Chapter 14 Summary
This chapter presents a discussion on the bankruptcy laws of Mexico.
Accordingly, while acknowledging the role of the bankruptcy laws
of the 31 states as well as the Federal District, the focus of this
chapter is on the Mexican Bankruptcy Code (Ley de Quiebras y
Suspension de Pagos- LQSP). The Mexican Bankruptcy code is a
federal law enacted in 1943 to apply to the reorganization or liquidation
of all person engaged in commerce, with a few specific exceptions.
The LQSP is derived from Article 23 of the Mexican Constitution
which grants to the national Congress the power to legislate in
matters of "commerce."|
The three major areas of bankruptcy are addressed in this chapter. Court Structure, is important as Mexico does not have specialized bankruptcy courts or judges, except in the Federal District. Thus, as a matter of practice, corporation intending to commence a bankruptcy frequently change domicile to take advantage of the Federal District jurisdiction. Liquidation is one of the more common forms of bankruptcy and is discussed at length. A liquidation case can be commenced voluntarily or involuntary. Reorganization (Suspension de Pagos) is the third area discussed within the chapter, and can only be commenced voluntarily by the debtor.
Notable activities which will be discussed in this chapter, include: avoiding powers, classification of claims and creditors, plans for payment, separation of assets, and types of bankruptcies and rehabilitation. Discussion is also reserved for fundamental issues such as concurrent or exclusive jurisdiction over respective bankruptcy proceedings, the role a trustee or debtor in possession plays in a proceeding, and the effects of such a proceeding, including liquidation.