Judge orders relief against Vitro units, reveals concealed information

By Caroline Salls

Pittsburgh, Dec. 4 - A federal court ruled in favor of the Vitro Asset Corp. creditors that filed involuntary Chapter 11 bankruptcy cases against Vitro Asset and several other Vitro SAB de CV subsidiaries, according to a Tuesday filing with the U.S. Bankruptcy Court for the Northern District of Texas.

Earlier this year, the U.S. District Court for the Northern District of Texas vacated a previous bankruptcy court order dismissing the involuntary cases against the Vitro Asset debtors and remanded the issue back to the bankruptcy court.

In Tuesday's ruling, judge Harlin DeWayne Hale said the sole issue in the Vitro Asset debtors' case dismissal request was whether there was a bona fide dispute surrounding the amount of the petitioning creditors' claims.

Hale said New York state court judgments had already answered that question, and that no bona fide disputes existed.

In addition, the judge said the Vitro Asset debtors hid information from several courts regarding the sale of stock of one of the debtors and reincorporation of five of the debtors in the Bahamas.

Hale also said the Vitro debtors completed a substantial transfer of assets to Mexico from the United States that, "despite a total lack of documentary evidence," was eventually said to have been made for tax purposes.

According to Tuesday's ruling, this transfer and concealment triggered the application of "special circumstances" under section 303(b) of the Bankruptcy code.

"Therefore, this court concludes that orders for relief should be entered against the alleged debtors," Hale said in his ruling.

Vitro is a Nuevo Leon, Mexico-based glass manufacturer. Its Chapter 11 case number is 11-32600.

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