Mexican Legal Framework of Business Insolvency - White & Case

All assets acquired by the concubine or the spouse under the separation of assets
regime in the two years prior to the beginning of the retroactive period are rebuttably
presumed to belong to the debtor and, therefore, are included in the estate [LCM 187].
l. Separation
Any legitimate title-holder (not necessarily an owner) may separate individually identified
assets in the debtor’s possession, provided such assets were not transferred to the
debtor pursuant to a final and irrevocable legal title [LCM 70]. To be separated, an asset
must: (1) be in the debtor’s possession; (2) be individually identified; and (3) may not
have been transferred pursuant to a final and irrevocable legal title.
i. In Debtor’s Possession
An asset not in the debtor’s possession shall not be separated. Possession is a
technical term that implies a de facto power over a certain asset and includes not only
assets over which the debtor has physical possession, but also assets over which the
debtor has primary possession (e.g., the debtor shall be deemed to be in possession
of an asset even if the debtor has leased it out to a third person).
ii. Individually Identified
The identity of the asset is a necessary requisite for separation. Therefore, a fungible
asset (e.g., money) cannot be separated unless it can be individually identified.
In the case of accession (i.e., the case where one asset is naturally or artificially
incorporated into another asset), the rules for identifying assets become casuistic
and generally rely on who acquires title of the resulting asset. The determination of
who acquires title requires applying rules governing the question on which is the
principal asset and which is the accessory asset. If, pursuant to these rules, the
debtor becomes the owner of the resulting asset, the debtor may have to indemnify
the owner of the incorporated asset (which claim would have to be subject to the
insolvency proceedings), but if a third person becomes the owner of the resulting
asset, then such third person may separate it, indemnifying the debtor. The level of
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