Home » Publications and Events » Updates » Finally, judicial respite for companies with financial difficulties in Mexico: Santamarina and Steta
In 2021, 7 out of 10 bankruptcy applications were rejected.
There will be fully specialized courts with legal and economic vision to support negotiations between companies, creditors, tax authorities and employees.
CDMX, March 15, 2022. Carlos Olvera, leading partner of the firm's insolvency area Santamarina and Steta, reported that the Federal Judicial Council has finally approved and ordered the creation of two new courts specializing in commercial bankruptcy, which will surely reverse the dramatic tendency of the courts to reject requests from companies with economic difficulties, which have resorted to this legal mechanism to restructure and reinsert themselves into economic activity.
Report on dismissed bankruptcy proceedings
“The creation of two courts specializing in bankruptcy matters is encouraging news. Last year alone, around 7 out of 10 applications were rejected. In addition to being saturated, the courts previously did not have the material and human resources to assess and address with integrity this type of judicial process, which resulted in further difficulties in achieving negotiations and agreements between the company, its creditors, the tax authorities and the employees, who are the factors involved in the economic and social equation that, if they decide to move in the same direction, can save the entire productive cell,” said.
The specialist pointed out that after almost 22 years since the Bankruptcy Law was published, the entry into operation of the specialized courts on March 7 will undoubtedly contribute to finding a platform to solve all the conflicts and problems that accompany the insolvency and illiquidity of companies, which will be a relief for Mexico's productive society, so affected by the recent political, economic and health events.“Having carried out the main bankruptcy proceedings and restructurings in Mexico, the experience we have had in our Office is that this resource has not only allowed companies to survive, but has reinserted them into the economy with new vigor,” concluded.
