[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN MEXICO] 58
KEY FACTS OF BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS UNDER MEXICAN LAW Preface
this Institute, specialists are appointed by means of a random procedure. In 2007, the CIL underwent several reforms, most importantly, the addition of a pre-packed reorganization proceeding, whereby the company and the majority of its creditors may file for a proceeding in which a pre-agreed reorganization agreement is accompanied by an insolvency petition. In 2014, the government adopted a major banking sector reform (the Financial Reform), which reformed the Commercial Insolvency Law, as well as other legislation. One of the main purposes of the Financial Reform was to eliminate legal gaps in the Commercial Insolvency Law that permitted the courts to interpret the legislation broadly and, on a case- by-case basis. Furthermore, the Financial Reform also introduced certain provisions regulating inter- company debts to determine whether the company is to be declared commercially insolvent or be approved for a reorganization agreement between the company and its creditors. On August 9, 2019, the CIL was amended to incorporate provisions that would allow majority state-owned companies to request to be declared commercially insolvent or in bankruptcy. Additionally, on March 4, 2022, an order issued by the Council of the Federal Judicature was published in the Federal Official Gazette, stating the creation of two new Federal Courts specialized in attending insolvency proceedings governed by the CIL 1 . Therefore, starting March 7, 2022, the First and Second District Courts,
On 12 May 2000, the Commercial Insolvency Law (the “ CIL ”) was published in the Federal Official Gazette, and it entered into full force and effect the next day. This law replaced the 1943 Law governing the Suspension of Payments and Bankruptcy, and all other legal provisions that opposed the provisions of the new CIL. Pursuant to its preface, the CIL has the principal purpose of creating a modern regulatory framework that allows the conservation of companies undergoing a financial and economic crisis. To this end, the figure of ‘conciliation’ was created to make sure that the merchant and its creditors reach an agreement for the payment of the merchant’s liabilities over a reasonable period. If reaching a reorganization agreement is unfeasible, the CIL establishes a procedure for the orderly liquidation of the merchant’s assets and rights while attempting to maximize the proceeds of the sale, applying the funds obtained therefrom to the payment of the merchant’s liabilities, following a fair order and preference regarding the differences between the relevant creditors. The CIL maintains the federal judge as the central body and rector of the commercial insolvency proceeding; however, as previously stated, it recognizes that she or he must be aided in the performance of his or her functions by specialists in administrative, commercial, industrial, economic and financial aspects, so that the judge may focus efforts on strictly legal tasks. As a result, the CIL created the Federal Institute of Commercial Insolvency Specialists (widely known for its initials in Spanish as “ IFECOM ”). According to the indications of the CIL and the General Rules issued to this effect by
located across the Country, and which are appointed based on the domicile of the relevant Merchant.
1 The above-mentioned reform has not yet been included in the CIL, which currently states that all commercial insolvency proceedings are conducted before Federal District Judges,
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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