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UPDATE 3-Creditors approve restructuring of Batista's Oleo e Gas

(Adds restructuring detail, company comment and plans, criticism of plan)

RIO DE JANEIRO, June 3 (Reuters) - Creditors of Brazilian tycoon Eike Batista's Oleo e Gas Participacoes SA approved a restructuring plan for the oil company that could lead to a quick resolution of the largest bankruptcy in Latin America's history, lawyers said on Tuesday.

The plan was approved by creditors holding 90 percent of the Rio de Janeiro-based company's nearly 12 billion reais ($5 billion) of unpaid obligations.

If a judge approves, creditors will swap debts for about 90 percent of Oleo e Gas stock, said Ricardo Knoepfelmacher of Angra Partners, the consultancy that handled talks with creditors. The judge's approval is expected within days, he said.

Creditors include Newport Beach, California-based Pacific Investment Management Co, or PIMCO, one of the world's largest bond investment companies; Batista's shipbuilding company, OSX Brasil SA, and suppliers such as oil services company Schlumberger NV.

"This is one of the first Brazilian cases to be solved in a coherent way, using solutions that are common in developed countries," said Eduardo Munhoz, a lawyer with Mattos Filho Advogados, one of the law firms representing the company.

Munhoz said the restructuring deal is important because it shows that Brazil's 2001 corporate law rewrite has properly tilted power away from shareholders to creditors such as suppliers, lenders, employees and bondholders.

Coming only seven months after Oleo e Gas, then known as OGX Petroleo e Gas Participacoes SA, filed for bankruptcy, the approval may boost confidence in Brazil's corporate bankruptcy legislation, he added.

In the past, Munhoz said, Brazilian shareholders often gained a bigger share of a restructured company than they deserved.

Many economists support bankruptcy protection because it helps investors take risks while limiting the losses if they fail. They also warn that favoring shareholders too much will make lenders less likely to lend at reasonable rates and suppliers less likely to offer goods and services.

Batista, who controls 51 percent of the company's stock, will see his stake drop to about 5 percent. Last year, Batista lost almost all of his estimated $30 billion fortune after shares of EBX's listed companies plunged.

Ownership transfer from Batista and other shareholders to creditors is likely to occur by September or October, Knoepfelmacher said. Batista and other shareholders will get warrants to buy about 15 percent of new Oleo e Gas stock.

Some creditors were unhappy with the deal. Luiz Filipe Tavares, a manager of the Itava Inc investment fund, a British Virgin Islands company that bought 9 million reais of Oleo e Gas' bonds, says bigger creditors such as Pimco prevented smaller creditors from taking part in new loans to the company during the bankruptcy, a move that will limit their share in the restructured company. He plans a court challenge.

"The big creditors forced this deal and cut us out," he said. "We wanted to invest more. Batista got warrants, but we can't invest more."

Oleo e Gas shares closed on Tuesday at 0.20 real, unchanged from Monday, before the vote took place.

The plan makes Oleo e Gas debt free, easing efforts to increase output from offshore oil wells near Rio. Since the bankruptcy, creditors have pledged $215 million of new debt to keep the company afloat. About $90 million of that will be made available if the judge approves, Knoepfelmacher said.

The company may also sell part of its 40 percent stake in the Atlanta and Oliva oil field in the BS-4 exploration block in the Santos Basin south of Rio de Janeiro and part of its 100 percent stake in the Tubarão Martelo offshore field east of Rio, Knoepfelmacher said.

(Reporting by Jeb Blount; Writing by Reese Ewing; Editing by Andre Grenon, Eric Walsh and Jan Paschal)