The First Chamber of the Supreme Court recently handed down a decision dealing with the constitutionality of one of the timeframes set by the Bankruptcy Law for filing a proof of claim in bankruptcy proceedings.
Judge Robert W. Sweet of the U.S. District Court for the Southern District of New York held inCT Investment v. Carbonell and Grupo Costamex, 2012 WL 92359 (S.D.N.Y. Jan. 11, 2012), that comity should be extended to an order issued by a Mexican district court overseeing the Mexican bankruptcy proceeding (concurso mercantil) of Cozumel Caribe S.A. de C.V. (“Cozumel Caribe”) under Mexico’s Ley de Concursos Mercantiles (the “Mexican Business Bankruptcy Act”). In so holding, Judge Sweet stayed the U.S.
Founded in 1909, Vitro, S.A.B. de C.V., is the leading glass manufacturer in Mexico, and one of the largest in the world, backed by more than 100 years of experience in the industry. It is headquartered in Monterrey, Mexico, and has subsidiaries in Europe and the Americas.
The dueling judicial decisions in Mexico and the United States regarding the proposed restructuring of the Mexican enterprise, Vitro S.A.B., de C.V., and its affiliates (collectively, “Vitro”), and its strong opposition by a group of U.S. noteholders, became must-read thrillers for finance and bankruptcy professionals, as well as distressed-debt investors.
Over the last several years, the number of Chapter 15 filings has continued to grow. One of the most prominent of these bankruptcy filings is the Vitro S.A.B. de C.V. case. When last we reported on theVitro case, the Texas bankruptcy court administering the Chapter 15 case had denied recognition to the Mexican restructuring plan of Vitro because the plan provided third party releases to non-debtors. See Vitro, S.A.B.: Bankruptcy Court Refuses to Recognize Mexican Concurso That Releases Claims Against Non-Debtors” (November 2012).
Mexican authorities plan to put 10 years worth of corporate insolvency documents online in order to bring transparency to the judicial system, which is often bogged down by bureaucracy.
On August 2, 2010, Maru E. Johansen, in her capacity as the foreign representative (the “Foreign Representative”)1 in respect of Mexican insolvency proceedings regarding Compania Mexicana de Aviacion, S.A. de C.V. (“Mexicana”), filed a petition for recognition in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), commencing a case under Chapter 15 of the United States Bankruptcy Code.2 Mexicana and its affiliates operate Mexicana Airlines, Mexico’s largest airline.
Mexicana Airlines has reported that it has filed for bankruptcy protection in Mexico and will seek to reorganize. What does this mean for aircraft lessors and other creditors of Mexicana Airlines?
The Mexican Business Reorganization Act
On August 28, 2010, Compañía Mexicana de Aviación (“Mexicana”), the third oldest airline in the world and one of the most important airlines in Latin America, stopped flying.
With the enactment of the Ley de Concursos Mercantiles (the “LCM”) in 2000, Mexico took a dramatic step towards modernizing its bankruptcy and insolvency laws. Several years later, in 2007, Mexico took additional steps by enacting a number of reforms aimed to create or clarify the legal framework regarding various important topics that were novel in Mexico, including implementation of a process to obtain approval of pre-negotiated plans.