Brazilian Firm Ambipar Files Bankruptcy in Texas Amid Credit Market Struggles

Ambipar, a Brazilian environmental management company, has filed for bankruptcy protection in Brazil and its subsidiary, Ambipar Emergency Response, has filed for Chapter 11 bankruptcy in Texas amid a series of financial and governance challenges. The parent company's bankruptcy filing aims to ensure operational continuity, preserve value and jobs, and protect shareholder interests following irregularities in swap transactions and the abrupt resignation of its former CFO, which undermined market confidence. Ambipar's financial crisis was exacerbated by a contract novation with Deutsche Bank, which resulted in significant margin calls, despite the company holding substantial cash reserves earlier in the year. The subsidiary listed liabilities between $100 million and $500 million, with assets estimated between $1 billion and $10 billion. The filings come amid a broader context of credit market strains in Brazil, highlighted by recent bankruptcies and financial distress in other companies, prompting warnings from financial leaders about potential contagion effects. Deutsche Bank's attempts to unwind the derivative contracts tied to Ambipar's financial troubles have so far been unsuccessful, complicating efforts to resolve the crisis.