Mexican Legal Framework of Business Insolvency - White & Case

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declaration of, concurso, shall be deemed not included therein [LCM 87]. That is, the
courts would not recognize the validity of a clause in an agreement that would give a
party the right to terminate such agreement in the event of a petition or demand for,
or declaration of, concurso of the other party.
Any party to an executory contract with the debtor shall be entitled to require the
conciliator to declare whether he will assume or reject the contract. If the conciliator
declares the assumption of the contract, the debtor must perform or guarantee
performance thereunder. If the conciliator rejects the contract, or does not provide an
answer within 20 business days, the debtor’s counterparty may thereafter declare the
termination of the contract [LCM 92]. An unresolved issue is whether the conciliator
has the authority to decide on a partial assumption of a contract. Prevailing opinion is
that no such authority exists and the contract would have to be assumed or rejected
in its entirety.
A similar rule exists in the liquidation stage, when the sale of the estate is carried
out as a transfer of the enterprise or parts thereof as a going concern. However,
in this case, the rules and presumptions operate in an inverse sense: The receiver
shall notify each counterparty that they have ten business days to decide whether to
continue or reject the contract. Failure of a counterparty to respond shall be deemed
as consenting to the continuation of the contract [LCM 211].
iv. Executory Contracts (continued)
The principles set forth in 15.n.iii constitute general principles applicable to executory
contracts; however, the Insolvency Law provides an exhaustive list of cases under
which a specific regime applies to specific executory contracts [LCM 93-111]:
1. Purchases
In the case of purchase agreements where the debtor is a purchaser, the seller
is not required to deliver the subject matter of the contract (whether realty or