Auto Glass Company Vitro to Appeal Recent Bankruptcy
Windshield Guy News Tuesday, July 03, 2012
Windshield Guy News
The U.S. Court of Appeals for the 5th Circuit has granted Vitro S.A.B. Permission to appeal a recent call by the U.S. Insolvency Court for the District of Northerly Texas not to impose the firm's Mexican reorganization plan in the United States. Additionally, the court has issued an order granting a stay for the expiration of a non-permanent restraining order ( TRO ) previously instated in the case, at Vitro's request.
The TRO, which had been set to expire today at five p.m, proscribes Vitro's creditors "from taking actions to effect judgments against Vitro SAB and its non-debtor affiliates."
"It also defends the appellees by enjoining Vitro SAB and its non-debtor associates from transferring any assets other than in the normal course of business," writes the company in its June 28 motion. "... Absent the TRO, Vitro will need to somehow go along with fundamentally antagonistic orders issued by a court in the U. S. and a court in Mexico and, also, Vitro and its subsidiaries, and their customers, will be exposed to relentless attacks by the apellees across several courts in the United Stateswhich attacks are expressly prohibited by order of the Mexican court."
Without the TRO, Vitro officials allege that the company's creditors would begin "turnover events against Vitro customers," as they went and did before the TRO was entered in March.
Vitro's request for preliminary injunction ( which resulted in the stay of the TRO expiration ) also can include some discernment towards its view of the insolvency court's contemporary decisionand its confidence for the appeal.
The company alleges that the bankruptcy court's decision not to enforce the Mexican reorganization plan in the U.S. "was based solely on the indisputable fact that the Concurso plan included what the insolvency court called a 'release' of the needs of non-debtor guarantors of certain of Vitro SAB's restructured indebtedness."
"Indeed, the Insolvency Court reached this conclusion notwithstanding specifically rejecting debates manufactured by the objecting noteholders the Mexican process that led to the Concurso plan was either procedurally prejudiced for creditors or the product of corruption, or that such plan would have a harmful impact on the credit markets in the United States," writes Vitro. "In not effecting the Concurso plan, the insolvency court totally ignored binding 5th Circuit law and issued a unparalleled, erroneous decision which will have far-reaching negative effects on the way forward for Chapter 15 and cross-border judicial relations between the U. S. and Mexico."
Company officials foretell they'll "succeed on the advantages of this appeal in light of binding Fifth Circuit case law .... That compels reversal of the legal conclusions reached by the Insolvency Court."
"Second, there is no doubt that Vitro will suffer irreparable harm due to both the legal and money uncertainty resulting from Vitro entities having to obey competing court orders in the United States and Mexico, which conflict by, among other things, making radically different liabilities for Vitro in the U. S. and Mexico, and Vitro and its shoppers having to defend against serial creditor enforcement actions in the United States," writes the company.
The court's order granting the stay of the TRO does not supply a specific cut-off point for when the TRO will now expire, but is "pending further order of [the court]." In addition, the court has denied a motion by Vitro for expedited consideration of its appeal.
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