Suspension of SanCor Cheese Auction Amid Legal Proceedings

SanCor's Cheese Auction Halted

A planned auction for over 400 metric tons of cheese from the dairy company SanCor has been abruptly suspended. The judicial decision to open preventive bankruptcy proceedings for the Sunchales-based cooperative in Argentina serves as the primary reason for the halt. The court mandated that no judicial actions should benefit any creditors over others due to outstanding debts.

Legal Rationale

The auction was initially set at the behest of IIG Structured Trade Finance Fund Ltd, an investment group seeking to enforce a credit guarantee against SanCor. The plan was to sell off 436,922 kilograms of cheese held in storage in the cities of Gálvez and La Carlota.

However, a ruling from Judge Guillermo Adrián Vales of the 4th Nomination Civil and Commercial Court of Rafaela ensures no legal actions can proceed against SanCor's assets, effectively freezing judicial measures related to debts declared before the initiation of the bankruptcy process on February 3, 2025.

Background of Financial Distress

SanCor has been grappling with financial difficulties for over a decade, with a significant downturn last year. Efforts to forge agreements with investors fell through, compounding its struggles to enhance daily milk production, now down to 170,000 liters a day.

Shortly after the judicial summer recess, the cooperative filed for its own preventive bankruptcy to restructure approximately $250 million in liabilities. SanCor aims to emerge more robust from these difficulties, while a recent extraordinary assembly showed unanimous support from its members for this course of action.