International Insolvency & Restructuring Report 2023-24

Luis Palomino autor

The idea behind this article is that in a few lines the reader will have a clear idea of the four basic changes needed to improve the Mexican insolvency system

to improve the Mexican insolvency system. The great news is that one of them just happened a year ago in 2022. Regarding the other three, the forum of Mexican lawyers dedicated to insolvency, together with the competent authorities, are working hard to make them happen soon, and it is in these spaces where we hope to draw the attention of institutions such as the World Bank, UNCITRAL, III2 , IICD3 , INSOL and our colleagues within these institutions to achieve it.

Since the entry into force of the Mexican Insolvency Law “Ley de Concursos Mercantiles” (LCM) in May 2000, we have had a problem: The Federal District Courts were given exclusive jurisdiction to hear all insolvency proceedings in Mexico.

As a result, all insolvency proceedings in our country were heard by judges who were not specialised in the matter, since they were specialists in amparo proceedings and in civil, administrative and labour matters, including criminal matters.

Said courts had never conducted an insolvency trial, they were never prepared for it and for 22 years they have more or less rejected this type of proceeding. Proof of this is that in Mexico, from 2000 to date, less than 1,000 proceedings of this nature have been processed and the proceedings that have been rejected by district judges throughout the Mexican Republic are countless.

As a cultural fact, restructuring and bankruptcy proceedings before the LCM became effective in Mexico were processed in the local courts of each state in Mexico. It was these state courts that were the ones that had the knowledge and experience to carry out the conduct of all “suspensiones de pago” and bankruptcies in Mexico.

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