Mexican glassmaker Vitro SAB is heading to a U.S. appeals court to save its restructuring at home from an assault by U.S. creditors in a case that could transport the U.S. Bankruptcy Code across the border, Reuters reported yesterday. The case pits one of Monterrey, Mexico's powerful and politically connected "Group of 10" businesses against U.S. hedge funds, which Latin American critics have reviled as "vultures" for their battle against Argentina's sovereign debt restructuring. Many creditors have come to view chapter 15 as little more than a rubber-stamp process that allows U.S. assets to be folded into a foreign proceeding. However, some legal experts say that the 5th Circuit Court of Appeals could improperly recast it as a tool to impose U.S. bankruptcy law abroad. Vitro's appeal stems from a ruling this month by Bankruptcy Judge Harlin Hale, who refused to enforce the company's Mexican restructuring against U.S. hedge funds led by Aurelius Capital Management and Elliott Management Corp. The hedge fund bondholders had said the restructuring plan violated the U.S. Bankruptcy Code by rewarding shareholders before repaying creditors in full.
