BANKRUPTCY


   

Description


 

Process


 

GOVERNING LAW

     
Law of Competition (Ley de Concursos Mercantiles) - LCM      

DEADLINES

Filing Claims 45 days from the date of the last notice of bankruptcy    

WHO CAN FILE INSOLVENCY CLAIMS?

The following parties can file insolvency claims: The debtor, any creditor, the district attorney, a judge, tax authorities in their capacity as creditors. The court will order the party that filed the insolvency claim/petition to pay the attorney's fees and expenses (gastos y costas), including the insolvency examiner's fees, if any judgment is issued declaring no insolvency of the company. Once the examiner has been appointed, the examiner must, within the following 15 to 30 days, report to the court if the debtor is insolventand can be declared in concurso. The debtor and, in the event that the insolvency petition is filed by creditors (involuntary procedure), the creditors can challenge the examiner's report. The court must determine the solvency or insolvency of the debtor within the 15 days following the date of its receipt of the examiner's report. If the court determines that the debtor is solvent, the concurso procedure ends. If the court resolves that the debtor is legally insolvent, it will issue the corresponding declaration or judgment of insolvency, which formally begins the conciliation stage.  

 

 

CLAIMS DOCUMENTATION

Written Petition      
Original Documentation Contracts/Purchase Orders/Invoices    

CONCURSO MERCANTILE

Conciliation The first stage of a concurso procedure is the conciliation stage, which aims to encourage a binding reorganisation agreement between the debtor and its creditors and, as a result, avoid the debtor's bankruptcy or liquidation. A conciliator, who initially acts as an intermediary between the company and its creditors, must direct this attempt.    




    The declaration of insolvency must establish that the debtor has incurred a general default of its payment obligations, and must include a provisional list of creditors identified in the debtor's accounting records. This list does not exhaust the proceeding for recognition, ranking and determination of the priority of creditors' claims. Under the LCM, the declaratory of insolvency must include:
• The retroactivity date (that is, the date to which the effects of the concurso procedure will be applied retroactively, known as the "hardening" or "look-back" period).
• A declaration that the conciliation stage has commenced.
• Instructions for the IFECOM to appoint a professional conciliator.
• An order for the debtor to immediately provide to the conciliator the debtor's books, records and all other necessary documents, and allow the conciliator and interveners, if any, to carry out the activities necessary to perform their duties, and to suspend the payment of debts.




    Protection from creditors: No particular protection from the creditors is provided by statue. The debtor can terminate contracts if this was expressly agreed in the corresponding agreement, but subject to special rules and limitations provided in the LCM. The LCM provides special rules for:
• The termination of leases.
• The purchase of goods that are not delivered.
• Deposits.
• Repurchase and derivative agreements.
• Security loan transactions.
• Differential or future contracts.
• Lump sum construction contracts and insurance contracts.




    Length of procedure The conciliation stage must not last more than 185 calendar days, unless extended for up to two additional consecutive periods of 90 calendar days each. However, the conciliation stage must not last more than 365 calendar days.




    Conclusion The conciliation stage concludes and the debtor is declared bankrupt if the:
• Conciliation stage ends without the parties reaching a creditors' agreement.
• Debtor fails to comply with the creditors' agreement.
• Debtor requests its bankruptcy.
• Conciliator requests the debtor's bankruptcy and the court agrees to grant it.

CONCURSO MERCANTILE

Bankruptcy The second stage of a concurso procedure, if applicable, consists of the bankruptcy stage. The Mexican insolvency law (LCM) does not provide different insolvency proceedings for individuals and companies or make distinction between "preventative" insolvency proceedings and "actual" insolvency proceedings.    

Source

PracticalLaw