Mexican Legal Framework of Business Insolvency - White & Case

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68 q. Post-Commencement Financing The Insolvency Law provides a very poor framework for post-commencement financing. The debtor is entitled to obtain secured or unsecured post-commencement financing with the approval of the conciliator [LCM 75]. When the debtor obtains post-commencement financing for the management and operation of the estate, such financing will be considered a claim against the estate (cfr. 16.c) [LCM 224-II, III]. Post-commencement financing does not necessarily have to be obtained in the ordinary course of business, but will require conciliator approval if outside the ordinary course of business. Weil (2000) 46 provides an excellent illustration of the ordinary course of business issue in the context of post-commencement financing: [T]he determination as to what constitutes a transaction in the ordinary course of the debtor’s business is fact-specific and must be made on a case-by-case basis. For example, trade credit obtained by a debtor in possession in connection with the dayto-day operation of its business generally constitutes an ordinary course of business transaction. Monies advanced by the lender to fund the debtor’s payroll and operating expenses typically are not regarded as credit obtained in the ordinary course of business. While en concurso, the debtor is protected from the suspension of payments of only its pre-petition debts, so the payment of post-petition debts is not suspended (cfr. 15.g). This means that the debtor would not be found in contempt of court if it makes payments and repayments of post-petition debt. However, the stay of execution imposed by the concurso declaration applies broadly during the conciliation (cfr. 15.h), so a creditor will still encounter hurdles to collect a post-petition credit during conciliation in the absence of the debtor’s cooperation. ALI Nafta (2003) argues that the legal and regulatory regime applicable to Mexican commercial banks makes post-commencement financing “extremely rare” in Mexico. 47 46 P. 200. 47 See Reporters’ Note 8, pp. 106-108.
. The Reorganization Plan The purpose of the conciliatory stage is to reach a consensual reorganization plan [LCM 3, 148]. Reorganization plans perform different functions in different types of proceedings. In some, the plan may be the tailpiece of the reorganization proceedings, dealing with the payout of a dividend in full and final settlement of all claims and the final structure of the business after the reorganization is complete. 48 A reorganization plan is an agreement entered into by the debtor and the generality of creditors, which requires court confirmation to be effective. With the exception of certain labor- and tax-related claims, individual agreements entered into between the debtor and a creditor shall be null and void and will result in the creditor forfeiting its rights in the concurso [LCM 154]. i. Legal Nature Very little is said about the legal nature of the reorganization plan in the Mexican legal regime. Most treatises analyze either non-Mexican insolvency laws or the repealed Law of Bankruptcies and Suspension of Payments. The need to discuss the legal nature of a reorganization plan derives from its distinctive binding quality upon non-signing creditors, as an exception of the res inter alios acta, aliis nec nocet nec prodest principle or privity of contract doctrine (cfr. 15.r.vi). Theories on the legal nature of the reorganization plan range from those that state that it has a contractual nature, to those that state that it has a procedural nature. 48 UNCITRAL (2005), p. 209. White & Case 69
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Mexican Legal Framework of Business
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Mexican Legal Framework of Business
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Maria Teresa Fernández Labardini*
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PART IIISpecial Insolvencies ......
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2 Consignment Consignación Coopera
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4 Priority claim Crédito con privi
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Introduction All of a debtor’s as
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PART I Out-of-Court Restructuring O
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One of the risks that suppliers of
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Under either of the two approaches,
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. Prevention of Systemic Risk Anoth
Page 25 and 26: verification and admission of claim
Page 27 and 28: The issue is still divided between
Page 29 and 30: the debtor to arrive at a consensua
Page 31 and 32: v. Remuneration Specialists are ent
Page 33 and 34: after his death, if the creditors
Page 35 and 36: The above court precedent has two f
Page 37 and 38: 2. Voluntary Acceptance Small merch
Page 39 and 40: ii. Passive Estate Since a branch i
Page 41 and 42: For a debtor to be considered a hol
Page 43 and 44: ■■ Shutting down the enterprise
Page 45 and 46: ■■ The facts that motivate the
Page 47 and 48: filing such proofs of claim and ind
Page 49 and 50: 29 P. 161. i. Conservative Measures
Page 51 and 52: i. Disposition of Assets During con
Page 53 and 54: ■■ ■■ Granting of collatera
Page 55 and 56: All assets acquired by the concubin
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Page 59 and 60: ■■ ■■ Claims for an uncerta
Page 61 and 62: chattel 35 ) unless its price is pa
Page 63 and 64: c. Extensions of Credit An extensio
Page 65 and 66: the negotiable instruments and the
Page 67 and 68: epayment or abandonment shall apply
Page 69 and 70: ■ ■ Swaps: transactions in whic
Page 71 and 72: If the subject matter of the constr
Page 73 and 74: Netting of obligations in light of
Page 75: they function generally determine f
Page 79 and 80: extend to guarantors or co-obligors
Page 81 and 82: the reorganization plan); (3) all s
Page 83 and 84: If a debtor does not successfully c
Page 85 and 86: ii. Timing Removal takes effect leg
Page 87 and 88: Claims by creditors operate at two
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Page 91 and 92: predictability in commercial relati
Page 93 and 94: The receiver may oppose the foreclo
Page 95 and 96: ■■ A foreign proceeding is a co
Page 97 and 98: Conditioning the application of cro
Page 99 and 100: f. Enabling and Access The rules of
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Page 103 and 104: ii. Once Recognition Is Granted Onc
Page 105 and 106: concerning the coordination of proc
Page 107 and 108: 20. Non-bank Financial Sector Firms
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Page 111 and 112: Capitalization is an important indi
Page 113 and 114: A bank would be declared en concurs
Page 115 and 116: Bank restructuring through support
Page 117 and 118: 30. Purchase-and-Assumption A bank
Page 119 and 120: causes for dissolution has occurred
Page 121 and 122: [LCM 75]. The determination as to w
Page 123 and 124: 33. Securities Market 84 Holders of
Page 125 and 126: A reorganization plan would be enfo
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■■ ■■ All kinds of animals
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Galindo (1957). GALINDO GARFIAS, Ig
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Mexican Legal Framework of Business Insolvency - White & Case

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