopting an innovative repayment system, whereby holding companies could use redeemable shares from their subsidiaries, the structure is intended to be a more efficient means for companies that own assets, such as multiple wind farms, to obtain financing by grouping them within the same holding company. This allows the holding company to act as a single debtor and enables banks to only finance one project with a single loan agreement – reducing the number of guarantees and pledges legal counsel needs to draft.

Barbosa Müssnich & Aragão acted as lead counsel to Renova in the multi-stage project finance deal. Brazil’s state development bank, BNDES, granted the first bridge loan, worth US$269 million. This was followed by a US$179 million promissory notes issuance, for which Renova was advised by Tauil & Chequer Advogados in association with Mayer Brown. The third loan, divided into three tranches, includes a US$329 million loan from BNDES, a US$139 million loan from Banco do Brasil and the option for Renova’s holding company to make two future project bond issuances worth a combined US$65 million.

Machado, Meyer, Sendacz e Opice Advogados advised Santander, BTG Pactual and Bradesco, which were partial guarantors for the final, three-tranche loan, until the financial completion of the project. While bank guarantees for project finance transactions have long been used in Brazil, their use by BNDES transactions remains relatively novel, particularly for bridge loans.

Santiago’s metro, which is renowned as one of the best-run subway systems in the Americas, has seen passenger numbers nearly triple over the past decade and is a symbol of the city’s emergence into one of the Latin America’s major business hubs. That position is likely to be cemented with Proyecto 63, a plan to add two new lines – representing 37 kilometres of track and 28 new stations – to the network.

Estimated to cost in excess of US$3 billion, the project’s hefty price tag presented a significant challenge and led the parties involved to look to more unconventional sources of financing. With the government agreeing to provide US$2.2 billion of the cost, Metro operator Empresa de Transporte de Pasajeros Metro took the unusual step of tapping the international capital markets to make up the shortfall.

In early 2014, the metro operator placed bonds issuance worth US$500 million – the first international bond issuance to ever take place in Latin America. Because the metro operator is a state-owned company, the transaction required approval from several authorities, which added further complexity to the process. The metro operator called on White & Case LLP and Guerrero Olivos, while initial purchasers BBVA Securities and Deutsche Bank Securities received counsel from Davis Polk & Wardwell LLP in New York and Claro & Cía in Chile.

The metro operator also retained the same firms for an US$800 million credit facility later that year for the same project. Working with Chile’s Cariola, Díez, Pérez-Cotapos & Cía Ltda and the New York and Los Angeles offices of Milbank, Tweed, Hadley & McCloy LLP advised the lending banks, which were led by France’s BNP Paribas and Japan’s Sumitomo Mitsui Banking Corporation.

Besides making one of Latin America’s most highly regarded networks even more expansive, it is hoped the new lines will also help promote social mobility by connecting some of the poorest boroughs with the centre of the capital. An estimated 11 million citizens are expected to benefit from the expansion of the network.

Winds of change

Renewable energy is on the rise in Latin America and the sector has an increasing need for project finance. This transaction, to finance the construction of an onshore windfarm in Brazil, will likely prove influential for years to come for its innovative and unique structure

Smoothing the ride

Santiago’s subway system is already the most expansive in Latin America. With further improvement plans on the cards, legal counsel were essential in ensuring that financing Chile’s ambitious plans went off without a hitch

Runners-up

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22

The rise and fall of Brazilian entrepre-neur Eike Batista has been breathtaking in its suddenness. Having built a com-modities empire from scratch, by 2011 he was worth US$30 billion and ranked as the world’s eighth-richest person, according to Forbes magazine. But just three years later and it was all starting to go wrong. The value of Batista’s business empire plummeted after a crisis of con-fidence sparked by OGX, his flagship oil exploration and production company, failed to meet production and financial targets. By the end of 2014, OGX had defaulted on a US$45 million bond repayment and was seeking bankruptcy protection. The subsequent restructuring of some US$5 billion worth of debt was the largest ever seen in Latin America and represented the region’s largest ever corporate reorganisation.

For one, the deal represents one of Brazil’s first DIP, or debtor-in-possession, financings. Provided for in US chapter 11 bankruptcy proceedings, this gives the indebted company the power to continue running the business – with the caveat that it must do so in the interests of the creditors. While DIP financings are fairly common in the US, they are unusual in Brazil, and it was a

challenge for lawyers to persuade the court and all the parties involved that a DIP financing would work. With funds provided by the existing bondholders, which were counselled by Pinheiro Guimarães – Advogados, the financing required US$215 million to be injected into the company to keep it afloat.

The company will be recapitalised as bondholders exchange debt for equity in one of the first debt restructurings in which the bondholders will emerge with a majority stake in the company. Sergio Bermudes Advogados and Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados and Paulo Cezar Pinheiro Carneiro Advogados Associados in Brazil, and Kirkland & Ellis LLP in the US advised OGX for the transaction, while counsel to the bondholders was provided by New York’s Cleary Gottlieb Steen & Hamilton LLP and Pinheiro Neto Advogados in Brazil. Deloitte, which acted as the judicial administrator, was advised by Brazil’s Veirano Advogados. This restructuring is also seen as key to dispelling accusations that Brazil’s bankruptcy law protects shareholders at the cost of creditors – an outcome that will reassure investors there are good structures in place for

successful restructurings.Negotiations were not all smooth

sailing, however. A group of minor-ity bondholders, representing around US$250 million, hired Brazil’s Barbosa Müssnich & Aragão and McDermott, Will & Emery LLP in New York to file an objection to the restructuring plan in the Brazilian courts on the grounds that it was discriminatory. They held that they were not given the same opportunity to invest in the company as some of the larger bondholders.

Brown Rudnick LLP also helped a smaller group of the minority bond-holders file a lawsuit in the Supreme Court of the State of New York against indenture trustee Deutsche Bank, which they accused of giving the majority bondholders preferential treatment in the recovery plan negotiations. These were not substantial obstacles, however, as the risk the deal would be derailed by minority bondholders was small given the plan was passed by a large majority. While the fall from grace of formerly Brazil’s richest man may have been spectacular, the landing may have been made that little bit softer the ingenuity of his legal counsel.

Damage limitation

When Brazilian oil company OGX failed to meet production targets in 2011, it was the first indication of trouble for Eike Batista’s companies. But while the successive crumbling of his business empire may have been quick, the subsequent restructuring of OGX’s debt is an impressive example of damage limitation

Restructuring



THE TEAMS

WINNERRestructuring of OGX Petróleo e Gás Participações and its subsidiariesCounsel to the minority bondholders• Barbosa Müssnich & Aragão• Brown Rudnick LLP• McDermott, Will & Emery LLP

Counsel to OGX• Kirkland & Ellis LLP• Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados• Sergio Bermudes Advogados• Paulo Cezar Pinheiro Carneiro Advogados Associados Counsel to the ad hoc group of bondholders• Cleary Gottlieb Steen & Hamilton LLP• Pinheiro Neto Advogados Counsel to Deloitte• Veirano Advogados Counsel to Deutsche Bank• Mattos Muriel Kestener• Moses & Singer LLP Counsel to lenders in DIP financing• Pinheiro Guimarães - Advogados

RUNNERS-UPLupatech restructuringCounsel to Lupatech• Felsberg Advogados• Machado, Meyer, Sendacz e Opice Advogados• Shearman & Sterling LLP• Marval, O’Farrell & Maival

Counsel to Garden City Group• Lobo & Ibeas• Jones Day

Counsel to the Bank of New York Mellon• Tauil & Chequer Advogados in association with Mayer

Brown• Emmet, Marvin & Martin LLP

Counsel to the bondholders• Bingham McCutchen LLP• Pinheiro Guimarães – Advogados

Counsel to Bank of America Merrill Lynch• Clifford Chance LLP

***

Homex restructuringCounsel to Homex• Paul Hastings LLP• Mijares, Angoitia, Cortés y Fuentes SC• Rafael Ambrosi y Asociados

Counsel to the unsecured creditors• Cervantes Sainz Abogados• Akin Gump Strauss Hauer & Feld LLP in the US• Creel, García-Cuéllar, Aiza y Enriquez SC

Counsel to secured creditors• Martínez, Algaba, de Haro, Curiel y Galván-Duque

Counsel to International Finance • Corporation (IFC)• Santamarina y Steta

The winning restructuring team


24

Ever since Mexico’s government changed its housing policy to encourage urban rather than rural construction, homebuilders in the country have been struggling to make ends meet – primarily because the change in policy has saddled them with land they can’t build on or sell.

One of the worst affected companies was homebuilder Homex, which failed to make payments to bondholders in 2013 and faced the prospect of defaulting on a score of others. By September that year, the company had amassed some US$2.5 billion in debt against less than US$13 million in cash. To stem the tide, Homex filed for bankruptcy protection in May 2014.

The deal they hammered out saw creditors emerge with most of the company’s equity. Akin Gump Strauss Hauer & Feld LLP in the US and Cervantes Sainz Abogados and Creel, García-Cuéllar, Aiza y Enriquez SC in Mexico advised the unsecured creditors in negotiations, while the secured creditors used Mexico’s Martínez, Algaba, de Haro, Curiel y Galván-Duque. On the other side of the negotiating table, Paul Hastings LLP, Mijares, Angoitia, Cortés y Fuentes SC and Rafael Ambrosi y Asociados advised Homex.

Mexico’s bankruptcy reforms, implemented in early 2014, had a particularly big impact on the deal, allowing Homex to receive a debtor in possesion (DIP) loan from a third-party lender, and file the restructuring plan for the company and 11 of its subsidiaries together, rather than individually. Although DIP financing was possible under the previous law, it was generally not used because of a lack of clarity surrounding its legal structure.

Other Mexican homebuilders Geo and Urbi Desarrollos Urbanos have also filed for bankruptcy following the govern-ment policy shift on Mexico’s low-income-housing sector and construction by the three builders has all but come to a halt. Restructuring specialists within Mexico’s legal community are playing their own part in helping the sector to build stronger foundations, and following this particular deal, it is projected that Homex will restore housing production to 2012’s level within six years.

Representing the first restructuring to take place in Brazil solely concerning bonds issued abroad, the landmark restructuring plan followed by Lupatech, a Brazilian valve manufacturer in the oil industry, also contained several innovative features that helped blaze a path for others to follow.

One of these is the debt-for-equity swap, an unusual format in Brazil, which saw Lupatech issue both new notes and shares to bondholders. The shares are worth 15 per cent of the outstanding debt, while the notes represent 85 per cent of the bonds’ value.

The transaction also saw Lupatech inject capital worth 1 billion reais (US$417 million) from the share offering, which was completed when the holders of US$300 million worth of Lupatech bonds received new notes and American depository receipts (ADRs) in exchange for their debt.

The bondholders were advised by Pinheiro Guimarães – Advogados in Brazil and Bingham McCutchen LLP in New York, while Brazil’s Lobo & Ibeas and Jones Day’s Cleveland and São Paulo offices advised legal administration services provider the Garden City Group. Bank of New York Mellon, acting as trustee, was advised by Tauil & Chequer Advogados in association with Mayer Brown, while financial adviser Bank of America Merrill Lynch received counsel from Clifford Chance LLP.

One of the most difficult and immediate hurdles facing the restructuring was getting approvals from bondholders, which were scattered across the world and were virtually untraceable. There was no official record of who the bondholders are, and all lawyers knew was the identity of the bondholders’ nominee banks. But once those approvals had been obtained, Lupatech submitted the consents to the court. It was the first example in Brazil of a company obtaining consents from creditors offshore and using them as proof of approval for a reorganisation.

The case is also a testament to Brazil’s relatively new bankruptcy law, which was passed in 2005. With the restructuring completed, other companies facing similar problems are expected to look to Lupatech’s example. With Brazil in recession, there are a number of companies that have debt issued abroad that need to restructure. Many are likely to find the outcome of this case reassuring.

On solid ground

Mexico’s homebuilders have been badly hit by a change in government policy, leading many to default on bond repayments. Restructuring specialists have stepped up to the plate

Relieving the pressure

A complex restructuring containing several innovative features that looks set to influence restructuring cases in Brazil for years to come

Runners-up



Following a year of negotiations, Advent International, one of the world’s biggest private equity funds, bought a 50 per cent stake in Colombian asset manager Alianza Fiduciaria in a deal that signalled the growing strength of private equity sponsored mergers and acquisitions in Colombia.

Representing the first time a private equity fund of Advent’s magnitude and importance had entered the Colombian financial sector, the deal was also the first step in a strategic alliance between Boston-based Advent and Alianza Fiduciaria’s owner, Delima. The agreement also sees Advent become a shareholder in securities arm, Alianza Valores. Delima is a local investment group that has been developing busi-nesses in a range of sectors in Colombia and elsewhere for the past 60 years.

Alianza Fiduciaria hired Brigard & Urrutia Abogados, while Gómez-Pinzón Zuleta Abogados advised Advent for

the deal. To get the deal through, legal counsel had to conduct extensive due diligence and negotiate the sale and purchase, shareholder and escrow agreements. Furthermore, without a precedent of a private equity fund acquiring a major stake or common control in a regulated entity, a major challenge was obtaining approval from Colombia’s financial superintendency, which oversees financial institutions like Alianza Fiduciaria.

However, while Advent’s acquisition may have been unprecedented within the context of Colombia’s private equity sector, the deal is not the fund’s first private equity-backed acquisition in the country. In early 2014, Advent bought a US$1.1 billion minority stake in Ocensa, which operates Colombia’s largest crude oil pipeline, in a leveraged buyout deal, while three years earlier it also acquired pharmaceutical products distributor Biotoscana Farma. One

of the world’s biggest private equity funds dedicated solely to private equity, Advent operates offices in Mexico City, São Paulo and Bogotá, where it has been operating since 2011. Since its inception, the fund has invested in more than 290 buyout transactions in 39 countries and today has US$32 billion in funds under management.

While signalling a boon for Colombia’s market in general, and Alianza Fiduciaria in particular, the merger also brings substantial benefits for Advent. Alianza Fiduciaria, with over 27 years in the marketis the biggest independent asset manager in Colombia, was also a big catch. Alianza Fiduciaria has managed to consolidate itself as one of the major companies in the fiduciary management services with a portfolio of over US$9 billion of assets under management and a leading position in real estate management.

Advent of an alliance

The tie-up between one of the world’s largest private equity funds and a Colombian asset manager signals the start of a powerful alliance

Privateequity


26

THE TEAMS

WINNERSSale of stake in Alianza Fiduciaria to Advent InternationalCounsel to Advent International• Gómez-Pinzón Zuleta Abogados

Counsel to Alianza Fiduciaria• Brigard & Urrutia Abogados

RUNNERS-UPSale of Maestro to FalabellaCounsel to Sodimac and Falabella• In-house counsel• Linklaters• Grau Abogados

Counsel to Enfoca Inversiones• Cleary Gottlieb Steen & Hamilton LLP• Payet, Rey, Cauvi, Pérez, Mur* * Now called Payet, Rey, Cauvi, Pérez

Abogados

Counsel to JPMorgan• Davis Polk & Wardwell LLP• Miranda & Amado Abogados

***

Sierra Oil & Gas secures fundingCounsel to Sierra Oil & Gas• Norton Rose Fulbright (Venezuela)• Norton Rose Fulbright LLP

Counsel to Riverstone• Vinson & Elkins LLP

Counsel to Infraestructura Institucional• Greenberg Traurig LLP

Counsel to Riverstone and Infraestructura Institucional• Mijares, Angoitia, Cortés y Fuentes SC

Counsel to EnCap• Thompson & Knight LLP

Carlos Urrutia Valenzuela of Brigard & Urrutia



When Sierra Oil & Gas, Mexico’s first independent exploration and production company, secured US$525 million in funding from three private equity funds, it was a sign of how deep an impact Mexico’s energy reforms are having on the sector. After being closed to foreign participation for 75 years, the energy sector is now opening up to private participation. As the first independent oil company to enter Mexico’s uncharted terri-tory, many new entrants will be following in Sierra’s footsteps as they seek to finance their projects.

Energy-focused US private equity firm Riverstone, which was counselled by Vinson & Elkins LLP and Mijares, Angoitia, Cortés y Fuentes SC, and New York-based EnCap Investments, advised by Thompson & Knight LLP, committed US$225 million to the Mexican oil and gas company. Mijares Angoitia, along with Greenberg Traurig LLP, also advised Mexico’s largest infrastructure private equity firm, Infraestructura Institucional, which pledged US$75 million. Norton Rose Fulbright LLP, which gave counsel to Sierra Oil & Gas, had lawyers in three different time zones working on the deal in order to be on call 20 hours each day. All three investors have the option to double their existing commitment once the initial equity has been fully invested.

This private equity investment confirms the much-anticipated interest in Mexico’s oil and gas sector following the reforms, which is transforming the country. Mexico already has a significant industrial base, modern oil and gas framework, well-developed institutions, professional human capital and is one of the most progressive economies in the world.

Sierra had been preparing to launch for several years, in a bid to be ready as soon as the reforms were enacted and it is expected that other companies will be similarly prepared. The company is expected to target exploration, development and production opportunities with the new funds, and is also considering entering into the transportation, storage and processing of hydrocarbons.

While many may have viewed Falabella’s acquisition of Peruvian home improvement store Maestro as a prime example of increas-ing cross-border activity between two of Latin America’s most promising economies, the purchase also made sound, commercial sense for both parties.

Falabella’s Sodimac, which operates a home improvement chain in Peru, paid over US$490 million to acquire Maestro, which is owned by private equity company Enfoca Inversiones. However, because the transaction was structured as a block trade over the Lima stock exchange, what set the deal apart from other acquisitions was the ability of the negotiating teams to close the acquisition in just four days. While this approach is often not possible in other jurisdictions, Peru’s stock exchange rules do not require companies to publicly trade a portion of their stock, meaning Falabella’s lack of shares in Maestro was not an issue. But there were also challenges – completing due diligence within the short time frame proved particularly taxing.

Linklaters in New York and Peru’s Estudio Grau advised Sodimac in the acquisition, while Cleary Gottlieb Steen & Hamilton LLP in São Paulo and Peru’s Payet, Rey, Cauvi, Pérez, Mur advised local private equity fund Enfoca Inversiones, the owners of Maestro. To finance the deal, the parties obtained a US$495 million senior unsecured term loan credit facility granted by JPMorgan, which received counsel from Davis, Polk & Wardwell LLP in New York, Miranda & Amado Abogados in Peru and Chile’s Claro y Cía.

For Falabella, this was the latest move in what has been an aggressive expansion strategy in recent years. Having tradition-ally expanded its businesses organically through joint ventures, 2013 saw it adopt a more aggressive approach by entering Brazil though the US$189 million acquisition of Construdecor. The deal to buy Maestro is Falabella’s largest outside its home jurisdiction, Chile.

Energy independence

Ahead of the growing wave of private capital flowing into Mexico’s energy sector as a result of the country’s historic reforms, this deal, which involved US private equity and Mexico’s first independent energy company, was one of the first out of the starting blocks

Home from home

When Chilean retailer Falabella made moves to purchase private equity-owned Peruvian home improvement store Maestro over the Lima stock exchange, Peru’s capital markets rules allowed the deal to close in just four days and showcased the sophistication of lawyers in both countries

Runners-up


28

When Repsol’s shareholders agreed to drop all their claims in return for a US$5 billion bond package from the government, both sides knew they were making history. Besides bringing to an end one of the highest-profile disputes to be heard in Argentina in a decade, the settlement also represented the first negotiated expropriation deal ever signed by the government. That all this could be achieved far quicker than many expected bears testament to the tenacity and creativity of the lawyers involved.

The reason for the quick settlement was the result of some nimble manoeuv -ring on behalf of Repsol’s lawyers, who adopted a strategy of suing in as many jurisdictions as possible in order to turn the heat up on Argentina and bring them to the negotiating table. Counsel selected the strategy because they believed that if the company were allowed to resort to arbitration before ICSID, proceedings could potentially last 10 years: thus creating considerable uncertainty for the company and preventing it from seeking out other business opportunities in the meantime.

To strong arm Argentina into ne-gotiating, Repsol’s lawyers also adopted the unusual tactic of filing claims in a Madrid court against companies who were contemplating partnering with YPF to exploit the Vaca Muerta shale oil and gas field, such as Chevron and Bridas. They succeeded in persuading the court the three companies had engaged in “unlawful competition”

on the grounds that they were seeking to invest in assets which belonged to Repsol. The Spanish company turned to Freshfields Bruckhaus Deringer LLP, Uría Menéndez, Marval, O’Farrell & Mairal, Severgnini Robiola Grinberg & Tombeur, Weil, Gotshal & Manges LLP, Latham & Watkins LLP, Sullivan & Cromwell LLP and Quinn Emanuel Urquart & Sullivan.

To make the claims, counsel used an innovative interpretation of Spain’s unfair competition law, which prohibits parties from taking advantage of illegal activity in the market. Although the partner-ships would take place in Argentina, the lawyers successfully persuaded the Spanish judge that the court had jurisdiction to take on the case because the oil and gas market has a global scope and would therefore affect Spain.

Making matters more complicated was the involvement of the Argentine government and strong influence it had on local media coverage. Therefore, legal teams not only had to consider the legal implications of their actions, but also take into account any potential political sensitivities; given the importance of relations between the two countries. However, despite these obstacles, legal counsel was able to help YPF and Repsol reach an agreement and sign a historic agreement.

Representing the first time an expropriation in Argentina has been resolved in a negotiated deal, Repsol agreed to drop all claims related to

the expropriation, including a case brought before ICSID under the Argentina-Spain bilateral investment treaty. This claimed that the temporary occupation of Repsol’s shares in YPF and all related shareholder decisions, including promotional measures adopted by Argentina aimed at allowing YPF to partner with third parties had been unconstitutional, given that the state is required to compensate companies for expropriations in advance.

Despite seeking damages worth US$10.5 billion, Repsol agreed to a bond package that was half that amount. To pay the dissenting shareholders, a bond transfer was administered through four separate issuances selected for their high liquidity, differing maturity dates and potential for high market value. The notes were also chosen to enable Repsol to monetise them as quickly as possible and avoid the risk of potential attachment by holdout creditors from the country’s 2001 debt default.

While bringing to an end a case that has played out over two years, the settlement also signals to investors that Argentina is willing to take a softer stance towards foreign companies than it has over the past couple of years. For lawyers, it also offers a new archetype in terms of the legal framework that can be used for expropriations in the country. With elections just around the corner, some will be hoping it won’t be needed.

Bonds that bind

Argentina’s government seized control of YPF from Repsol in 2012 and the ensuing litigation looked like it could drag on for a decade or more. But thanks to adept handling by the Spanish energy company’s legal counsel, both sides were able to reach a settlement barely two years later

Disputes



THE TEAMS

WINNERRepsol vs ArgentinaCounsel to Repsol• In-house

counsel – Luis Suárez de Lezo Mantilla, Miguel Klingenberg Calvo, Enrique Hernández Pérez, Iñigo Alonso de Noriega, Teodoro Marcó,Ignacio del Cuvillo, Pablo Blanco, Javier García-Rubio, Patricia Alcol Perez and Paz Olazabal Zamora

• Freshfields Bruckhaus Deringer LLP

• Uría Menéndez• Marval, O’Farrell

& Mairal• Severgnini

Robiola Grinberg & Tombeur

• Weil, Gotshal & Manges LLP

• Latham & Watkins LLP

• Sullivan & Cromwell LLP

• Quinn Emanuel Urquart & Sullivan

Counsel to Argentina• Procuración del

Tesoro de la Nación in Buenos Aires

RUNNERS-UPChinese arbitration award caseCounsel to Great Harvest International Investment• Rodrigo, Elías

& Medrano Abogados

Counsel to Shougang Corporation• Miranda & Amado

Abogados

***

Brazilian credit rating class actionCounsel to Boa Vista Serviços• Mattos Filho,

Veiga Filho, Marrey Jr e Quiroga Advogados

Counsel to Serasa• Sergio Bermudes

Advogados

Enrique Veramendi, Santiago Carregal and Ricardo Ostrower of Marval, O’Farrell & Mairal

Sergio Galvis of Sullivan & Cromwell LLP

Gustavo Topalian of Freshfields Bruckhaus Deringer LLP

Luis Acuña of Uría Menéndez


30

When Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados and Sergio Bermudes Advogados helped Boa Vista Serviços and Serasa Experian reach an agreement with a group of customers dissatisfied with the lack of transparency in the sector, lawyers knew the outcome would have profound implications for the whole industry.

Customers of Boa Vista and Serasa Experian claimed there was no transparency regarding the criteria adopted by the credit rating agencies to calculate their probability of default. They also argued it was unlawful they had not been informed their data had been registered onto a new database model. However, with the case taking place against the backdrop of 250,000 lawsuits seeking compensation for moral damages from several companies, a successful complaint had the potential to cost the sector billions.

Due to the huge implications and high-profile of the case, the Superior Tribunal of Justice decided to hold the first public hearing in its history. Finally, after about a year of hearings, the tribunal accepted the arguments of legal counsel that the system did not cause moral damages because sensitive data was not used, and permitted the companies to continue using their credit rating system. The Central Bank has previously voiced its support of the credit-rating system, arguing that it helps lower interest rates by allowing banks to better select to whom they lend.

Although the court ruled that lenders must explain how they determine a potential customer’s credit rating and also permitted customers to sue banks if information used to rate their credit is outdated, the decision was widely viewed as a resounding success for the industry. By one estimate, the amount saved by companies by avoiding potential lawsuits could reach US$2.5 billion – a significant achievement by legal counsel by any measure.

With growing numbers of East Asian investors coming to Latin America and often investing in a small handful of sectors, it is perhaps inevitable that some agreements will end in dispute proceedings. However, when state-owned steel company Shougang Group tried to block the previously agreed sale of its shares in a Peruvian mine to China’s Great Harvest Investment, legal counsel found themselves drawn in to a complex dispute involving aspects of Peruvian and Chinese legislation, and the Latin America country’s stock market legislation.

The conflict arose after the value of shares in a Peruvian mine substantially increased between the time of purchase and the time when they were to be handed over. As a result, Shougang hired Miranda & Amado Abogados to oppose the sale, alleging that the contract had not been formally agreed, and was only at pre-contract stage.

Great Harvest, which was advised by Rodrigo, Elías & Medrano Abogados, subsequently sued Shougang in a Chinese arbitration court, which ruled in its favour and established that there was a valid purchase contract. Shougang then counter-sued, stating that there was no cause to recognise the arbitral award in Peru since it had been handed down in China.

Taking some by surprise, when the case was heard by a Peruvian court it upheld the Chinese arbitration award, arguing that the Peruvian state has the obligation to recognise foreign awards. The decision represents the first proceeding for the recognition of a Chinese arbitration award under a treaty signed between Peru and China in 2012 on judicial assistance in civil and commercial matters. It was a case in which even the Peruvian government intervened – to ensure that the treaty was upheld. With East Asian investors continuing to view Peru as an attractive investment destination, some will have watched the outcome of the case with particular interest.

Credit where credit’s due

A class action by customers against two credit rating agencies had the potential to cost the industry billions until legal counsel struck an unprecedented settlement

Way of the dragon

When Shougang Group argued that a ruling awarded by a Chinese arbitration court did not apply in its dispute with another Chinese company over mining assets in Peru, legal counsel faced difficult questions about the strength of international treaties and which jurisdiction should take precedent

Runners-up



Apart from a purchase price of US$3.4 billion, which made the deal the largest to date in Brazil’s private education sector, the merger between Kroton and Anhanguera was significant for creating the world’s largest for-profit education company. For legal counsel, the types of companies also posed some thorny legal challenges.

A particularly unusual aspect of the merger was the absence of controlling shareholder blocks on the boards of Kroton and Anhanguera, both public companies. This made it more difficult to ascertain in advance of drafting the documents how the shareholders would feel about the deal. It also meant there was not a single point of contact that would help lawyers to gauge what exchange ratio would be acceptable to both companies.

A further challenge was the scale of the two companies themselves. Kroton and Anhanguera, which together have one million students in higher and professional education on their books, represent the two largest private education providers in Brazil. Legal counsel – Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados for Anhanguera and Barbosa Müssnich & Aragão for Kroton – knew obtaining regulatory approval for the merger from CADE would prove the greatest

hurdle in getting the deal through. For both firms, the competition authority’s limited experience analysing mergers in the distance-learning market was a particular concern.

Despite deciding to analyse the distance-learning sector in the same way as on-campus education courses, CADE was initially unclear which geographical perspective it should adopt. Particularly vexing was whether distance-learning courses should be considered nationally, due to most course materials being online, or locally, because of stipulations on some courses that exams be sat at a physical location or the student attend a certain number of tutorials.

For antitrust counsel, this meant gathering huge quantities of data and checking for any overlap between courses offered by Kroton and Anhanguera under the three differ-ent geographical scenarios. Lawyers therefore had to painstakingly analyse each course offered by both companies in every city in Brazil where they operate – a task that revealed 340 markets where distance-learning graduate courses overlapped.

With three months to go, CADE was becoming less optimistic about whether the parties would be able to put in place a remedy that would address their concerns in time. Legal

counsel knew that to give the merger the best possible chance of winning approval they would need to establish a good working relationship with the antitrust counsel. To this end, lawyers from both sides entered into discussions with CADE to arrive at a package of solutions that would satisfy its concerns.

The result was four separate pack-ages being submitted to the competition authority; the last being the outcome of two weeks of intense discussion until a day before the final hearing was due to take place. All combined structural and behavioural commitments that were carefully designed to address the competition concerns without beaching the strict regulatory rules that govern the Brazilian education sector.

With the end in sight a final hurdle was to appease Kroton’s minority shareholders, by renegotiating previ-ously agreed stock swap options in order to reflect the greater increase in the value of Kroton’s shares compared with Anhanguera’s that had occurred during the previous 11 months. Fittingly for a deal involving Brazil’s two biggest education companies, Kroton and Anhanguera’s merger has a lot to teach both the sector and Brazil’s legal community as a whole.

Learning lessonsThe merger between Brazil’s two largest private education companies was a fiendishly complex transaction that had few precedents

Regulatory


32

THE TEAMS

WINNERKroton and Anhanguera mergerCounsel to Anhanguera Educacional Participações• In-house counsel – Khalil Kaddissi• Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados

Counsel to Kroton• In-house counsel – Leonardo Augusto Leão Lara• Barbosa Müssnich & Aragão

RUNNERS-UPTGS notes exchangeCounsel to Transportadora de Gas del Sur• In-house counsel• Marval, O’Farrell & Mairal• Sullivan & Cromwell LLP

Counsel to Citigroup Global Markets, JPMorgan Securities Citicorp Capital Markets and JPMorgan Chase Bank National Association, Sucursal Buenos Aires• Tanoira Cassagne Abogados• Milbank, Tweed, Hadley & McCloy LLP

Counsel to Law Debenture Trust Company of New York• Thompson Hine LLP

***

Gas Natural Fenosa vs ASEPCounsel to Empresa de Distribución Eléctrica Metro-Oeste, subsidiary of Gas Natural Fenosa• Galindo, Arias & López

Counsel to ASEP• Procurador de la Administración

Paulo Cezar Aragão, Francisco Müssnich, Barbara Rosenberg and José Carlos da Matta Berardo of Barbosa, Müssnich & Aragão

Sergio Spinelli Silva Jr, Hiram Bandeira Pagano Filho and Lauro Celidonio Gomes dos Reis Neto of Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados



When Panamanian electricity company Empresa de Distribución Eléctrica Metro-Oeste (Edemet) appealed a sanction imposed by ASEP, the sector’s regulatory agency, in the case was hailed as a landmark case in Panamanian legal history.

Never before had a sanctioning process of this nature reached the Supreme Court of Justice – posing substantial challenges for legal counsel. Within the sector, the outcome set a new precedent in defining a distributor’s obligation to guarantee power supply. Edemet, subsidiary of Gas Natural Fenosa, hired Galindo, Arias & López to appeal the sanctioning process.

The case stretches back to 2012, when ASEP imposed the maximum sanction of US$1 million on the electricity company after claiming Edemet had failed to comply with its obligations as official electric power distributor for Panama. Specifically, it argued that the energy supplier had reneged on its obligation to guarantee power supply by buying energy from third parties.

Edemet then appealed the sanction, in a case that made it to the Supreme Court of Justice – a first for a sanction appeal. The court declared the sanction to be null, and in so doing set a precedent for electricity providers in the country.

Several elements in the US$251 million notes exchange by Argentina’s Transportadora de Gas del Sur (TGS), the largest natural gas transportation company in Latin America, could have led to the transaction not going ahead.

One was Argentina’s recently enacted capital markets law, which not only made TGS the first company to launch an issuance under the new rules, but also made the transaction particularly complex due to the increased scrutiny from the authorities. The New York and Washington, DC offices of Sullivan & Cromwell LLP and Argentina’s Marval, O’Farrell & Mairal advised TGS for the deal, while Tanoira Cassagne Abogados in Argentina and Milbank, Tweed, Hadley & McCloy LLP and Thompson Hine LLP in New York advised the placement agents and dealer managers.

Another aspect was the short time frame in which the transaction had to be completed: driven by concerns the Argentine market would deteriorate to such a point as to render the transaction impossible. These fears were fuelled by President Cristina Fernández de Kirchner’s devaluation of the peso and announcement the government would be lifting restrictions on buying dollars – a move which tends to devalue a currency further.

Further regulatory hurdles arose from the cross-border nature of the deal. Complex foreign exchange central bank regulations had to be analysed by legal counsel and complied with. The success of this notes exchange sets an important precedent for all local companies that have a significant part of their debts in foreign currency or with debt issued and placed in different jurisdictions. The fact that any of the obstacles faced by TGS could have prevented the issuance from taking place bears witness to the adept handling of legal counsel on all sides.

Power games

An appeal against a sanction imposed on an electricity company in Panama set a new precedent by reaching the country’s highest court

A race against time

With currency devaluation, a new capital markets law and adverse market conditions impacting a notes issuance by Latin America’s largest natural gas transportation company, legal counsel had to work fast to ensure the transaction was a success

Runners-up


34

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INDIVIDUAL LAWYER OF THE YEAR AWARDS


Ary Oswaldo Mattos Filho is one of Brazil’s most respected lawyers and has become a household name in Latin American legal circles thanks to the eponymous law firm he helped found in 1992. Under his careful stewardship, Mattos Filho developed into one of the region’s legal powerhouses, managing the rare feat of excelling in the breadth of its service offering and quality of its transactional lawyers. Ever a believer in modernisation, Ary Oswaldo realised early on the importance of having effective mechanisms to ensure a successful transition and was instrumental in implementing by-laws requiring partners to sell their shares in the firm once they reach 60.

Alongside building one of Brazil’s top-tier law firms, Ary Oswaldo is renowned for helping to modernise the country’s legal education system. The Direito GV was founded by Ary Oswaldo 15 years ago and is now one of the country’s leading law schools with each graduate receiving an average of four job offers. The school’s innovative approach, including employing full-time professors and giving students practice-oriented coursework, have helped it stand

out from the crowd and influenced the development of legal education in other universities in Brazil.

Carlos Urrutia Valenzuela’s appointment as ambassador to the US in 2012, as well as his membership of the panel at the International Centre for Settlement of Investment Disputes, indicates the high standing of the former Brigard & Urrutia partner, not just in his home country of Colombia, but across the region as a whole. Urrutia demonstrated his commit-ment to public service early on in his career with roles as secretary general and secretary of finance of the Cundinamarca governorship. He followed this up by going into private practice at Brigard & Urrutia, his father’s law firm, in 1977.

Now almost 40 years since he began working at the firm, 13 of which he spent as its managing partner, Urrutia has crafted a reputation as an expert strategist with a head for business. Peers and clients alike also praise his encyclo-paedic knowledge of Colombia’s business environment – much of it gained as a board member of several of Colombia’s leading companies.

Ary Oswaldo Mattos Filho Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados

Carlos Urrutia ValenzuelaBrigard & Urrutia Abogados

Lifetime Achievement Awards

Ary Oswaldo Mattos Filho

Carlos Urrutia Valenzuela


36

Now three years into his tenure as the firm’s managing partner, Rodrigo Prado has consolidated Rodrigo Elías’ posi-tion at the apex of Peru’s legal market, demonstrating that the firm has the right set-up to ensure smooth successions for years to come.

But Rodrigo Prado has done more than just maintain the status quo. Peru’s legal market is notoriously competitive and firms must be willing to adapt if they are to thrive. Luckily for Rodrigo Elías, Rodrigo Prado has proven

extremely decisive, implementing a series of bold initiatives to ensure the firm’s continued success.

These include reforms to the manage-ment structure and measures to elevate the roles of junior partners, thus increas-ing the firm’s ability to retain talent. This has been accompanied by moves to strengthen strategic growth areas, such as energy, tax and white-collar crime, while the firm is also set to establish a stand-alone fishing practice.

With over 30 years’ experience advising clients worldwide, Sergio Galvis has been able to build a reputation as a specialist in Latin America, and is widely regarded as a global authority on international mergers and acquisitions.

He is the most prominent name in one of the region’s most prestigious M&A practices and is regularly involved in multibillion-dollar deals. Most recently this has included advising US mobile

phone carrier AT&T on its US$2 billion acquisition of NII Holdings’ Mexican wireless business, Nextel.

But Galvis is not just limited to M&A work – he also has a high-profile practice in project finance and infrastructure, as well as banking and finance, and is considered an expert in sovereign debt restructuring, for which he has won numerous awards.

Luis Carlos Rodrigo Prado

Rodrigo, Elías & Medrano Abogados

Sergio Galvis

Sullivan & Cromwell LLP

Law Firm Leader of the Year

International Lawyer of the Year



Martin Zapiola Guerrico wins acclaim across Latin America for his dedication to pro bono work – not least because of his instrumental role in setting up one of the region’s first clearing houses, the Comisión de Trabajo Pro Bono e Interés Público, in 1999. Since then, the commis-sion’s ranks have swollen to 20 members, including some of the country’s leading firms. Zapiola says the organisation’s efforts have also helped make pro bono work far more institutionalised among its member firms, with many establishing their own pro bono coordinators to expand and improve its practices.

Alongside the substantial commitment required to promote pro bono practices

within Argentina’s legal community, Zapiola still finds time to undertake pro bono work himself, and has built a reputation as a fearless litigator willing to take on the establishment. He is also committed to pushing for greater transparency among Argentina’s state and federal institutions and has had some success in implementing structures that require senators to disclose their earnings. But this is not a battle he can fight alone, and he says he is keen to enlist the sup-port of independent practitioners and law firms outside the capital, where officials’ accounts are particularly murky.

In 2014, Claudia Prado became the first female lawyer to head Baker & McKenzie LLP’s Latin American regional council, stepping down from her role as managing partner at Brazil’s Trench, Rossi e Watanabe Advogados, which has a cooperation agreement with the US firm.

Prado is widely praised for her efforts to promote the role of women within the legal profession, being named one of Latin Lawyer’s “Inspiring women in law” in 2013 and a “Leading women executive in Brazil” in 2010 by business publication Valôr Economico. Alongside her new role as head of Baker & McKenzie’s Latin American regional council, she chairs the

firm’s diversity and inclusion committee, where she has introduced a number of targets to ensure more women enter the profession.

Beyond Baker & McKenzie, Prado has built a profile in the legal community for her efforts to encourage diversity within other firms, by giving presentations to partners and associates during visits to other firms. Much of this drive can be attributed to her first-hand experience of the pressures involved in balancing a career and family, exemplified by her decision to take the new role at Baker & McKenzie only after her children had grown up and left home.

Claudia Prado

Baker & McKenzie LLP

Pro Bono Lawyer of the Year

Diversity Initiative Award

Martin Zapiola Guerrico

Zapiola Guerrico & Associados


38

Instituto Pro Bono (IPB)Established in 2001, the IPB has spent the past 14 years campaigning to put Brazilian law firms’ pro bono efforts on an equal footing with firms in other Latin American states. Until last year, Brazilian bar association rules meant that only firms in São Paulo and Alagoas were able to provide pro bono advice, and then only to non-profit organisations. However, while the Ordem dos Advogados do Brasil (OAB) relaxed the rules to allow law firms and independent practitioners across the country to provide free legal services to individuals and other entities, the current injunction is only preliminary. Consequently, the IPB will continue lobbying the OAB until the rule is set in stone. “In the last year I have travelled the whole of Brazil talking to members of the bar’s board, trying to convince them that they should put the resolution to a vote as soon as possible. I delivered that message and I expect the decision to come in April or May,” says IPB executive director Marcos Fuchs.

The OAB has long resisted the IPB’s efforts to allow lawyers to provide pro bono services by raising concerns about how the move could affect lawyers in the country who make their living from state-provided legal aid commissions. Brazil’s constitution guarantees free legal assistance to poor citizens, and so state governments employ private lawyers to help provide that service. But while the OAB has voiced fears that allowing law firms to do the same would take away these independent lawyers’ source of

income, Fuchs has another theory about why the OAB was reluctant to make big changes last year, and points to elections for the state and federal bar association scheduled for later this year, which he says may be drawing the organisation’s focus: “They think that at this moment we have a preliminary injunction and that they don’t need to make a decision right now,” he adds.

Fuchs is confident that when the OAB eventually does hold a vote, it will yield a positive answer. He believes that pro bono is becoming increas-ingly institutionalised in the country, something evidenced by the standing of the attendees at a recent meeting hosted by IPB member firm Pinheiro Neto Advogados at the end of last year. In attendance were São Paulo state bar president Marcos Da Costa, former minister for justice Miguel Reale Jr and head of prestigious law school FGV, Oscar Vilhena. “This was the first time ever that the president of the state bar association in São Paulo had engaged in a pro bono meeting: that is unbeliev-able,” says Fuchs. “If we continue to involve big law firms with IPB, many other law firms will join. These large firms are a very important mechanism to persuade the bar association,” he adds. The organisation is continuing to recruit leading firms to its cause, adding Machado, Meyer, Sendacz e Opice Advogados and Campos Mello Advogados as members in 2014.

The IPB was the recipient of funds from last year’s Deal of the Year awards.

That money was used to help fund activities relating to one of the IPB’s main projects of 2014, when it spent six months providing legal services to a low-income community in Bela Vista, São Paulo. Lawyers advised people on civil, labour and family law, and consumer rights matters. “We want to repeat that this year, but this time we don’t just want to help downtown São Paulo, we want to go to the outskirts of the city,” says Fuchs. The organisation is currently trying to source funding from three US-based grant-makers and a Brazilian, family-owned funding group, but it also asks member law firms to make donations.

Fuchs and his team have a busy 2015 ahead: the IPB will hold a one-day colloquium on pro bono in Brazil on 27 March that will feature a workshop providing lawyers with tips about how to approach pro bono work and will see NGOs present their experiences of employing lawyers on a pro bono basis. It also hopes to collaborate with FGV again in September, to hold a confer-ence to discuss the state of pro bono in general across Latin America; with a particular focus on women’s rights and indigenous issues, and encouraging university students to become involved with the IPB. “Honestly, last year was a great moment for pro bono in São Paulo,” says Fuchs. “We started conversa-tions with many law firms and we are still fighting for a decision on pro bono in Brazil.”

Latin Lawyer’s ninth annual awards ceremony was held in aid of three of the region’s pro bono clearing houses, including Brazil’s Instituto Pro Bono, Fundación Barra Mexicana and Fundación Pro Bono Chile

The clearing houses



Fundación Barra MexicanaSince its inception, Fundación Barra Mexicana has sought to provide some of Mexico’s most disadvantaged individuals with legal advice. Like many clearing houses, the foundation aims to achieve this by providing a matchmak-ing service for lawyers and those in need of free legal services. Over the last 15 years, and despite many leading Mexican firms only recently beginning to institutionalise best-practices in pro bono work, there are signs it is slowly starting to achieve its goal.

Representative assignments include collaborations with the Junta de Asistencia Privada del Distrito Federal and the Centro Mexicano para la Filanotropía, both NGOs, to provide all their legal needs. Previously, both organisations relied on a small number of in-house lawyers. On the govern-ment front, a recent agreement with the Mexican Internal Revenue Service will see them advise NGOs on their tax status, while looking to the future the foundation is currently involved in discussions to set up legal aid clinics across Mexico.

The appointment in 2012 of Daniel del Río as the foundation’s president also seems to be reaping rewards, with the Basham, Ringe y Correa partner ushering in a raft of reforms which

have streamlined the foundation. “Del Río identified aspects of the work that weren’t as good as we would like and restructured the foundation to make it work better,” says Julio Copo, the secretary of council for the foundation. A move to digitalise all the organisa-tion’s files is cited by Copo as being particularly beneficial.

The foundation’s marketing has also significantly improved under Del Río – it has made better use of its magazine to publicise its pro bono efforts and the projects it undertakes and delegates from the organisation now regularly give presentations at law firms. The aim is to raise awareness of pro bono work among the country’s lawyers.

The foundation has also been working hard to encourage law firms to sign up to the Cyrus R Vance Center for International Justice’s Pro Bono Declaration for the Americas, which commits firms to providing at least 20 hours of free legal services per year.

Its efforts appear to be paying off: Latin Lawyer’s latest pro bono survey shows that Mexican firms are increas-ingly institutionalising the practice of pro bono and report a broad range of work – far beyond general corporate matters. Environmental, anti-corruption, education, labour, human rights and

immigration matters are all cited as areas they work in. “Before, pro bono used to be based on the goodwill of the attorney, but now firms are starting to understand that they can be agents of change,” says Copo. “What is more, cli-ents are becoming interested in a firm’s pro bono credentials. These factors are definitely driving the institutionalisation of pro bono work in Mexican firms.”

However there is still a long way to go. One aspect the foundation would like to change is funding. Currently, the organisation relies on donations to survive, but the foundation is keen to adopt a model whereby firms pay to be members. “The idea is to minimise the cost for the bar, and to spread it across the firms”, says Copo. This kind of model is already in place in jurisdic-tions across the world, including fellow Latin American countries Chile and Colombia.

Despite the many challenges pro bono still faces in Mexico, the founda-tion is keen to stress that much progress has been made and that the future is bright. Beyond anything else, Copo believes pro bono offers lawyers, who are among the most privileged people in Latin America, a unique opportunity to give back to society.

Daniel del Rio of Mexico’s Fundación Barra, Marcos Fuchs of Brazil’s Instituto Pro Bono and Marcela Fajardo and Ciro Colombara, both of Chile’s Fundación Pro Bono


40

Fundación Pro Bono Chile Established in 2000, Fundación Pro Bono Chile was set up to increase access to justice for disadvantaged Chileans by promoting pro bono practice within the country’s law firms. Since then, it has not only coordinated the provi-sion of legal assistance to numerous organisations and individuals, but also regularly organises training programmes for lawyers, and is one of a handful of clearing houses in Latin America whose members consistently log volunteer hours and pay annual member fees.

Much of the foundation’s success can be attributed to its focus on four courses of action: promoting pro bono practice among the legal community, organising the legal service provided by its member law firms, mediating between the needs of the clients and the law firms, and aggressively publicis-ing law firms’ pro bono contributions.

Consequently, Chilean firms now take on a broad spread of pro bono cases, with work for institutions making up the bulk of their workload. In line with the growing trend in other Latin American countries, the foundation also takes on a significant proportion of cases for individuals alongside assisting institutions. Projects currently being pursued by member law firms include giving tax, labour and commercial ad-vice to micro-entrepreneurs; providing assistance to victims of discrimination and violence – domestic or otherwise;

and acting on the behalf of the under-privileged in arbitration cases.

The foundation is also involved in a number of projects pushing for greater transparency in Chile’s public and private institutions. One of these pro-jects aims to enshrine in the country’s constitution the right to access public information. Another is the Open Government Partnership, a voluntary initiative seeking to promote the use of new technology to strengthen govern-ance and fight corruption.

An ongoing project for the founda-tion is the “Pro Bono Challenge”, a competition that invites law students across Chile to pitch pro bono projects to the foundation. The winners are then given the opportunity to run the project under the guidance of a member law firm. Now in its third year, the latest round saw 70 submissions, three of which won financial backing to carry out their projects.

Chile has long been ahead of the pack when it comes to pro bono work and the country’s legal community continues to be one step ahead of the rest of the region. Member law firms are on course to hit the Pro Bono Declaration for the Americas’ target of a minimum of 20 hours of free legal services per year, with 63 per cent of firms averaging 10 to 29 pro bono hours per lawyer per year, and numbers are rising, according to Latin Lawyer’s

latest pro bono survey.Many have been able to achieve

these high levels because pro bono work has been successfully institu-tionalised within the country’s law firms; a feature Fundación Pro Bono Chile has actively sought to encourage. All emphasise the importance of the pro bono practice from day one and the vast majority of firms include pro bono efforts in their lawyers’ evaluation. Pro bono coordinators and committees are also commonplace and ensure the system is maintained with a formal procedure for approving pro bono work. Firms also keep track of what they are doing with a formal mechanism for measuring pro bono and a growing number have a pro bono manual available for staff.

Despite this success, the foundation guards against complacency. One area where Chilean firms could improve is partner participation, with many firms reporting that the majority of partners do not meet the PBDA requirement of 20 hours a year. Ultimately, though, the foundation should be rightfully proud of its success. As Tamara Gutierrez, a coordinator at the foundation puts it: “It has taken a lot of work from the foundation and also from the member law firms, but Pro Bono now has a very strong profile in Chile.” This can be an inspiration to the rest of the region.

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