Supermarket Poised To Test Mexico Insolvency Law
Supermarket operator Controladora Comercial Mexicana could soon become the first major test of Mexico's overhauled insolvency laws as it readies to file a "pre-pack" debt restructuring that would end months of negotiations with creditors. As shoppers filled their carts at the company's stores around Mexico, behind the scenes its creditors were hammering out a deal to resolve more than $2 billion of derivatives losses the country's No. 3 supermarket operator suffered at the height of the financial crisis. The company, known as Comerci, is expected soon to announce it has reached a deal with a majority of its creditors, a person familiar with the matter told Reuters. The "pre-pack" deal would make Comerci the first listed company to use 2007 reforms to Mexico's insolvency law that allow companies with pre-negotiated creditor agreements to enter and exit the courts in just a few months. The move would be a major step for Mexico, whose large multinational companies typically try to avoid restructuring in the courts and often spend years in out-of-court negotiations with lenders in New York, Dallas or Madrid. Read more.