The opinion of the court was delivered by: Richard Owen, United States District Judge
Plaintiff Compania Embotelladora Del Pacifico, S.A. (hereafter CEPSA), a Peruvian bottling corporation, in Lima, Peru was owned and operated by members of the Heredia family since its formation in 1952 until November 19, 1999, when it fell on hard times and creditors put it in involuntary liquidation under Peruvian Law. It had a bottling contract with defendant Pepsi Cola Company. In Peru, when a company enters into liquidation, a Liquidator is appointed who completely supplants the owners and operators.*fn1 Essentially the Liquidator, on behalf of the creditors, is to take inventory, establish the extent of the company's capital, deal with payables and receivables ("credits"), and assume such commitments as are appropriate to wind down and close the business. General Companies Law Article 416. Peru's Capital Restoring Law, Article 77, in accord with the foregoing provides that the "attributes and authorities of the Liquidator" are essentially to safeguard the interest of insolvent estates, to dispose of its property while further providing that the Liquidator may "provisionally" continue the business "as agreed by the Meeting of Creditors" (emphasis supplied). A Liquidator under said Article 77 is specifically given the power to file criminal complaints with the prosecutor's office if fraudulent acts of management or fraudulent bankruptcy shall appear "which fact, shall be made known to the meeting creditors." The Liquidator is not anywhere, however, specifically given the power to file civil actions absent a majority vote of the creditors' interests at a full Meeting of Creditors at which a quorum is present.*fn2 This requirement is in sensible accord with a liquidation situation, where a Liquidator must consult with the creditors before filing a civil action that may put creditors' interests at further risk of loss from major litigation expense, or successful counterclaims, or other unexpected drains on an already damaged estate.
Against this background, some eleven months after the filing for liquidation and dissolution, it appears that Liquidator Cabrerizo was "invited" to a meeting or conferences with members of the Heredia family without notification to anyone else and, with their personal urging and personal financing, caused the instant extensive $300,000,000 complaint to be "secretly"*fn3 prepared in New York and "secretly" filed in this Court on Wednesday, October 11, 2000. The following day, Thursday, there was a meeting in Lima, Peru of the Committee of Creditors of the plaintiff. Two of the three creditors of the Committee were present, Banco Latino and Banco Continental, together with Liquidator Cabrerizo. On the agenda prepared by the Liquidator was the "Proposal to retain attorneys for PEPSICO INTERNACIONAL lawsuit." Liquidator Cabrerizo told the two banks, according to the minutes of the meeting, that he had not only been "invited" to the meeting with the Heredias but they told him of the "possibility" of filing legal action against PEPSICO INTERNACIONAL, that the filing of the complaint "must be done secretly" and that INDECOPI, a quasi governmental board, with supervisory powers in bankruptcy cases would request a date for meeting of all creditors to consider "Retaining a Law Firm for PEPSICO INTERNACIONAL Lawsuit." Obviously, all of these statements speaking of future actions were false, for the action had been in fact filed the day before at the instigation of and with the financing of the Heredias. As observed earlier the Heredias, as ousted owners and operators had no power to start any lawsuit and the Liquidator had no authority to commence the action without consent of the majority at a meeting of all creditors.*fn4 The Committee of Creditors, being of the erroneous belief that nothing had yet been filed, asked the Liquidator to make a presentation of the "possibility and costs of that operation" and they would "call a Meeting of Creditors to take a final decision." It was also agreed, the minutes show, that the Committee was going to "analyze the prestige" of New York counsel it was told would be undertaking the lawsuit.
Next, however, at an expanded Meeting of Creditors on November 16, 2000, a month and a half later, Liquidator Cabrerizo now told the meeting that in fact the complaint had been filed before the prior meeting and that this had been necessary because of "the need to act rapidly and secretly . . ." and that he had "taken the decision to sign an agreement with [New York counsel] to file the complaint in the appropriate manner."*fn5 Liquidator Cabreizo also "clarified that if the Meeting of Creditors decided not to continue with the proceeding, the agreement contained an unconditional termination clause . . . and that . . . a decision could be taken to abandon the complaint without any specific reason."*fn6 The creditors wanted information on the New York law firm and details on the complaint, and agreed to evaluate the proposal and make a decision at a subsequent meeting of the expanded Committee which took place on December 1, 2000. At that meeting, at which a quorum of the creditors' interests were present, two votes were taken on whether the question of the "continuation" of the proceeding should be delayed to a new meeting. Even these procedural votes failed, not mustering a majority of the creditors' interests present.
The next relevant event was on March 30, 2001, where at a Meeting of Creditors of almost 80 percent of the creditors' interests, and a quorum being present, there were presentations from both Liquidator Cabrerizo*fn7 and a representative of PEPSICO, both being extensively reported in the minutes of the meeting.*fn8 In any event, a vote at that meeting fell short of the majority needed to even authorize taking a vote on the continuation of this action, there being only 48 percent of creditors' interests in favor.
Accordingly on July 11, 2001, a duly constituted Creditor's Committee met*fn9 and taking note of the fact that this action against PEPSICO had twice failed confirmation before a full Meeting of Creditors, the Committee voted to advise the Liquidator that the action was no longer supported nor was it to be continued. I note that this was what the Liquidator had told the creditors on November 18, 2000 they had a right to do and it had happened, and that, I conclude now, was the end of it.
In sum, this action was unauthorized. The Liquidator did not have the authority to commence it, and the creditors on July 11, 2001 declared it at an end.*fn10
Accordingly, the motion to dismiss is granted.
So ordered. A formal order may be submitted on notice if ...