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  • 1.

    Legislation
    What main legislation is applicable to insolvencies and reorganisations?

  • 2.

    Excluded entities and excluded assets
    What entities are excluded from customary insolvency or reorganisation proceedings and what legislation applies to them? What assets are excluded or exempt from claims of creditors?

  • 3.

    Public enterprises
    What procedures are followed in the insolvency of a government-owned enterprise? What remedies do creditors of insolvent public enterprises have?

  • 4.

    Protection for large financial institutions
    Has your country enacted legislation to deal with the financial difficulties of institutions that are considered ‘too big to fail’?

  • 5.

    Courts and appeals
    What courts are involved? What are the rights of appeal from court orders? Does an appellant have an automatic right of appeal or must it obtain permission? Is there a requirement to post security to proceed with an appeal?

  • 6.

    Voluntary liquidations
    What are the requirements for a debtor commencing a voluntary liquidation case and what are the effects?

  • 7.

    Voluntary reorganisations
    What are the requirements for a debtor commencing a voluntary reorganisation and what are the effects?

  • 8.

    Successful reorganisations
    How are creditors classified for purposes of a reorganisation plan and how is the plan approved? Can a reorganisation plan release non-debtor parties from liability, and, if so, in what circumstances?

  • 9.

    Involuntary liquidations
    What are the requirements for creditors placing a debtor into involuntary liquidation and what are the effects? Once the proceeding is opened, are there material differences to proceedings opened voluntarily?

  • 10.

    Involuntary reorganisations
    What are the requirements for creditors commencing an involuntary reorganisation and what are the effects? Once the proceeding is opened, are there any material differences to proceedings opened voluntarily?

  • 11.

    Expedited reorganisations
    Do procedures exist for expedited reorganisations (eg, ‘prepackaged’ reorganisations)?

  • 12.

    Unsuccessful reorganisations
    How is a proposed reorganisation defeated and what is the effect of a reorganisation plan not being approved? What if the debtor fails to perform a plan?

  • 13.

    Corporate procedures
    Are there corporate procedures for the dissolution of a corporation? How do such processes contrast with bankruptcy proceedings?

  • 14.

    Conclusion of case
    How are liquidation and reorganisation cases formally concluded?

  • 15.

    Conditions for insolvency
    What is the test to determine if a debtor is insolvent?

  • 16.

    Mandatory filing
    Must companies commence insolvency proceedings in particular circumstances?

  • 17.

    Directors’ liability - failure to commence proceedings and trading while insolvent
    If proceedings are not commenced, what liability can result for directors and officers? What are the consequences for directors and officers if a company carries on business while insolvent?

  • 18.

    Directors’ liability - other sources of liability
    Apart from failure to file for proceedings, are corporate officers and directors personally liable for their corporation’s obligations? Are they liable for corporate pre-insolvency or pre-reorganisation actions? Can they be subject to sanctions for other reasons?

  • 19.

    Directors’ liability - defences
    What defences are available to directors and officers in the context of an insolvency or reorganisation?

  • 20.

    Shift in directors’ duties
    Do the duties that directors owe to the corporation shift to the creditors when an insolvency or reorganisation proceeding is likely? When?

  • 21.

    Directors’ powers after proceedings commence
    What powers can directors and officers exercise after liquidation or reorganisation proceedings are commenced by, or against, their corporation?

  • 22.

    Stays of proceedings and moratoria
    What prohibitions against the continuation of legal proceedings or the enforcement of claims by creditors apply in liquidations and reorganisations? In what circumstances may creditors obtain relief from such prohibitions?

  • 23.

    Doing business
    When can the debtor carry on business during a liquidation or reorganisation? Is any special treatment given to creditors who supply goods or services after the filing? What are the roles of the creditors and the court in supervising the debtor’s business activities?

  • 24.

    Post-filing credit
    May a debtor in a liquidation or reorganisation obtain secured or unsecured loans or credit? What priority is or can be given to such loans or credit?

  • 25.

    Sale of assets
    In reorganisations and liquidations, what provisions apply to the sale of specific assets out of the ordinary course of business and to the sale of the entire business of the debtor? Does the purchaser acquire the assets ‘free and clear’ of claims or do some liabilities pass with the assets?

  • 26.

    Negotiating sale of assets
    Does your system allow for ‘stalking horse’ bids in sale procedures and does your system permit credit bidding in sales?

  • 27.

    Rejection and disclaimer of contracts
    Can a debtor undergoing a liquidation or reorganisation reject or disclaim an unfavourable contract? Are there contracts that may not be rejected? What procedure is followed to reject a contract and what is the effect of rejection on the other party? What happens if a debtor breaches the contract after the insolvency case is opened?

  • 28.

    Intellectual property assets
    May an IP licensor or owner terminate the debtor’s right to use the IP when a liquidation or reorganisation is opened? To what extent may IP rights granted under an agreement with the debtor continue to be used?

  • 29.

    Personal data
    Where personal information or customer data collected by a company in liquidation or reorganisation is valuable, are there any restrictions in your country on the use of that information or its transfer to a purchaser?

  • 30.

    Arbitration processes
    How frequently is arbitration used in liquidation or reorganisation proceedings? Are there certain types of disputes that may not be arbitrated? Can disputes that arise after the liquidation or reorganisation case is opened be arbitrated with the consent of the parties?

  • 31.

    Creditors’ enforcement
    Are there processes by which some or all of the assets of a business may be seized outside of court proceedings? How are these processes carried out?

  • 32.

    Unsecured credit
    What remedies are available to unsecured creditors? Are the processes difficult or time-consuming? Are pre-judgment attachments available?

  • 33.

    Creditor participation
    During the liquidation or reorganisation, what notices are given to creditors? What meetings are held and how are they called? What information regarding the administration of the estate, its assets and the claims against it is available to creditors or creditors’ committees? What are the liquidator’s reporting obligations?

  • 34.

    Creditor representation
    What committees can be formed (or representative counsel appointed) and what powers or responsibilities do they have? How are they selected and appointed? May they retain advisers and how are their expenses funded?

  • 35.

    Enforcement of estate’s rights
    If the liquidator has no assets to pursue a claim, may the creditors pursue the estate’s remedies? If so, to whom do the fruits of the remedies belong? Can they be assigned to a third party?

  • 36.

    Claims
    How is a creditor’s claim submitted and what are the time limits? How are claims disallowed and how does a creditor appeal? Can claims for contingent or unliquidated amounts be recognised? Are there provisions on the transfer of claims and must transfers be disclosed? How are the amounts of such claims determined?

  • 37.

    Set-off and netting
    To what extent may creditors exercise rights of set-off or netting in a liquidation or in a reorganisation? Can creditors be deprived of the right of set-off either temporarily or permanently?

  • 38.

    Modifying creditors’ rights
    May the court change the rank (priority) of a creditor’s claim? If so, what are the grounds for doing so and how frequently does this occur?

  • 39.

    Priority claims
    Apart from employee-related claims, what are the major privileged and priority claims in liquidations and reorganisations? Which have priority over secured creditors?

  • 40.

    Employment-related liabilities
    What employee claims arise where employees’ contracts are terminated during a restructuring or liquidation? What are the procedures for termination? (Are employee claims as a whole increased where large numbers of employees’ contracts are terminated or where the business ceases operations?)

  • 41.

    Pension claims
    What remedies exist for pension-related claims against employers in insolvency or reorganisation proceedings and what priorities attach to such claims?

  • 42.

    Environmental problems and liabilities
    Where there are environmental problems, who is responsible for controlling the environmental problem and for remediating the damage caused? Are any of these liabilities imposed on the insolvency administrator personally, secured or unsecured creditors, the debtor’s officers and directors, or on third parties?

  • 43.

    Liabilities that survive insolvency or reorganisation proceedings
    Do any liabilities of a debtor survive an insolvency or a reorganisation?

  • 44.

    Distributions
    How and when are distributions made to creditors in liquidations and reorganisations?

  • 45.

    Secured lending and credit (immovables)
    What principal types of security are taken on immovable (real) property?

  • 46.

    Secured lending and credit (movables)
    What principal types of security are taken on movable (personal) property?

  • 47.

    Transactions that may be annulled
    What transactions can be annulled or set aside in liquidations and reorganisations and what are the grounds? Who can attack such transactions?

  • 48.

    Equitable subordination
    Are there any restrictions on claims by related parties or non-arm’s length creditors (including shareholders) against corporations in insolvency or reorganisation proceedings?

  • 49.

    Groups of companies
    In which circumstances can a parent or affiliated corporation be responsible for the liabilities of subsidiaries or affiliates?

  • 50.

    Combining parent and subsidiary proceedings
    In proceedings involving a corporate group, are the proceedings by the parent and its subsidiaries combined for administrative purposes? May the assets and liabilities of the companies be pooled for distribution purposes?

  • 51.

    Recognition of foreign judgments
    Are foreign judgments or orders recognised and in what circumstances? Is your country a signatory to a treaty on international insolvency or on the recognition of foreign judgments?

  • 52.

    UNCITRAL Model Law
    Has the UNCITRAL Model Law on Cross-Border Insolvency been adopted or is it under consideration in your country?

  • 53.

    Foreign creditors
    How are foreign creditors dealt with in liquidations and reorganisations?

  • 54.

    Cross-border transfers of assets under administration
    May assets be transferred from an administration in your country to an administration of the same company or another group company in another country?

  • 55.

    COMI
    What test is used in your jurisdiction to determine the COMI (centre of main interests) of a debtor company or group of companies? Is there a test for, or any experience with, determining the COMI of a corporate group of companies in your jurisdiction?

  • 56.

    Cross-border cooperation
    Does your country’s system provide for recognition of foreign insolvency proceedings and for cooperation between domestic and foreign courts and domestic and foreign insolvency administrators in cross-border insolvencies and restructurings? Have courts in your country refused to recognise foreign proceedings or to cooperate with foreign courts and, if so, on what grounds?

  • 57.

    Cross-border insolvency protocols and joint court hearings
    In cross-border cases, have the courts in your country entered into cross-border insolvency protocols or other arrangements to coordinate proceedings with courts in other countries? Have courts in your country communicated or held joint hearings with courts in other countries in cross-border cases? If so, with which other countries?

  • 58.

    Winding-up of foreign companies
    What is the extent of your courts’ powers to order the winding-up of foreign companies doing business in your jurisdiction?

  • Updates and trends

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Oscós Abogados is a high-profile practice law firm that specialises in both domestic and international litigation. The firm has rich experience and technical expertise in handling arbitration, insolvency, restructuring, creditor’s rights, product liability and bankruptcy within a wide variety of industries that range from banking and financial services to telecommunications, oil and energy.

View more information about Oscós Abogados


Mexico City
Paseo del Río (Joaquin Gallo) 53
Chimalistac, Delegación Coyoacán
CP 04340
Mexico City
Mexico
T: +52 55 12 53 01 00
F: +52 55 12 53 01 00


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