In the Matter of Vitro S.A.B. de C.V.
United States Court of Appeals for the Fifth Circuit
701 F.3d 1031 (2012)
Vitro S.A.B. de C.V. (debtor), a Mexican glass-manufacturing holding company, borrowed about $1.2 billion through unsecured notes guaranteed by its subsidiaries, and after its business declined it filed for bankruptcy in Mexico and proposed a reorganization plan extinguishing the notes and discharging the subsidiaries' guarantees, even though the subsidiaries themselves were not debtors. The plan was approved only because Vitro's own subsidiaries held more than half the voting claims through intercompany debt. A U.S. bankruptcy court refused to enforce the plan because it would wipe out the nondebtor subsidiaries' guarantee obligations, and Vitro appealed.
Whether, under section 1507 of the bankruptcy code, a United States bankruptcy court may grant relief related to a foreign bankruptcy proceeding if the relief requested is substantially in accordance with relief that would be granted in similar circumstances under the United States Bankruptcy Code.