MEXICO Law and Practice Contributed by: Alejandro Sainz, Gabriela Avendaño and Daniel Pardo, Sainz Abogados
Sainz Abogados Torre del Bosque Blvd. M. Ávila Camacho 24 Piso 20° Lomas de Chapultepec 11000, Mexico City Mexico Tel: +52 55 9178 5052 Email: info@sainzmx.com Web: sainzmx.com
1. Overview of Legal and Regulatory System for Insolvency/Restructuring/ Liquidation 1.1 Legal Framework The Mexican law on insolvency and bankruptcy ( Ley de Concursos Mercantiles ) (the LCM or “Concursos Law”) is a federal, specialised law that governs all the steps of the formal in-court federal insolvency pro - cedures available under Mexican law for distressed companies. This is known as the Concurso Mercantil or Concurso . The laws applicable to restructurings and insolvency proceedings are mainly: • the Concursos Law; • the General Law on Business Organisations; • the Law of Credit Institutions; and • the Law of Insurance and Bonds Institutions. 1.2 Types of Insolvency The Concursos Law is a federal, specialised law that governs the sole formal in-court federal insolvency procedure available under Mexican law for compa - nies, establishing all the procedural steps, including detailed rights and remedies of creditors, whether aimed at a restructuring process (phase of concilia - tion or conciliación ) or liquidation (phase of liquidation or quiebra ). A petition for insolvency or Concurso Mercantil in Mexico is commenced by (i) the company filing a vol - untary concurso petition (a “voluntary petition”), (ii) a creditor or other interested party filing an involuntary lawsuit (an “involuntary petition”), or (iii) the company filing a pre-packed voluntary petition (a “pre-packed
petition”) with the support of a simple majority of its creditors. 1.3 Statutory Officers The competent authority to hear insolvency and com - mercial bankruptcy cases is the specialised Federal Bankruptcy Court located in Mexico City (the “Bank - ruptcy Court”). The Bankruptcy Court is the authority overseeing the insolvency proceeding. The Federal Institute of Specialists for Insolvency Pro - cedures ( Instituto Federal de Especialistas de Concur- sos Mercantiles or IFECOM) was created specifically to attend insolvency proceedings governed by the LCM, being an entity of the federal judicial branch that participates in a concurso proceeding and that has the authority to issue General Rules applicable to insolvency proceedings governed by the Concursos Law and assist the Bankruptcy Court when a con- curso procedure is taking place. IFECOM directs and administers a group of individuals able to carry out the duties of so-called specialists in the LCM. These indi - viduals, who are selected, monitored, and regulated by IFECOM, will serve as examiners, conciliators, or liquidators (receivers) in LCM-compliant insolvency processes. Upon the admission of the voluntary or involuntary petition by the Bankruptcy Court, the judge orders IFECOM to appoint an independent examiner. The examiner cannot be appointed by the debtor or credi - tors and has no conflict of interest. The examiner is the only authority entitled by the Concursos Law to determine if the debtor meets the test for insolvency under the statute. During this preliminary visita stage,
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