Oi, a Brazilian telecommunications operator currently undergoing judicial recovery, announced on Tuesday that it has initiated legal proceedings against several foreign funds that represent its former reference shareholders. These funds, including Pimco, SC Lowy, and Ashmore, became significant shareholders of Oi after converting debts into equity in 2024 but significantly reduced their holdings by the following year. The lawsuit alleges that these funds exercised abusive management practices that favored their own credit interests over those of the company and its other creditors, potentially harming Oi's recovery efforts.

The legal action has been lodged in the 7th Business Court of Rio de Janeiro's Capital District, with Oi claiming that the funds acted with undue influence while they were partners, prioritizing their financial interests at the expense of the company's overall welfare. This case highlights ongoing tensions between companies in financial distress and their creditors, particularly in sectors like telecommunications, where substantial debt often complicates recovery efforts.

In response, Pimco, one of the defendants, has categorically denied the allegations, asserting that Oi's claims are entirely unfounded. This disagreement underscores the complexities of investment and creditor relationships in corporate recoveries, and the outcome of this lawsuit could have implications for future negotiations between distressed companies and their creditors in Brazil's challenging economic landscape.