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Thursday, November 29, 2012

Vitro Loses Appeals Court Bid on Mexican Bankruptcy Plan

Per www.globalinsolvency.com:

Thu., November 29, 2012
 
Vitro SAB, the Mexican glassmaker that has been fighting hedge fund Elliott Management Corp. and other creditors over its restructuring, lost an appeals court bid to enforce its bankruptcy plan in the U.S., Bloomberg reported. The U.S. Court of Appeals in New Orleans ruled against Vitro today and upheld a bankruptcy court ruling that denied enforcement of the reorganization, a result that Vitro had warned would create “chaos” for the company. “Vitro cannot propose a plan that fails to substantially comply with our order of distribution and then defend such a plan by arguing that it would suffer were it not enforced,” the court said. “Vitro’s two-wrongs-make-a-right reasoning is unpersuasive.” Vitro was appealing a decision by U.S. Bankruptcy Judge Harlin DeWayne Hale in June that handed a victory to holders of Vitro’s $1.2 billion in defaulted bonds. Hale refused to grant enforcement of Vitro’s Mexican bankruptcy plan, saying it was contrary to U.S. policy. Vitro, which makes glass containers and car windshields, defaulted on $1.5 billion of debt in 2009 after construction and auto-glass sales fell. Vitro won approval for its reorganization plan in Mexico and then asked Hale to enforce it in the U.S.

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