The forthcoming bankruptcy of Interjet.

 On March 22nd, the CEO of Interjet (ABC aerolíneas, S.A. de C.V.) announced the imminent filing before a Mexican court of a petition in bankruptcy in the reorganization stage. Interjet is one of the top 5 airlines in Mexico.

The bankruptcy of an airline is the same as any other bankruptcy except for the following.

The debtor that, under a concession title, provides a federal, state, or municipal public service, may be adjudicated in bankruptcy.[1] Airlines fall within the said provision, because air transportation is a federal public service in Mexico.

In these special proceedings, the governmental agency that granted the concession constitutes another party in the proceeding. The granting agency in air transportation services is the Agency of Transport and Communication (Secretaría de Comunicaciones y Transportes), currently headed by Mr. Jorge Arganis Díaz-Leal.

As a party in the special proceeding, the granting agency appoints the insolvency officers,[2] decides whether the debtor will retain possession,[3] and can veto the reorganization plan.[4]

Hence, Interjet must enter negotiations not only with its creditors, but also with the granting authority to reach a reorganization plan.

For further info about bankruptcy law in Mexico, my work “Bankruptcy Law in Mexico”, written in English, can be accessed at https://works.bepress.com/francisco-rodrigueznepote/4/, where it can be downloaded freely. A complete translation of the legal text can be found there, as well.


[1] Article 237.- The debtor, who, under a concession title, provides a federal, state, or municipal public service, can be adjudicated in bankruptcy.

[2] Article 240.- The granting authority will propose to the judge everything related to the appointment, removal, and replacement of the reorganization officer and the liquidation officer, as well as to supervise their activities. When the special circumstances of the case justify it, the granting authority may establish a remuneration regime different from that provided for in article 333.

[3] Article 241.- Upon adjudication in bankruptcy, and at any time, the granting authority may resolve the removal of the debtor from the company and appoint a person to assume it, when it considers it necessary for the continuity and security in the rendering of the public service.

The granting authority will communicate its determination to the judge, who will promptly take all necessary measures so the person designated by the granting authority takes possession of the company. The occupation will be carried out under articles 180 to 182.

[4] Article 242.- Any plan proposed in terms of Title Fifth shall be notified to the granting authority, who may veto it within the term provided in article 162.

Comentarios

Publicar un comentario

Entradas populares de este blog

Prepackage bankruptcy in Mexico

  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: -       
Leer más

Foreign creditors in Mexican Bankruptcy proceedings.

  Foreign creditors have the same rights and opportunities as the national creditors before a bankruptcy proceeding in Mexico, although there are some exceptions. Creditors are a key factor in bankruptcy. The following is an initial and broad distinction of creditors.           a. Generic creditors. During the pre-bankruptcy proceeding, generic creditors do not participate; only the debtor and the visitor take part in voluntary petitions; and the debtor, the visitor, and the plaintiff (whether a single or group of creditors or the Fiscal Attorney) participate in involuntary petitions. After the bankruptcy adjudication but before the ruling on the allowance of claims, those acting as creditors may participate in the bankruptcy as generic creditors. The generic creditors have the following rights and powers: 1. They have access to the judicial record, the annexes that the debtor submitted with the voluntary petition, the visitor’s report, the bi-monthly reports presented by the r
Leer más

The cart before the horses, the difficult to avoid conversion to the liquidation stage.

The cart before the horses, the difficult to avoid conversion to the liquidation stage. Bankruptcy in Mexico has two successive stages: reorganization and liquidation. When reorganization is not possible, bankruptcy is converted to the liquidation stage. The purpose of the reorganization stage is to maintain the enterprise and pay the allowed creditors through a reorganization plan. The purpose of the liquidation stage is to sell the enterprise – as a going concern or in segments – and pay the allowed creditors. If a plan is not submitted and approved within one hundred and eighty-five calendar days following the publication in the Federal Official Gazette of the summary of the adjudication in bankruptcy, the reorganization stage is converted to the liquidation stage. The court can extend this period by ninety calendar days if the reorganization officer or a certain percentage of the allowed creditors request it. The court may grant a second extension if the debtor and a certain pe
Leer más