District Judge Accepts Vitro's Application
for Prepackaged Insolvency
December 28, 2010
Vitro SAB de CV announced on December 27 that the Judge of Fourth Civil and Labor District Court in Monterrey, Mexico, accepted its insolvency application with restructuring plan.
"This is a very important step in our orderly restructuring process, aimed to create value for the majority of creditors within a shorter period than the one to be achieved through an involuntary proceeding, since it allows [Vitro] to go directly into the conciliation stage, arriving sooner to the credit acceptance stage and finally vote on the proposed restructuring plan," says Alejandro Sánchez Mújica, Vitro's general counsel.
According to a statement issued by the company, the judge's acceptance of the insolvency proceeding with restructuring plan is a breakthrough for those creditors and other stakeholders interested in the company moving forward in this process as soon as possible.
According to a Vitro representative, the process for the pre-packaged Concurso plan with the support of 68 percent of its creditors will not be affected by the actions of its subsidiaries in the United States, and "once the court dictate acceptance for the Concurso any action shall be void.
"Even though a minority group of only four bondholders, representing less than 6 percent of Vitro's outstanding consolidated debt to be restructured, filed an involuntary bankruptcy case under Chapter 11 of the U.S. Bankruptcy Code against Vitro's U.S. subsidiary guarantors, Vitro America and other subsidiaries involved in this litigation in the United States, continue to work normally and are taking the necessary actions to ensure they continue to operate without changes in their production processes," the spokesperson adds.