Court declares bankruptcy after failed rescue attempt
The civil and commercial court in Rafaela, Santa Fe, has declared Algodonera Avellaneda bankrupt. Judge Fabián Lorenzini issued the ruling after the deadline for interested buyers in the rescue process passed without any registrations and the company failed to secure the legal majorities required for a creditor agreement. The judge said the decision came after all possible efforts and prior legal avenues had been exhausted.[S1][S2]
The company had been in preventive insolvency proceedings since 2024. During that period, it sought creditor approval for a restructuring proposal, but Banco Nación, which holds more than 80% of the verified debt, rejected the offers as insufficient. The bank is owed USD 260,791,600.40 and ARS 1,585,782,428.89. A significant portion of those obligations originated from guarantees Algodonera Avellaneda provided to Vicentin, the agro-export firm linked to members of the same family.[S1][S2]
Operations and debt in focus
Algodonera Avellaneda is based in Reconquista, Santa Fe, and employs around 350 people. It is currently operating at 60% capacity, doing outsourced work to cover payroll. In addition to its spinning plant, it operates cotton gins in General Pinedo, Chaco, and Banderas, Santiago del Estero. The court also recorded post-insolvency liabilities of ARS 6,818,717,040.87 for 2025-2026, stemming from electricity services, tax obligations, and labor claims.[S1][S2]
The company had asked to exclude Banco Nación from the creditor vote, calling it a hostile creditor, but the court rejected that request on September 14 as inadmissible. Judge Lorenzini had granted successive extensions to the exclusivity period, in December 2025 and again in February 2026, and in July opened an extraordinary stage to try to reach the required majorities. None of those efforts produced an agreement.[S1][S2]
What happens next
With no agreement and no offers to take over the company through the cramdown process, Lorenzini declared an indirect bankruptcy and opened the door to continuing the plant's activity. In his ruling, he said that once bankruptcy is declared, it is appropriate to analyze whether to authorize continued operation as a way to preserve a minimum margin of productive activity, protect asset value, and safeguard employment on a transitional basis while the company is liquidated as a going concern, either through a total sale or the sale of operating business units.[S1][S2]
