Corona & Nepote

  Foreign judgments may be utilized in Mexico either: 1) as evidence, 2) as a binding resolution, or 3) as a resolution to be enforced. In the first case, the foreign resolution is utilized as evidence of facts but not of law, in the second as evidence of law (res judicata) , and in the third as a resolution to be enforced. The First Chamber of the Mexican Supreme Court stated that only in the third case, an exequatur proceeding is needed, while for the second case, a verification by the national court that the foreign judgment does not contravene public policy. [1] Is the allowance of claims a resolution to be enforced in the bankruptcy proceeding? or merely a declarative resolution? The answer to this question will determine whether the holder of a foreign judgment needs to start an exequatur proceeding before submitting it as proof of claim. A non-binding precedent from a High Civil Court of the Sixth Circuit states that the allowance of claims resolution is a resolution t...

In a guaranty, the guarantor assumes an obligation in favor of a creditor to pay in the place of the principal in the event of default (conditional, secondary obligation). A guaranty is a separate contract from the contract by which the principal assumed the obligation in favor of the creditor, though dependent and accessorial to it. Outside a bankruptcy event, the guarantor has the same defenses as the principal against the creditor. In case of payment to the creditor, the guarantor has the right to repeat against the principal. But in the event of the principal's bankruptcy, the rights of the guarantor are impaired substantially. The creditor can not demand payment to the guarantor if the obligation has not met its time of default. Upon adjudication in bankruptcy, the obligations subject to a term not due at the bankruptcy adjudication will be regarded as due. This anticipatory expiration of the debt takes force also vis-à-vis the guarantor; hence the creditor may demand pa...

How many times can a debtor file a petition in bankruptcy in the reorganization stage (Chapter 11)? What is the time between the approval of the plan and the second petition (Chapter 22)? In Mexico, once the plan's approval concludes the case, the debtor can file a new petition in bankruptcy in the reorganization stage at any time. The default of a previously approved reorganization plan (Chapter 11) does not produce the immediate opening of the liquidation stage or disapproval of the reorganization plan submitted in the new case (Chapter 22). The breach of a previously approved reorganization plan is both an act of bankruptcy [1] and a fact to consider for the reorganization officer when determining whether to request the early termination of the reorganization stage. [2] Famous cases of Chapter 22 in Mexico are: ·        Grupo Iusacell, S.A. de C.V. (wireless company) o    The first case was tried by the 7 th District Court of Mexico ...

For clarity on this topic, we will explain the priority regime in different scenarios. In the first scenario, there are no secured or specially privileged creditors. In this scenario, claims against the estate are seniors to the rest of the creditors. Within the claims against the estate, labor claims against the estate have priority, followed by the post-petition financial transactions, [1] the claims derived from security, repair, conservation, and administration of goods, and finally, those derived from judicial expenses. After the claims against the estate, there are the singularly privileged creditors, within which debtor’s burial costs are ranked first, and then illness expenses. The singularly privileged creditors are followed by the tax creditors and other labor creditors. After the tax creditors and other labor creditors, the general unsecured creditors and the subordinated creditors are positioned. The second scenario has secured creditors. The rules applicable to the fi...

  A debtor may file a petition to be adjudicated in bankruptcy in three ways: the ordinary petition, the prepackage petition, and the imminent general default petition. Bankruptcy adjudication is not automatic, and even in voluntary petitions, a prebankruptcy procedure needs to be initiated before the bankruptcy adjudication. In the prebankruptcy, the parties will submit evidence to prove whether the debtor is in general default. It is not sufficient that the debtor merely confesses a general default to the court. However, there is no need for a prebankruptcy procedure in case of a prepackage petition, and the judge will immediately adjudicate the debtor in bankruptcy. The prepackage petition must be signed by the debtor and the creditors representing at least the simple majority of the total liabilities stating, under oath, that the debtor is in general default. Besides avoiding the prebankruptcy procedure, there is no other utility of the prepackage petition because: - ...

Bankruptcy adjudication is not automatic, and even in voluntary petitions, a prebankruptcy procedure needs to be initiated before the bankruptcy adjudication. In the prebankruptcy, the parties will submit evidence to prove whether the debtor is in general default. It is not sufficient that the debtor merely confesses a general default to the court. There have been cases in Mexico where the debtor must walk through a long path to get the petition's admission, even in voluntary petitions. This is the case of Minera del Norte, S.A. de C.V., a Mexican mining company, which filed a petition in bankruptcy on May 11, 2020, dismissed three days later on the grounds that the financial statements were not signed. The debtor filed a motion for reconsideration before the bankruptcy court, and the dismissal was affirmed on May 28, 2020. The debtor, then, on June 22, 2020, filed an amparo lawsuit (an extraordinary judicial recourse) before a Federal High Court, which on February 12, 2021, ...