Bankruptcy adjudication is not automatic, and even in voluntary petitions, a prebankruptcy procedure needs to be initiated before the bankruptcy adjudication. In the prebankruptcy, the parties will submit evidence to prove whether the debtor is in general default. It is not sufficient that the debtor merely confesses a general default to the court.
There have been cases in Mexico where the debtor must walk through a long path to get the petition's admission, even in voluntary petitions.
Hernán Cortés was not the first Spaniard to step into what is now Mexico. Others did it before, some of them remained stranded, and the rest went back to Cuba and informed about a great amount of gold. The governor of Cuba commanded Cortés to explore the new territory, rescue the stranders and collect gold, but nothing regarding conquering.1
During the first trimester of 2021, 5 petitions in bankruptcy were filed, notified, and registered on the Federal Insolvency Institute's records. 1
Dentix Mexico Health, S.C. (Dentix).
The State may participate in the equity of a legal entity. If that legal entity was incorporated under mercantile laws, then it falls within the concept of merchant debtor. Hence, state-owned companies may be subject to bankruptcy proceedings. The problem arises in majority state-owned companies.
Foreign creditors have the same rights and opportunities as the national creditors before a bankruptcy proceeding in Mexico, although there are some exceptions.
Creditors are a key factor in bankruptcy. The following is an initial and broad distinction of creditors.
This article aims to explain why bankruptcy has not been the first choice for businesses in Mexico.
On March 22nd, the CEO of Interjet (ABC aerolíneas, S.A. de C.V.) announced the imminent filing before a Mexican court of a petition in bankruptcy in the reorganization stage. Interjet is one of the top 5 airlines in Mexico.
The bankruptcy of an airline is the same as any other bankruptcy except for the following.
The debtor that, under a concession title, provides a federal, state, or municipal public service, may be adjudicated in bankruptcy.[1] Airlines fall within the said provision, because air transportation is a federal public service in Mexico.
Bankruptcy in Mexico has two successive stages: reorganization and liquidation. When reorganization is not possible, bankruptcy is converted to the liquidation stage. The purpose of the reorganization stage is to maintain the enterprise and pay the allowed creditors through a reorganization plan. The purpose of the liquidation stage is to sell the enterprise – as a going concern or in segments – and pay the allowed creditors.
Grupo Aeromexico, S.A.B. de C.V. (Aeroméxico), is a publicly held company incorporated under the Mexican laws. It has its establishment in Mexico and yet filed for bankruptcy in a US court. Probably Aeromexico wanted to get access to a more flexible and expedited bankruptcy, but at the end of the day, its bankruptcy story will be finished in Mexico.