Mexican Legal Framework of Business Insolvency - White & Case
Mexican Legal Framework of Business Insolvency - White & Case Mexican Legal Framework of Business Insolvency - White & Case
108 ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ The bank shall increase its corporate capital to the extent required to repay the loan and allow its ICAP to remain at 8 percent [LIC 122 bis 9]. Only then-current shareholders of the bank shall be allowed to subscribe for the capital increase [LIC 122 bis 10]. If insufficient corporate capital is subscribed and paid so that the IPAB loan remains outstanding, IPAB shall adjudicate the shares at book value [LIC 122 bis 12]. If, after the adjudication of shares, the IPAB loan is not repaid in full, the bank shall repay it [LIC 122 bis 12]. Thereafter, the bank shall offset all positive shareholders’ equity accounts (other than corporate capital) against all negative shareholders’ equity accounts [LIC 122 bis 13-I]. The bank shall then apply losses against the corporate capital [LIC 122 bis 33-II]. The bank shall increase its corporate capital to the extent required for its ICAP to remain at 8 percent [LIC 122 bis 13-II]. IPAB shall subscribe and pay for such capital increase, including by capitalizing the outstanding balance of its loan [LIC 122 bis 13-II]. IPAB shall offer to sell all the shares of the bank [LIC 122 bis 14].
30. Purchase-and-Assumption A bank would be subject to purchase-and-assumption if (1) the bank meets any commencement standard; and (2) the CEF determines that [x] the bank is systemically important and [y] less than 100 percent of the bank’s non-IPAB-insured liabilities are susceptible to systemic repercussions [LIC 122 bis II-b]. The purchase-and-assumption technique is carried out in the following fashion: ■■ ■■ ■■ ■■ The bank shall be wound up [LIC 28]. IPAB shall carry out the payment of those non-IPAB-insured obligations determined by the CEF to be payable by IPAB [LIC 122 bis 20]. The liquidator shall transfer assets and liabilities to a bridge bank created by IPAB for such purpose or to another bank [LIC 122 bis 27, 122 bis 29]. IPAB can create a bridge bank with a life of up to six months, just to carry out the purchase-and-assumption transaction of a bank [LIC 27 bis 1-27 bis 6]. White & Case 109
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30. Purchase-and-Assumption<br />
A bank would be subject to purchase-and-assumption if (1) the bank meets any<br />
commencement standard; and (2) the CEF determines that [x] the bank is systemically<br />
important and [y] less than 100 percent <strong>of</strong> the bank’s non-IPAB-insured liabilities are<br />
susceptible to systemic repercussions [LIC 122 bis II-b].<br />
The purchase-and-assumption technique is carried out in the following fashion:<br />
■■<br />
■■<br />
■■<br />
■■<br />
The bank shall be wound up [LIC 28].<br />
IPAB shall carry out the payment <strong>of</strong> those non-IPAB-insured obligations determined by<br />
the CEF to be payable by IPAB [LIC 122 bis 20].<br />
The liquidator shall transfer assets and liabilities to a bridge bank created by IPAB for<br />
such purpose or to another bank [LIC 122 bis 27, 122 bis 29].<br />
IPAB can create a bridge bank with a life <strong>of</strong> up to six months, just to carry out the<br />
purchase-and-assumption transaction <strong>of</strong> a bank [LIC 27 bis 1-27 bis 6].<br />
<strong>White</strong> & <strong>Case</strong><br />
109
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