Since 2012, after an important Human Rights Constitutional reform on 2011, Mexican Federal Courts have had different interpretations and have issued contradictory judgments regarding the priority and ranking of consumer’s credits in bankruptcy proceedings. This debate was resolved by two jurisprudences of the Civil Plenary of the First Circuit, which were published on August 2018.
According to the Federal Constitution (Article 17) and the international trades subscribed by the Mexican government, one of the most sacred human rights that exist nowadays is the right of “access to justice”, which can be translated into several specific rights, including that any jurisdictional authority (id est Court or Tribunal) must provide to all the particulars with an efficient resort to solve their claims effectively.
Eugenio Sepúlveda, Galicia Abogados
This is an extract from the second edition of the Guide to Corporate Crisis Management- published by Latin Lawyer. The whole publication is available here.
Introduction
This paper is based on a comparative study of the reorganization provisions of Title 11 of the United States Code (“Chapter 11”) with the reorganization provisions of Mexico’s Ley de Concursos Mercantiles (“LCM”). Although based on a comparative study, this work does not intend to be a complete description of the analyzed statutes.
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).