Credito Real’s involuntary Chapter 11 bankruptcy case dismissed

By Sarah Lizee

Olympia, Wash., Aug. 8 – Credito Real, SAB de CV’s involuntary Chapter 11 case, which was petitioned against it by three creditors on June 22, was dismissed Monday by the U.S. Bankruptcy Court for the Southern District of New York at the company’s request.

As previously reported, the petitioners are Institutional Multiple Investment Fund LLC, based in Boston, holding a $1.05 million 8% senior unsecured notes due 2028 claim, Banco Monex, SA, Institucion de Banca Multiple, Monex Grupo Financiero, based in Mexico City, with a $2 million unsecured term loan claim, and Solitaire Fund, based in Vaduz, Liechtenstein, with a $5 million 8% senior unsecured notes due 2028 claim.

The company said in its motion seeking the dismissal that, faced with severe liquidity constraints since the start of the Covid-19 pandemic in early 2020, it has attempted to negotiate a comprehensive restructuring that would allow the company to dispose of certain assets and restructure its short- and medium-term financial liabilities.

After those discussions, which proved unsuccessful, one of the company’s shareholders filed a petition in Mexico on June 20 that started a special expedited commercial proceeding for the dissolution and liquidation of the company. On June 30, a provisional liquidator was appointed.

On July 14, a foreign representative for the company filed a Chapter 15 petition in the U.S. Bankruptcy Court for the District of Delaware seeking recognition of the Mexican liquidation proceeding.

“There is no reason for the involuntary case to exist or to continue,” the company said.

“The court lacks personal jurisdiction over the putative debtor, which is a Mexican company that operates in Mexico with Mexican managers and employees.”

The company also said the New York court is an improper venue, as it isn’t the location of the debtor’s domicile, residence, or principal place of business in the United States.

Credito Real provides consumer financing. It is based in Mexico City. The involuntary Chapter 11 petition was made on under case number 22-10842. The Chapter 15 case number is 22-10630.

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