Court appoints Chapter 11 trustee for three Vitro Asset Corp. debtors

By Jim Witters

Wilmington, Del., Jan 22 - Trustees have been approved for three Vitro Asset Corp. entities at the request of an informal group of Vitro noteholders, according to documents filed Jan. 18 and Jan. 22 with the U.S. Bankruptcy Court for the Northern District of Texas.

The U.S. Trustee is responsible for appointing a disinterested person to serve as Chapter 11 trustee for the estates of VVP Auto Glass, Inc., Vitro Chemicals, Fibers & Mining, LLC and Vitro Packaging, LLC.

The noteholders sought trustee oversight because they assert that the companies, "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," according to court documents.

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.

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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