Mexican Legal Framework of Business Insolvency - White & Case
Mexican Legal Framework of Business Insolvency - White & Case
Mexican Legal Framework of Business Insolvency - White & Case
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All pre-commencement per se fraudulent transactions are avoidable [LCM 113]. All other<br />
avoidable transactions (cases <strong>of</strong> constructive fraud, objective preferences and subjective<br />
preferences) are avoidable if carried out within the retroactive period [LCM 114-117].<br />
The retroactive period is the period that begins 270 days prior to the declaration <strong>of</strong><br />
business reorganization [LCM 112]. The judge may extend such period to an earlier<br />
date upon the reasoned request <strong>of</strong> the conciliator, the conservators or any<br />
creditor [LCM 112].<br />
i. Per Se Fraudulent Transactions<br />
Transactions entered into before the declaration <strong>of</strong> concurso in which debtor<br />
knowingly defrauds creditors, shall be set aside if the transaction is gratuitous or, not<br />
being gratuitous, the third party shares the fraudulent intent [LCM 113].<br />
ii. <strong>Case</strong>s <strong>of</strong> Constructive Fraud<br />
The following transactions carried out during the retroactive period shall be set aside.<br />
These transactions are conclusively presumed to be fraudulent [LCM 114]:<br />
■■<br />
■■<br />
■■<br />
■■<br />
■■<br />
■■<br />
Gratuitous transactions.<br />
Transactions under which the debtor pays consideration <strong>of</strong> a substantially higher<br />
value, or receives consideration <strong>of</strong> a substantially lower value, than that <strong>of</strong><br />
its counterparty.<br />
Transactions in which conditions or terms significantly differ from then-prevailing<br />
market conditions or from trade usage or practices.<br />
Any debt remission made by the debtor.<br />
Any payment <strong>of</strong> unmatured obligations.<br />
The discount <strong>of</strong> debtor’s payables by the same debtor.<br />
iii. Objective Preferences<br />
The following transactions shall be set aside if carried out in bad faith during the<br />
retroactive period. Bad faith is rebuttably presumed [LCM 115]: