Brazilian Airline Azul Nears Ruling on Bankruptcy Exit Plan

A bankruptcy judge said he will likely rule on Azul SA’s bankruptcy plan on Friday, which would clear the way for the Brazilian airline to recapitalize and settle with lenders, unsecured creditors, and its largest aircraft lessor.

The Thursday plan confirmation hearing was marked by objections from the Department of Justice’s bankruptcy monitor, the US Trustee, which challenged liability shields for nonbankrupt entities contained in Azul’s plan. It cited a recent New York federal judge’s decision to overturn releases in Gol Linhas Aéreas Inteligentes SA’s reorganization plan.

“I can certainly say that the only thing standing in the way of ...