June 17, 2019

Brazilian engineering and construction company files for bankruptcy

On June 17, 2019, Odebrecht S.A. informed investors that it had filed for bankruptcy.  The company attributed the bankruptcy in part to an economic downturn in the countries in which it operates, but it also stated two additional reasons: (1) the reputational harm the company suffered as a result of its FCPA and similar anti-bribery settlements and (2) “the challenges faced by companies that cooperate[] with the authorities to once again be able to take out loans and compete for service contracts.”  
In 2016, Odebrecht entered a global settlement with US, Swiss, and Brazilian authorities for over $2.5 billion.  Since then it has settled bribery and corruption charges with five additional countries.  According to Odebrecht’s press release, several Odebrecht Group entities, including Braskem S.A., are not included in the scope of the court-supervised reorganization.

Odebrecht press release