Mexican Legal Framework of Business Insolvency - White & Case

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74 voluntary restructuring negotiations and expedited reorganization proceedings are used. These proceedings can provide a cost-efficient means of resolving a debtor’s financial difficulties…. 53 Prepackaged concurso proceedings avoid the visit stage and allow the debtor to request that the judge implement injunctive relief upon accepting the petition [LCM 340, 341]. The debtor may file for prepackaged concurso proceedings, inter alia, if the petition is signed by the debtor and creditors representing at least 40 percent of its outstanding debt, and if the petition is accompanied by a proposed plan, also signed by the debtor and creditors representing at least 40 percent of its outstanding debt [LCM 339]. If a debtor files a prepackaged concurso proceeding, it will not need to establish that it is insolvent (but will need to declare that its insolvency is imminent) and there is no need for the appointment of a visitor [LCM 339-III, 341]. The conciliator must take into consideration the proposed plan when preparing the restructuring plan [LCM 342]. 16. Liquidation The type of proceeding referred to as “liquidation” is regulated by the insolvency law and generally provides for a public authority (typically, although not necessarily, a judicial court acting through a person appointed for the purpose) to take charge of the debtor’s assets, with a view to terminating the commercial activity of the debtor, transforming non-monetary assets into monetary form and subsequently distributing the proceeds of sale or realization of the assets proportionately to creditors. Although generally requiring the sale or realization of assets to occur in a piecemeal manner as quickly as possible, some insolvency laws permit liquidation to involve the sale of the business in productive units or as a going concern…. 54 53 UNCITRAL (2005), pp. 238-239. 54 UNCITRAL (2005), p. 30.
If a debtor does not successfully complete the conciliation stage or, if the debtor so requests upon its voluntary petition, then it will be declared en quiebra and liquidated [LCM 167]. A concurso during conciliation can also be converted to liquidation if the conciliator considers that the debtor or the creditors are not willing to reach an agreement on a reorganization plan, or that it is impossible to reach an agreement on a reorganization plan [LCM 150]. The stated purpose of the liquidation stage is to liquidate the business, as a whole or by sale of its individual assets, to repay creditors [LCM 3]. The quiebra declaration results in the removal of management, and management of the debtor’s enterprise would then be vested with the receiver [LCM 178]. The receiver would then proceed with the sale of the assets of the enterprise and the payment of the recognized claims pursuant to the statutory priority of payments. a. Removal The quiebra declaration will imply the outright removal of the debtor from the management of the enterprise [LCM 178]. i. Legal Nature Theories on the legal nature of removal abound. Barrera (1998) provides an in-depth analysis of removal and is arguably the most comprehensive of Mexican treatises on the subject. Barrera (1998) distinguished between subjective, objective and other theories of removal. Subjective theories include (1) the civil death theory; and (2) the civil incapacity theory. The civil death theory provides for a loss of all civil rights of a person (assumes that a debtor is, for all legal intents and purposes, deceased). The civil incapacity theory provides for a loss of all acting capacity of a debtor (treating it similar to a minor). 55 55 See Barrera (1998), pp. 44-48, and Brunetti (1945), p. 126. White & Case 75
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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
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verification and admission of claim
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The issue is still divided between
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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
Page 57 and 58: ■■ ■■ ■■ ■■ ■■
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 and 76: they function generally determine f
Page 77 and 78: . The Reorganization Plan The purpo
Page 79 and 80: extend to guarantors or co-obligors
Page 81: the reorganization plan); (3) all s
Page 85 and 86: ii. Timing Removal takes effect leg
Page 87 and 88: Claims by creditors operate at two
Page 89 and 90: ■■ ■■ ■■ ■■ ■■
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
Page 101 and 102: 30, 31, 32, 33, 34, 35, 36, 37, 38,
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
Page 109 and 110: ■■ ■■ If, however, somethin
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
Page 127 and 128: ■■ ■■ All kinds of animals
Page 129 and 130: Galindo (1957). GALINDO GARFIAS, Ig
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Mexican Legal Framework of Business Insolvency - White & Case

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