By Ivan Castano
CORPORATE BANKRUPTCY: Down by law
A tough ruling on Mexican glassmaker Vitro’s bankruptcy appeal has triggered heated debate in financial markets – not least for its far reaching implications
Mexico’s bankruptcy law must be overhauled and
more specialized judges hired to prevent insolvent corporations
from flouting their creditor obligations.
This was the resounding message from corporate turnaround
experts, during a LatinFinance panel event held in Mexico City
on June 21. The event – The Rules of the Game in
Mexico: The Corporate Workout Law in Practice –
brought heavy condemnation on bankrupt Mexican glass-maker
Vitro for pursuing a 'fraudulent’ turnaround that
has raised a slew of controversial headlines.
The case, which has also spawned big cross-border lawsuits,
could change the way future Latin American corporate
bankruptcies are decided in the US, Mexico and Latin
At stake are $1.6 billion of bond debt (plus $600 million of
unpaid interest) held by a clutch of US hedge funds, which
Mexico’s bankruptcy court has failed to recognize,
'twisting the law’ and enabling Vitro to avoid
payment, according to observers...
Already have an account?
Subscribe now for unlimited access to all current and archive news, data and market analysis.
Take a free two-week trial now for the latest news, data and market analysis.