In Mexico, only business debtors, trusted estates, and legal entities that are incorporated under mercantile laws are eligible to file for bankruptcy. The most common commercial companies incorporated in Mexico are Sociedad Anónima (limited liability stock corporations) and Sociedad de Responsabilidad Limitada (limited liability partnerships), which are governed by the Ley General de Sociedades Mercantiles (General Commercial Companies Law).
Directors and Officers (D&Os) of a commercial company are jointly liable for breaching the obligations inherent in their charge. D&Os are obliged to comply with the company's bylaws, to abstain from voting in cases where they may have a conflict of interests, to maintain confidentiality, to maintain accounting records according to the law, to execute the shareholders' resolutions, to inform the statutory auditor about any irregularities of the former D&O, to timeously submit the financial statements, and to abstain from distributing dividends if the applicable reserves are not constituted. If the company is publicly held according to the Ley del Mercado de Valores (Stock Market Law), the additional obligations include informing the board of any relevant information, reporting irregularities to the auditing body or external auditor, and to remain loyal to the company.
Except in the case of bankruptcy, an action against the D&O can be brought only by the company itself following prior favorable resolution of the shareholders or by the shareholders themselves if they voted in favor but were outvoted and represent at least 25 percent of the equity. In cases of publicly held companies, the action can be brought by the company and the shareholders that represent at least five percent of the equity; the shareholders do not need to meet and vote to institute the action. D&O can avoid liability through corporate compliance, that is, if they prove that they acted according to the corporate rules, bylaws, or shareholders’ resolutions, or according to the information procured by independent experts. For example, the Mexican airline Grupo Aeroméxico, S.A.B. de C.V., a publicly held company incorporated under Mexican law, filed for a chapter 11 in a New York court.
The company's creditors, only have a limited standing to bring actions against D&Os outside bankruptcy.
Within a bankruptcy proceeding, the D&Os of the bankrupt party are liable to the debtor's estate for damages from the following events: voting in a session despite having a conflict of interest, favoring a third party or shareholder to the detriment of the others, procuring false information about the company, manipulating the accounting records, and committing any unlawful act.
The debtor and shareholders that represent at least twenty-five percent of the equity may bring the liability action before the bankruptcy court through an ancillary proceeding. Unlike an action outside bankruptcy but similar to the case of publicly held companies, shareholders do not need to meet and vote to bring an action against the D&O. Upon relief, the D&O is removed. The plaintiff and the D&O may settle upon approval of the Trustee.
Regarding criminal liability, the D&Os of the debtor that knowingly record false transactions or expenses or deceitfully commit any act in detriment the debtor's estate, for their benefit or the benefit of third parties, will be penalized with three to twelve years in prison.
D&Os can avoid liability, even criminal liability, through corporate compliance. However, the liability in matters of bankruptcy cannot be excluded ex-ante in the debtor's corporate rules and bylaws.
In matters of fraudulent conveyances, D&Os can also be held liable but cannot avoid liability through corporate compliance. Certain creditors may bring this action before the bankruptcy court, but there is no possibility of settlement.