Vitro Asks Court to Compel Barred Mexican Bankruptcy Plan

Vitro SAB, the Mexican glassmaker seeking to salvage its restructuring, urged an appeals court to enforce its bankruptcy plan in the U.S. over opposition from hedge fund Elliott Management Corp. and other creditors, Bloomberg reported. Vitro is facing “legal chaos” with a bankruptcy plan that’s valid in Mexico and unenforceable in the U.S., Vitro attorney Andrew Leblanc told the U.S. Court of Appeals in New Orleans today. “Vitro would be crippled in the United States” if a bankruptcy judge’s decision that denied enforcement of the plan in the U.S. is upheld, Leblanc said. The case came directly to the appeals court following a victory in bankruptcy court by Elliott and other holders of some of Vitro’s $1.2 billion in defaulted bonds. U.S. Bankruptcy Judge Harlin Hale in Dallas ruled in June that the Mexican plan was “manifestly contrary” to U.S. policy because it reduced the liability of non-bankrupt Vitro units on the bonds. A panel of three appeals court judges heard the case. The outcome will help determine the boundaries on what is permissible in a foreign reorganization that seeks recognition in the U.S., said Madlyn Gleich Primoff, a bankruptcy attorney at Kaye Scholer LLP in New York. Read more.