I happen to be in Sao Paulo this week and read the following in this morning's Folha:
Basically, a judge installed MattlinPatterson back in control of the airline after being locked out by its Brazilian investors. This is, however, in violation of Brazil's foreign ownership laws so Mattlin must attract local investors to remain compliant. At least this is what I make of it, given my weak Portuguese.
I do know there have been some recent issues at VarigLog, with Wells Fargo arresting some of the aircraft (MD-11s, iirc).