Vitro Asset noteholders group asks court to appoint Chapter 11 trustee

By Caroline Salls

Pittsburgh, Dec. 21 - An informal group of Vitro Asset Corp. noteholders is asking the U.S. Bankruptcy Court for the Northern District of Texas to appoint a Chapter 11 trustee to control the involuntary debtors' estates, according to a Thursday court filing.

"The involuntary debtors in this case, as well as their ultimate parent, Vitro, SAB de CV, have engaged in a pre- and post-petition pattern of diverting assets from their estates in an effort to place them beyond the reach of their creditors and avoid paying their debts, as required under New York law," the motion said.

The noteholders said many of the debtors' "asset-stripping actions" have gone undisclosed until just recently, even when they were required to be disclosed to the courts.

"A trustee is urgently required to protect creditors and pursue the claims and causes of action arising from the inappropriate actions that have brought the involuntary debtors before this court apparently bereft of significant assets other than fraudulent transfer and other causes of action," the noteholders said.

In addition, the noteholder group said a trustee is required to protect creditors because Vitro and its subsidiaries "have shown a propensity to hide critical information, even from their own lawyers."

As previously reported, judge Harlin DeWayne Hale said in a Dec. 4 ruling that 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 Hale's ruling, the transfer and concealment triggered the application of "special circumstances" under section 303(b) of the Bankruptcy code.

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

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