Vitro SAB, Mexico’s largest glassmaker, said a judge in the country rejected some challenges to the company’s debt restructuring by bondholders including Elliott Management Corp.
Judge Claudio Perez in Monterrey ruled that certain bondholders’ appeals of a court decision recognizing and establishing the priority of claims in the company’s Mexican bankruptcy process lacked merit, Vitro said in a statement. The judge “also affirmed the company’s challenge regarding the calculation of interest the bondholders are attempting to collect,” Vitro said.
“We are very pleased with this decision as it confirms once again that Vitro has acted in accordance with the law,” Alejandro Sanchez, Vitro’s general counsel, said in the statement. “In addition to being an important step towards the final conclusion of the various appeals initiated by certain dissident bondholders, this ruling also creates a very important precedent for ongoing proceedings.”
Vitro, based in San Pedro Garza Garcia, Mexico, defaulted on $1.2 billion of bonds in February 2009 as the U.S. recession reduced demand for construction and auto glass. While the company won Mexican court approval for its debt restructuring plan earlier this year and exited bankruptcy, the plan is currently unenforceable in the U.S. after a judge in Dallas ruled against it in June.
The company said last month there were 23 appeals or challenges pending in the Mexican courts that could take more than six months to resolve. Bondholders including Elliott and Aurelius Capital Management have said the company underestimated by as much as two years how long the Mexican appeals process could take.
Judge Perez issued his decision on Nov. 23 and notified the company of the decision today, Vitro said in the statement.
Vitro “anticipates that this decision will be contested through an injunction,” it said. “The company will continue to assert its rights, and remains confident in the strength of its arguments.”
Donald Cutler, a spokesman for the bondholders who are challenging Vitro in court, declined to comment by e-mail.
Vitro is appealing the U.S. court decision and the Mexican government has also filed papers urging the appeals court to reverse the decision and enforce the reorganization of Vitro in the U.S.