Vitro in Talks with Creditors
February 13, 2013

by Casey Neeley, cneeley@glass.com and Penny Stacey, pstacey@glass.com

Vitro S.A.B. officials have announced that they are "holding talks with creditors regarding [the company's] financial restructuring process."

The announcement was made at the request of the Mexican stock exchange, according to the statement. In addition, company officials say, "In the event that Vitro has any material information to provide as a result of these discussions, Vitro will inform the Mexican Stock Exchange in a timely fashion."

The statement comes amid reports that the company's stock recently saw a spike not seen since 2010, as the result of the reported pending settlement agreement, according to reports from Businessweek.

A letter filed in the U.S. Court of Appeals for the Fifth Circuit on January 31 directed both parties to submit a brief on their positions on "the impact of the ongoing bankruptcy proceedings in the Northern District of Texas, involving several of Vitro's subsidiaries," by February 8, 2013.

Both letters address whether relief from the involuntary bankruptcy proceedings' automatic stay should be granted in the case.
"The issue of whether relief from the involuntary proceedings' automatic stay should be granted is, however, entirely distinct from the issue of whether the Vitro automatic stay was violated, and it should be addressed in the first instance by the Bankruptcy Court if this Court rules in favor of the Ad Hoc Group in this appeal … even if the Ad Hoc Group could not proceed with respect to Involuntary Proceedings Debtors, it would be immaterial to the relief it seeks in the New York action against Vitro's other subsidiaries, none of which have filed for bankruptcy," says counsel for the noteholders in its letter to clerk Lyle W. Cayce.

"The ongoing bankruptcy proceedings of some of Vitro SAB's subsidiaries have no impact on the sole issue in this appeal: the propriety of the bankruptcy court's automatic stay order," says counsel for Vitro in its letter to Cayce. "Seven of the debtors were not involved in the underlying case that was stayed by the bankruptcy court. And the other ten debtors were not subject to the jurisdiction of the bankruptcy court at the time they cast their votes, which had no impact on the approval of Vitro SAB's concurso plan in any event."

In February 2009, Vitro defaulted on more than $1 billion in bonds. The company completed a Mexican court-approved debt restructuring plan this past February. A Texas court ruled against enforcement of the reorganization in the U.S. in June which led to the appeal.

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