Vitro Seeks to Recover $1.6 Billion in Damages
December 18, 2012
by Casey Neeley, email@example.com
Vitro announced yesterday it has initiated a process in a Mexican
court aimed at recovering close to $1.6 billion USD in damages resulting
from lawsuits which placed the company and 17 subsidiaries into
involuntary bankruptcy, later dismissed on appeal.
The Mexican glassmaker completed a bankruptcy restructuring plan
in Mexico in February. Enforcement of the same restructuring plan
was denied in the U.S. in November.
According to the Mexican restructuring plan, newly issued bonds
and payments currently are held in a trust for noteholders who do
not accept the Mexican plan.
"It should be noted that under the approved restructuring plan,
the new bonds issued and payments made by Vitro to bondholders who
opposed the restructuring were placed in a trust which stipulates
that Vitro may collect from this trust the amounts that these creditors
are liable for due to these actions," says Vitro in a statement
released yesterday. "The funds that are exposed to these damages
are Moneda, Brookville Horizons Fund, Davidson Kempner Distressed
Opportunities Fund and Knighthead Master Fund."
"Under the applicable legal framework in Nuevo Leon, the amount
claimed could reach US $1.59 billion, which corresponds to 20 percent
of the total amount claimed at the time by the so-called vulture
funds from each of the companies in those proceedings," continues
Vitro in the statement.
"If they do have such agreements, we will pursue such recoveries
from all relevant parties, including Aurelius and Elliott," says
Claudio del Valle, chief restructuring officer of Vitro.
The Court of Appeals of the United States Fifth Circuit in New
Orleans had ruled in favor of granting a motion to lift the temporary
restraining orders put in place that initially prevented collection
actions against Vitro and its subsidiaries.
"In view of this decision the company could be facing a unique
situation, since it has two conflicting orders and therefore two
markedly different obligations in both countries," says Vitro. "The
debt that could form the basis for the dissident funds' collection
actions in the United States has been restructured and replaced
with new debt in Mexico. Consequently the company is evaluating
the financial implications of this particular situation."
Donald C. Cutler, spokesperson for the noteholders, declined to
In February 2009, the Mexico-based manufacturer defaulted
on more than $1 billion in bonds. Vitro completed a Mexican court
restructuring plan this past February. A Texas court ruled
against enforcement of the reorganization in the U.S. in June
which led to the appeal
decided in November. Mexican officials showed their support of the
appeal by filing Amicus
Curiae with the Fifth Circuit. Additionally, Mexico's Second
Circuit Court in Monterrey ruled
in favor of Vitro November 27, upholding the legitimacy of the
company's restructuring under Mexican law. Vitro filed a petition
for reconsideration of the U.S. appeal case December 13.
This story is an original story by AGRR™ magazine/glassBYTEs.com™. Subscribe to AGRR™ Magazine.
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