EMTA Seminar: Developments in Mexican Insolvency Law, Recent Cases and Implications for EM Corporate Bonds in New York
Due to the effects of Hurricane Sandy, EMTA had to postpone its November 1, 2012 Seminar on Mexican Insolvency Law to November 30. The Seminar was held at EMTA’s offices in midtown New York.
The Panel discussion focused on the latest developments in the Vitro litigation and Cemex refinancing under Mexico’s Ley de Concursos Mercantiles (the Business Reorganization Act of 2000).
The Panel was composed of:
Paul Kirby (IFR – Thomson Reuters) – Moderator
Arturo Porzecanski (American University)
Howard Kleinman (Dechert)
Jonathan Prin (J.P. Morgan Asset Management)
Mr. Porzecanski provided some background on the Mexican bankruptcy regime, Mr. Kleinman summarized the recent developments in the Vitro litigation (especially with respect to the recent 5th Circuit ruling), Mr. Prin explained how Cemex “got it right” and Mr. Kirby led the panelist discussion on the following areas of interest:
How much in additional spreads must issuers pay to compensate investors for unclear recoveries?
What are the costs to the Mexican economy of the uncertainty of Mexican bankruptcy procedures?
How have the Vitro and Cemex experiences affected new issuance documentation - do bond covenants matter?
Why is the Vitro ruling important to foreign creditors and how important are guarantees in the wake of such ruling?
Are there other Mexican credits that could face refinancing issues?
Contrast Elektra with SanLuis, and discuss Durango, Iusacel and Metrofinanciera.
What is the role of the conciliator in Mexican bankruptcy proceedings? How did this play out in Vitro’s case and have other issuers used similar tactics?
Is there a regulatory framework for DIP financing in Mexico? If not, how does this impact restructurings in that country?
Is the law likely to be amended to prevent the use of inter-company claims to cram down restructuring plans proposed by shareholders?
What else can creditors do to protect themselves?
This Seminar was part of a continuing series of panels and presentations that EMTA was pleased to sponsor on various topics of interest to Emerging Markets investors and other market participants, and is part of EMTA’s Legal & Compliance Seminars. CLE credit is available for NY attorneys.