Under Vitro's Mexican restructuring plan--which the U.S. Court of Appeals in New Orleans ruled was unenforceable in the United States--the new bonds issued and payments made by Vitro to bondholders who opposed the restructuring were placed in a trust that stipulates Vitro may collect from this trust the amounts that these creditors are liable for due to these actions.
According to a Vitro release, the Court of Appeals of the United States Fifth Circuit in New Orleans lifted the temporary restraining orders that prevented the collection actions against Vitro and its subsidiaries by the dissident funds.
"In view of this decision, the company [Vitro] could be facing a unique situation, since it has two conflicting orders and therefore two markedly different obligations in both countries," the release reads. "The debt that could form the basis for the dissident funds' collection actions in the United States has been restructured and replaced with new debt in Mexico. Consequently, the company is evaluating the financial implications of this particular situation."
Vitro's announcement follows the U.S. Court of Appeals' ruling against the glass manufacturer, upholding U.S. Bankruptcy Judge Harlin DeWayne Hale's refusal to grant enforcement of Vitro’s Mexican bankruptcy plan, saying it was contrary to U.S. policy. In early December, a U.S. judge then ordered that 10 of Vitro's units be put into U.S. bankruptcy, finding that several of them had taken secret steps to prevent creditors from collecting money owed to them.