Publish in Special Reports - Wednesday, October 23, 2013
Maxcom filed for bankruptcy in Wilmington, Delaware instead of Mexico. (Photo: Tim Kiser)
Mario Brando from Brando y Asociados, Rodrigo Callejas from Carrillo y Asociados and Edward H. Davis' Jr, a partner at Astigarraga Davis.
Latin American companies see benefits of using US Chapter 11 for bankruptcy.
BY JOACHIM BAMRUD
When Mexican telecommunications company Maxcom failed to restructure its debt, it decided to use the US bankruptcy law known as Chapter 11. It filed for bankruptcy protection in the Bankruptcy Court of the State of Delaware.
On October 11, it exited bankruptcy after 79 days of bankruptcy proceedings, during which time it reduced debt and increased its capital, emerging stronger than before.
"Maxcom has managed to implement and complete the bankruptcy proceedings, with a healthy balance sheet and sustainable and a new capital contribution of the new majority shareholders,” the firm said in a filing to the Mexican stock exchange. “This capitalization will allow Maxcom to continue to improve and expand its telecommunications network and solidifying its long-term prospects and operating performance.”
Maxcom is not the only Latin American company that opted to file for bankruptcy in the United States rather than its own home country.
“There have been several Latin American companies that have filed Chapter 11 cases rather than seeking file a liquidation/bankruptcy in their home country,” says Edward H. Davis, Jr, a partner at Astigarraga Davis.
Latin America lawyers are starting to turn to US courts to seek restructuring alternatives to their domestic laws,” adds Mario Brando, a partner at Brando & Asociados in Venezuela. “Considering that ...
Keywords: Astigarraga Davis, Brando & Asociados, Brigard & Urrutia, Carrillo & Asociados, Colombia, Globopar, Maxcom, Venezuela,Vitro