Vitro in process to recover $1.6 billion; U.S. ruling causes conflict

By Caroline Salls

Pittsburgh, Dec. 17 - Vitro SAB de CV has started the process of recovering damages caused by lawsuits filed by dissident funds to put Vitro and 17 subsidiaries into involuntary bankruptcy in Mexico, which were dismissed on appeal, according to a company news release.

The company said the amount claimed could reach $1.59 billion, which corresponds to 20% of the total amount claimed at the time by the so-called vulture funds from each of the companies in those proceedings.

The funds that are exposed to the damages in question include Moneda, Brookville Horizons Fund, Davidson Kempner Distressed Opportunities Fund and Knighthead Master Fund.

Under its approved restructuring plan, Vitro said new bonds and payments to bondholders who opposed the restructuring were placed in a trust. The company said the trust stipulates that Vitro can collect the amounts these creditors are liable for because of the actions.

According to the release, Vitro has sought information from these funds to determine whether they have agreed to share the costs of actions some funds took on behalf of the whole group.

"If they do have such agreements, we will pursue such recoveries from all relevant parties, including Aurelius and Elliott," Vitro chief restructuring officer Claudio del Valle said in the release.

Restraining order lifted

In addition, Vitro said the Court of Appeals of the United States Fifth Circuit in New Orleans has lifted temporary restraining orders that prevented the collection actions against the company and its subsidiaries by the dissident funds.

As a result, the company said it could be facing a unique situation, since it has two conflicting orders and two markedly different obligations in Mexico and the United States.

Vitro said the debt that could form the basis for the dissident funds' collection actions in the United States has been restructured and replaced with new debt in Mexico.

The company said it is evaluating the financial implications of the situation.

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

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