Wednesday, June 13, 2012

Mexican Bankruptcy Has New York Hedge Funds Screaming!

A federal judge in Dallas will issue a decision as early as today that could determine whether Mexican glassmaker Vitro SAB pulls off what in the U.S. would be an almost impossible feat: Emerging from bankruptcy cleansed of $1.9 billion in debt, with its shareholder value largely intact.

The prospect has outside creditors howling with rage, especially since they say Vitro’s bonds are governed by U.S. law and backed by guaranties from Vitro’s subsidiaries around the world. A Mexican court in February approved a plan of reorganization that would void those guarantees, as well as denying any payments to creditors who refuse to sign off on the plan.

Lawyers familiar with the case say U.S. Bankruptcy Judge Harlin DeWayne Hale in Dallas is likely to issue a decision today on whether bondholders can block the Mexican reorganization from proceeding….
Read all about it at

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