U.S. Bankruptcy Court Agrees to Enforce Vitro S.A.B.'s Mexican Plan of Reorganization
Vitro Plans to Appeal Refusal to Enforce Release of Subsidiary Guarantees
SAN PEDRO GARZA GARCIA, Mexico, June 13, 2012 /PRNewswire/ -- Vitro S.A.B. de C.V. (BMV: VITROA) announced today that the U.S. Bankruptcy Court in Dallas, Texas, has ruled that it will enforce in the U.S., in part, the terms of the financial restructuring of Vitro's Mexican Plan of Reorganization. Specifically, the Bankruptcy Court agreed to enforce in the U.S. the Company's Mexican Plan of Reorganization with respect to Vitro SAB, but did not enforce the release of Vitro's subsidiaries from liability on their guarantee obligations under Vitro's now-restructured notes. Vitro intends to immediately appeal the Bankruptcy Court's refusal to enforce the Vitro restructuring at the subsidiary level to the United States Court of Appeals for the Fifth Circuit.
The ruling by Hon. Harlin D. Hale recognizes that the Mexican bankruptcy process affords all creditors fundamental fairness and due process, as required by Chapter 15 of the U.S. Bankruptcy Code in order to enforce a restructuring plan approved in a foreign proceeding. Although the Bankruptcy Court refused to enforce the release of Vitro's subsidiaries, which was also approved by the Mexican Court, Vitro does not anticipate this refusal will materially impact Vitro's ability to serve its U.S. customers, and notes that one of its key subsidiaries in the supply of products to U.S. customers is currently protected as a debtor in a separate and distinct Concurso proceeding in Mexico.
"We are pleased that the Court has recognized the validity of the Concurso process generally, and enforced the Mexican Court's order approving the company's Plan of Reorganization with respect to Vitro SAB," said Claudio Del Valle, Vitro's Chief Restructuring Officer. Mr. Del Valle added: "Today's ruling is important for all of our stakeholders, including our 17,000 employees, and marks a significant milestone in our successful financial restructuring."
Regarding its plan to appeal a portion of the ruling, Mr. Del Valle stated: "We will defend the enforcement of Vitro's restructuring at the subsidiary level in the U.S."
Vitro's restructuring complied with applicable Mexican bankruptcy law which, since its enactment in 2000 by the Mexican legislature, has been recognized by U.S. courts in Chapter 15 proceedings without exception as providing fair, clear rules for the administration of multinational restructurings such as Vitro's. Notably, no U.S. bankruptcy court has ever denied a request to enforce a plan of reorganization approved under the Mexican bankruptcy law in its 12 year history.
Despite one of the highest recoveries in the history of such processes in Mexico, the dissident funds have and continue to intentionally try to risk the destruction of Vitro's businesses for the mere prospect, not guarantee, of a higher return on their investment. The portion of the Bankruptcy Court's decision enforcing the company's Plan of Reorganization in the U.S. with respect to Vitro SAB represents another loss for the group of dissident bondholders that waged a strong opposition to enforcement of the Chapter 15 ruling. Vitro anticipates the dissident bondholder group will appeal this portion of the decision, also to the United States Court of Appeals for the Fifth Circuit.
Vitro, S.A.B. de C.V. (BMV: VITROA), is the leading glass manufacturer in Mexico and one of the world's major glass companies, backed by more than 100 years of experience in the industry. Founded in 1909 in Monterrey, Mexico, the company currently has subsidiaries in America and Europe, which offer quality products and reliable services to meet the needs of two different types of business: glass containers and flat glass. Companies of Vitro produce, process, distribute and market a wide range of glass articles which are part of the daily life of thousands of people. Vitro offers solutions for multiple markets including food, drinks, wines, liquors, cosmetics and pharmaceuticals, as well as the architectural and automotive. The company is also a supplier of raw materials, machinery and equipment for industrial use. As a socially responsible company, Vitro implements various initiatives to contribute to improving the quality of life of its employees, providing support to the communities where it has presence, preserving the environment and favoring an ethical and transparent management. For more information, please consult the website: http://www.vitro.com
This announcement contains statements about future events regarding Vitro, S.A.B. de C.V. and its subsidiaries. While Vitro believes that forward-looking statements are based on reasonable assumptions, all such statements reflect Vitro's current views with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in this press release. Many factors could cause Vitro's actual results, performance or achievements to be materially different from anticipated future results, performance or achievements that may be expressed or implied by such forward-looking statements. In particular, completion of the offers described above or the Concurso Plan on the basis described, or at all, is uncertain. Vitro does not assume any obligation to, and will not, update these forward-looking statements.
For further information, please contact:
Roberto Riva Palacio
Vitro, S.A.B. de C.V.
+ 52 (81) 8863-1661
Liz Cohen / Michael Gonda
(212) 445-8044 / 8275
Jesus N. Medina
Vitro S.A.B. de C.V.
+ 52 (81) 8863-1730
Kay Breakstone / Barbara Cano
(646) 452-2332 / 2334
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