finance

Adelag case heading to court

A preliminary hearing will be held today regarding the criminal case against two brothers.

They are accused of filing a fraudulent bankruptcy, the largest ever in Panama.

LA PRENSA

On trial:Brothers Aquilino and Carlos de la Guardia have been accused of defrauding investors in the collapse of Adelag. 1044239

After years of delays, brothers Aquilino and Carlos de la Guardia will finally appear in court today to answer charges related to the collapse of Adelag, which prompted the largest bankruptcy in Panama's history.

The preliminary hearing will begin at 9 a.m. in the criminal branch of the 15th Circuit Court.

The brothers are accused of filing a fraudulent bankruptcy.

Prosecutors said that any deal that has been reached by the defendants will not prevent the criminal case from moving forward. The bankruptcy cost investors, which included several local banks, more than $120 million.

But former prosecutor Eduardo Ulloa, who worked on the case extensively, said that he thinks an agreement to resolve the company's outstanding debts would have a significant impact on the criminal case, especially since there has not been a decision issued in civil court on whether the bankruptcy was fraudulent.

That differentiates it from the country's other ongoing bankruptcy prosecution, which involves former principals in Fotokina, which declared bankruptcy at about the same time as Adelag.

The civil court judge handling the Fotokina case declared that the bankruptcy proceedings were fraudulent, a key to that case moving forward in criminal court. No such ruling has been made in the Adelag case.

Ulloa said that prosecutors can move forward in the Adelag case, but will have a difficult time getting a conviction without a ruling of fraud by the civil court judge.

The defendants also face charges related to documents that were submitted on behalf of the company to the Comisión Nacional de Valores.