Temporary Restraining Order Granted in Vitro Bankruptcy Case
July 17, 2012
by Katie O'Mara, email@example.com
The U.S. Court of Appeals for the Fifth Circuit has granted a temporary restraining order (TRO) while Vitro S.A.B. appeals a recent decision by the U.S. Bankruptcy Court for the District of Northern Texas not to enforce the company's Mexican reorganization plan in the U.S. The court has ordered that, “the temporary restraining order entered by the bankruptcy court shall remain in place during the pendency of this appeal or until further order of this court.”
The court had previously granted a stay for the pending expiration of the TRO at Vitro's appeal, which was scheduled to occur at 5 p.m. on June 29, but this ruling extends it even further.
“We are pleased that the Fifth Circuit has extended the temporary restraining order, thereby providing important clarity and certainty for Vitro's U.S. customers throughout the appeal process,” says Robert Riva Palacio, a spokesperson for Vitro.
The TRO prohibits Vitro's creditors "from taking actions to enforce judgments against Vitro SAB and its non-debtor affiliates,” according to a previous motion from Vitro seeking the enforcement of the TRO.
"It also protects the appellees by enjoining Vitro SAB and its non-debtor affiliates from transferring any assets other than in the ordinary course of business," wrote the company in its June 28 motion. " ... Absent the TRO, Vitro will be expected to somehow comply with fundamentally conflicting orders issued by a court in the United States and a court in Mexico and, moreover, Vitro and its subsidiaries, and their customers, will be exposed to relentless attacks by the appellees across several courts in the United States-which attacks are expressly forbidden by order of the Mexican court."
Without the TRO, Vitro officials allege that the company's creditors would begin "turnover proceedings against Vitro customers," as they did before the TRO was entered in March.
Vitro’s brief in the appeal case is due to the court by August 30.
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