Mexican Legal Framework of Business Insolvency - White & Case

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b. During Insolvency
Aside from the duties to cooperate with the visitor, conciliator and receiver to
enable them to perform their duties, directors have no liability with creditors during
insolvency proceedings.
During the course of insolvency proceedings, even during conciliation where
management remains in possession of the enterprise, the duties of directors do not
change or expand in favor of creditors. The conciliator and the conservators, if appointed,
have oversight of the transactions carried out during the conciliatory stage, and the
conciliator even has the remedy of demanding removal (cfr. 16.a) in cases where the
conciliator considers it to be for the benefit of the estate [LCM 81].
32. Mergers & Acquisitions 79
There are three time frames relevant to discussing issues surrounding mergers and
acquisitions (M&A) in the context of insolvency: (1) in the vicinity of insolvency; (2) during
the conciliatory stage; and (3) during the liquidation stage.
a. In the Vicinity of Insolvency
Except for the application of avoidance powers, the Insolvency Law is unconcerned
with M&A transactions in the vicinity of insolvency. Please refer to Section 15.j for an
analysis of the avoidance powers rules.
b. During the Conciliatory Stage
There are two levels of authority for disposing of assets during conciliation: (1) in the
ordinary course of business; and (2) out of the ordinary course of business. The debtor
is entitled to dispose of assets in the ordinary course of business, but will require the
conciliator’s consent to dispose of assets out of the ordinary course of business
79 Reiss (2009) provides an in-depth analysis of distressed M&A transactions, which the reader is encouraged
to consult.