Next May marks the 22nd anniversary of the enactment of the Commercial Insolvency Law and in this period Mexico has not even reached 900 commercial insolvencies processed -about 40 per year-, a tiny amount for an economy like the Mexican, laments Fernando Pérez Correa. , partner of the Pérez Correa González firm, who has been dedicated for almost 30 years to the restructuring of business liabilities. With this hard data in hand, the lawyer does not hide his optimism that this situation will change with the launch of the first two courts specialized in commercial bankruptcy in Mexico, at the beginning of last March.
The key word is specialization. Over the last 22 years, the limited popularity that commercial bankruptcy has achieved –created to ensure the survival of companies in the event of insolvency– goes hand in hand with insufficient capacity and preparation of the Mexican judicial system to unburden expeditious and efficient bankruptcy proceedings.
“We can attribute this to a lack of knowledge, to the fact that the Law has not been well socialized. A big pending issue that we had is that we did not have specialized courts in the matter,” he says in an interview.
The efficient processing of this type of matter, he explains, requires judges to have technical knowledge in areas such as administration, finance, accounting or taxes, which was not always achieved in local courts, for whom commercial bankruptcy represents, on many occasions, a one more matter, among others, of civil, commercial and even criminal matters.
We haven’t been very successful in Mexico because we didn’t have the right pitch. The district courts were not the right court (for commercial bankruptcy) because it is a very specialized matter”
Fernando Pérez Correa, partner of the Pérez Correa González office
In early March, the Federal Judiciary Council (CJF) announced the opening of the First and Second District Courts for Bankruptcy Matters, based in Mexico City. The CJF determined that they will take charge of the contests that entered any court as of November 16, 2020.
“An advantage of the new design is that, in matters of amparo, when we complain about the actions of a court, the one who is going to know is the other. Between the two of them they are going to achieve common criteria”, remarks Pérez Correa.
The importance of these uniform criteria, he says, is that they will grant certainty to the parties, which should encourage more companies to opt for commercial bankruptcy as the first and not the last option to restructure their debts, as judges and actors understand that the bankruptcy “is not a lawsuit between creditors and debtors, but an effort to save an economic unit.”
For Pérez Correa, another effect will be that large Mexican companies that issue financial instruments abroad will have more incentives to restructure in Mexico and not in the United States, a place where there is more confidence to take these cases, but it is more expensive.