(Bloomberg) -- Latam Airlines Group SA “flatly rejected” Azul SA’s offer to buy the bankrupt carrier even though the sale would be a better deal for creditors, Azul contends in new court filings.

Azul for months has been expressing interest in a tie-up with Chile’s Latam, but the bankrupt airline has refused to seriously engage in talks, lawyers for Brazil-based Azul said in court papers. Azul said its deal outlined in a Nov. 11 term sheet values Latam at $13 billion and would provide more for creditors than Latam’s current proposal, which is on the verge of seeking court approval.

Latam has said Azul’s offer lacked critical details -- like how the deal would be executed, how long it would take and whether it could be approved by regulators -- as well as the requisite support from creditors. Latam’s restructuring plan is backed by a key group of creditors -- including SVPGlobal, Sculptor Capital Management and Sixth Street Partners -- and its largest equity holders.

Exit Strategy 

Latam is approaching a critical juncture in its effort to exit the bankruptcy case, which began with a Chapter 11 filing in May 2020 as Covid-19 lockdowns stymied international travel. On Thursday, the company will seek a bankruptcy judge’s permission to begin collecting creditor votes on its restructuring plan. Its official committee of unsecured creditors is opposing that step, alleging the plan violates U.S. bankruptcy law. 

A representative for Latam Air declined to comment for this story. 

The case is LATAM Airlines Group SA et al., 20-11254, U.S. Bankruptcy Court for the Southern District of New York (Manhattan). To view the docket on Bloomberg Law, click here.

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