Two Mexican companies, Vitro SAB and Satmex, used U.S. bankruptcy laws to restructure their debts. Vitro filed for bankruptcy in Mexico and then filed for Chapter 15 bankruptcy in the U.S. to stay litigation. Satmex filed two Chapter 11 bankruptcies in the U.S. directly. Both companies needed access to U.S. bankruptcy courts but chose different routes, with Vitro using Mexico as the main proceeding and Satmex choosing the U.S. The cases demonstrate how global companies can use voluntary and involuntary filings across multiple jurisdictions as part of their restructuring strategies.
This presentation discusses the importance of front-end regulations when issuing debt, and the importance of conducting an adequate due diligence before investing in sovereign debt. Ignoring the details of applicable law to a bond issuance are not “back-end changes” when an issuer implements measures authorized by applicable law.
Presented at 2004 SAM conference; examines how accounting manipulations can radically understate a company's value for it to be seized during an express-bankruptcy
You can distinguish the various types of bonds by their terms of contr.pdfreachaakar
You can distinguish the various types of bonds by their terms of contract, pledge of collateral,
and so on. Identify the type of bond based on each description given in the table that follows!
Based on your uncerstanding of bond ratings and bond-rating criteris, which or the following
statements is true? An indeature is a legat document that detais the rights of bondholders, if the
indenture includes a siking funds provision, the bond wall hove mare default risk: An indenture
is a legal document that detalis the rights of bondmolsers. If the indenture includes a sinking
funds provision, the bond will have les defaut risk. In 2008 , the United States began to witness
gee of the worst recessions since the 19305. The colapse of the housing fubble in 2006 led to a
massive. docine in real estath prices, affecting consumars and insteutions, especilly banking and
financal entities. Severe liquidity shortsails in the United States as well as other global markets
led to a tenous credit crisis. Ouring the credit crisis of 2000-2009, several banis and other
businesses went tarough a roomanization procest or were forced to liquidate. Consider the
following example: In December 2008, Hawaian Telcom took action to strengthen its baiance
sheet by reducing debt. Allnough the company continued to werate. Ifs credtars could not coliect
thair debts or laan payments that were dve prior to the legal action that the company took.
Howeve, on thovember 30,7009 , the comeeny nad 125 milion in cash an hand. An indenture is a
legal document that detalis the rights of bondholders. If the indenture includes a sinking funds
provision, the bond will have more defaute risk. An indenture is a legal document that details the
rights of bondholders. If the indenture includes a sinking funds provision, the bond will have less
default riski. In 2008, the United States began to witness one of the worst recesslons since the
1930 s. The collapse of the housing bubble in 2006 led to a massive decine in real estate prices,
affecting consumers and institutions, especially barking and financial entities. Severe liquidity
shortfalis in the United States as well as other giobal markets led to a serious credit crisis. During
the credit crisis of 2008-2009, several banks and other businesses weot. through a reorganizatien
process or were forced to liquidate. Consider the following example: In December 2008,
Hawailan. Telcom took action to strengthen its balance sheet by reducing debt. Athough the
company continued to operate, is credi tors could not collect their debts or loan payments that
were due prior to the legal action that the company took. However, on November 30,2009 , the
company had $75 million in cash on hand. This is an exampie of: Reorganization Lquidation.
In this tutorial, Chris Roush helps you become better acquainted with the inner-workings of bankruptcy court and shows you best practices for identifying stories in documents.
Roush is the director of the Carolina Business News Initiative and an associate professor at the University of North Carolina at Chapel Hill.
A discussion of Title III of the Puerto Rico Oversight, Management, and Economic Stability Act to establish a proceeding for the adjustment of Puerto Rico debts.
This presentation discusses the importance of front-end regulations when issuing debt, and the importance of conducting an adequate due diligence before investing in sovereign debt. Ignoring the details of applicable law to a bond issuance are not “back-end changes” when an issuer implements measures authorized by applicable law.
Presented at 2004 SAM conference; examines how accounting manipulations can radically understate a company's value for it to be seized during an express-bankruptcy
You can distinguish the various types of bonds by their terms of contr.pdfreachaakar
You can distinguish the various types of bonds by their terms of contract, pledge of collateral,
and so on. Identify the type of bond based on each description given in the table that follows!
Based on your uncerstanding of bond ratings and bond-rating criteris, which or the following
statements is true? An indeature is a legat document that detais the rights of bondholders, if the
indenture includes a siking funds provision, the bond wall hove mare default risk: An indenture
is a legal document that detalis the rights of bondmolsers. If the indenture includes a sinking
funds provision, the bond will have les defaut risk. In 2008 , the United States began to witness
gee of the worst recessions since the 19305. The colapse of the housing fubble in 2006 led to a
massive. docine in real estath prices, affecting consumars and insteutions, especilly banking and
financal entities. Severe liquidity shortsails in the United States as well as other global markets
led to a tenous credit crisis. Ouring the credit crisis of 2000-2009, several banis and other
businesses went tarough a roomanization procest or were forced to liquidate. Consider the
following example: In December 2008, Hawaian Telcom took action to strengthen its baiance
sheet by reducing debt. Allnough the company continued to werate. Ifs credtars could not coliect
thair debts or laan payments that were dve prior to the legal action that the company took.
Howeve, on thovember 30,7009 , the comeeny nad 125 milion in cash an hand. An indenture is a
legal document that detalis the rights of bondholders. If the indenture includes a sinking funds
provision, the bond will have more defaute risk. An indenture is a legal document that details the
rights of bondholders. If the indenture includes a sinking funds provision, the bond will have less
default riski. In 2008, the United States began to witness one of the worst recesslons since the
1930 s. The collapse of the housing bubble in 2006 led to a massive decine in real estate prices,
affecting consumers and institutions, especially barking and financial entities. Severe liquidity
shortfalis in the United States as well as other giobal markets led to a serious credit crisis. During
the credit crisis of 2008-2009, several banks and other businesses weot. through a reorganizatien
process or were forced to liquidate. Consider the following example: In December 2008,
Hawailan. Telcom took action to strengthen its balance sheet by reducing debt. Athough the
company continued to operate, is credi tors could not collect their debts or loan payments that
were due prior to the legal action that the company took. However, on November 30,2009 , the
company had $75 million in cash on hand. This is an exampie of: Reorganization Lquidation.
In this tutorial, Chris Roush helps you become better acquainted with the inner-workings of bankruptcy court and shows you best practices for identifying stories in documents.
Roush is the director of the Carolina Business News Initiative and an associate professor at the University of North Carolina at Chapel Hill.
A discussion of Title III of the Puerto Rico Oversight, Management, and Economic Stability Act to establish a proceeding for the adjustment of Puerto Rico debts.
May 2011 Newsletter Mexican Companies Cross The U S Border
1. MEXICAN COMPANIES
CROSS THE U.S. BORDER
FOR BANKRUPTCY
PROTECTION
JULY, 2011
Two notable Mexican companies have used U.S. Bankruptcy Laws in different
ways to restructure and reorganize their business operations.
Vitro SAB’s massive bankruptcy case spans two countries and involves bankruptcy courts in Mexico, Texas and
New York. The case pits Mexico’s Sada family against the glass-maker’s Noteholders, owed about $1.2 billion.
Vitro SAB is a Mexican company formed in 1909 and is the largest manufacturer of glass containers and flat glass in
Mexico, with annual sales of $1.8 billion in 2010, and operating in 11 countries. In response to Vitro’s 2008 default under the
$1.2 billion note obligations, failed negotiations to restructure the notes, and lawsuits by the noteholders against Vitro in
multiple jurisdictions, Vitro filed for bankruptcy protection in Mexico.
Prior to Vitro’s voluntary bankruptcy filing in Mexico, the Noteholders filed an INVOLUNTARY bankruptcy against 15 of
Vitro’s subsidiaries in Texas, under U.S. Bankruptcy law. In addition, the Noteholders commenced lawsuits against Vitro and
49 of it’s subsidiaries in New York State Court for breach of contract regarding the Notes.
In response, and in an effort to stay litigation in New York State Court, Vitro filed a Chapter 15 proceeding in U.S.
Bankruptcy Court for the Southern District of New York. Vitro maintained that its voluntary bankruptcy filing in Mexico
under Mexico’s Business Reorganization Act was a “foreign main proceeding” that supported the Chapter 15 filing and
afforded Vitro access to the automatic stay of Section 362 of the U.S. Bankruptcy Code, which would effectively enjoin
the state court lawsuits initiated by the Noteholders. As Vitro’s “COMI” (center of main interests) was clearly located in
Mexico, there was no question that a Chapter 15 based on “foreign main proceeding” was appropriate.
In connection with Vitro’s voluntary bankruptcy filing in Mexico, Vitro filed a “prepackaged” voluntary judicial reorganization
plan under Mexico’s Business Reorganization Act”, or a Concurso Plan. The Plan provided for an approximate 40%
“haircut” of the Noteholders’ claims, by replacing existing notes with new notes issued by the reorganized Vitro. To effectuate
a “cram-down” of the Concurso Plan on the dissenting Noteholders, Vitro seeks to utilize the voting power of Vitro subsidiaries
who hold $1.8 billion in claims as creditors of Vitro. The Vitro subsidiaries would undoubtedly vote in favor of Vitro’s
Concurso Plan.
Vitro’s Noteholders have objected to the Concurso Plan in the Mexican bankruptcy proceeding, asserting that the claims
of Vitro’s subsidiaries as creditors of Vitro should not be considered in voting on the Concurso Plan. Without the voting
power of the $1.8 billion in claims of the Vitro subsidiaries, it was unlikely the Concurso Plan would be confirmed over the
Noteholders’ objection. Initially the Mexican Bankruptcy Court agreed with the Noteholders and ruled that the subsidiary
claims could not be voted. Without such votes, the Concurso Plan was “dead” and the entire Mexican bankruptcy
proceeding was not viable. Without a viable “foreign main proceeding”, Vitro and the Noteholders agreed to a dismissal
of Vitro’s Chapter 15 proceeding in New York.
The contents of this Update are offered as general information only and are not intended for use as legal advice on specific matters.
s lk- la w. c o m