Insolvency 2025

MEXICO Law and Practice Contributed by: Alejandro Sainz, Gabriela Avendaño and Daniel Pardo, Sainz Abogados

conciliación ) or liquidation (phase of liquidation or quiebra ). The second stage of a concurso procedure, if appli - cable, consists of the bankruptcy or liquidation stage. The debtor may be declared bankrupt if: • the conciliation stage ends without the parties reaching a creditors’ reorganisation agreement; • the debtor fails to comply with the creditors’ reor - ganisation agreement; • the debtor requests its bankruptcy; or • the conciliator requests the debtor’s bankruptcy, and the court approves it. 5.2 Course of the Liquidation Procedure If the Concurso Mercantil proceeds to the liquidation stage, IFECOM appoints an independent receiver, liquidator, or trustee ( síndico ) (the “receiver”) to oper - ate the company in the liquidation stage. The receiver then makes public the Order for Liquidation and files a report concerning the company’s books and records, assets, and balance sheet. All of the company’s assets are turned over to the receiver. The receiver then takes steps to liquidate or otherwise dispose of the debtor’s assets for the highest possible price pur - suant to the rules and procedures expressly provided in the Concursos Law. The proceeds are then used to provide distributions to creditors in accordance with the claims and rankings set forth in the recognition judgment. The receiver follows the LCM’s strict rules of publicity and operability to guarantee the transpar - ency of a sale procedure and follows the guidance and forms determined by IFECOM. The liquidation stage is supervised by IFECOM and the receiver, and the length of the procedure will vary depending on the type of industry and the time required to auction, sell and reach agreements among creditors and the conciliator to offset claims. The liq - uidation stage is intended to terminate any pending company operations, collect any amounts in favour of the debtor, and liquidate any outstanding amounts of the debtor in favour of creditors and, ultimately, its shareholders. The liquidation concludes with the can - cellation of the company’s by-law registration.

Pursuant to Article 198 of the LCM, the sale of the debtor’s assets is carried out through a public auction. The auction cannot occur sooner than ten days after and later than 90 days after the publication of the call for an auction. The receiver must notify the call for the auction pursuant to the IFECOM rules. 5.3 The End of the Liquidation Procedure(s) The liquidation stage concludes once the receiver has completed the realisation of all assets in the debtor’s estate to pay creditors in accordance with the ranking judgment. If funds are insufficient, the receiver may petition for the closing of the liquidation stage. Under the Concursos Law, a reorganisation plan can still be agreed upon, even during the liquidation stage. 5.4 The Position of Shareholders and Creditors in Liquidation Please see 4.6 The Position of Shareholders and Creditors in Restructuring, Rehabilitation and Reor- ganisation . 6. Cross-Border Issues in Insolvency 6.1 Sources of International Insolvency Law Mexico was one of the first countries to adopt the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insol - vency (the “Model Law”), which was expressly incor - porated in Title 12 of the LCM. 6.2 Jurisdiction The LCM, consistent with the Model Law, recognises two types of foreign proceedings: foreign “main” pro - ceedings and foreign “non-main” proceedings. A for - eign main proceeding takes place in the jurisdiction in which the debtor has its “centre of main interests” (COMI). A foreign non-main proceeding, on the other hand, takes place in any country where the debtor has any establishment. The LCM provisions describ - ing “main” and “non-main” proceedings, as well as the definitions of COMI and “establishment”, come directly from the Model Law. 6.3 Applicable Law The applicable law is Title 12 of the LCM.

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