/ La Polar Pitches Chilean Stock Sale to Avoid Second Bankruptcy Since 199922 June, 2011
“There is a risk of bankruptcy,” said Raul Montero, a partner at law firm Alessandri & Cia in an e-mailed response to questions.
Chilean law allows a company to continue operating and be sold as a whole within two years of declaring bankruptcy, Montero said.
La Polar declared bankruptcy in 1999 before the retailer was acquired by private equity firmSouthern Cross Group. Southern Cross listed the company’s shares in 2003 and sold its remaining stake in 2006. Today La Polar has no clear controlling shareholder as all of its shares trade freely.
Chilean pension funds, known as AFPs, requested a freeze of La Polar’s expansion plans, an end to executive stock options and clarification on what the money will be used for as conditions to approving the share sale, financial daily Diario Financiero reported yesterday, citing people familiar with the negotiations that it did not identify.