Mexico's Vitro, one of the world's largest glassmakers, said a U.S. court has extended an order that prevents U.S. creditors who reject its reorganization plan from attempting to seize the company's assets.
The U.S. Court of Appeals for the Fifth Circuit, based in New Orleans, extended a temporary restraining order that had been granted earlier this year by a bankruptcy judge in Dallas, the Mexican company said in a statement Tuesday.
"The TRO prevents the dissident funds that have been attacking Vitro's reorganization plan in the U.S. from seeking to collect on judgments and seize assets belonging to Vitro," the statement said.
Bankruptcy Judge Harlin G. Hale issued the initial temporary restraining order in March pending his ruling on Vitro's reorganization plan, which had been approved by a Mexican court the previous month.
In June, Hale ruled against Vitro's plan to fold its U.S. assets into its bankruptcy proceedings in Mexico, finding it to be contrary to U.S. law.
The judge said that Vitro had improperly extinguished creditors' claims against U.S. subsidiaries that are not in bankruptcy and which had guaranteed the company's debt.
U.S. bondholders argued in the Dallas court that Vitro had used trickery to gain support for its restructuring, saying the company issued debt to its own units to dilute the voting power of outside creditors.
The U.S. Court of Appeals for the Fifth Circuit is currently hearing Vitro's appeal against the bankruptcy judge's decision.
The company said the extension of the temporary restraining order, "which was based, in part, on the merits of Vitro's appeal, will allow Vitro to continue to do business with its customers undisrupted, during the pendency of the appeal or until further order by the court."
The glassmaker's financial woes date back to the onset of the global recession in 2008 and led to the company defaulting on roughly $1.5 billion in debt.
Based in the northern city of Monterrey and founded in 1909, Vitro is Mexico's leading manufacturer of glass for construction and industrial and domestic use.
It has installations and distribution centers in 10 countries of the Americas and Europe and exports its products to 50 nations. EFE