An important participant in bankruptcy proceedings is the conciliator, who is appointed once the federal judge declares a merchant bankrupt. The conciliator is appointed by the Commercial Bankruptcy Specialists Institute. Although the administrator is a member of the institute, he or she cannot make this appointment (See The Role of the Administrator in Commercial Bankruptcy).
The conciliator's main functions include the following:
- The conciliator must try to facilitate a restructuring arrangement, an agreement with the bankrupt merchant's creditors or the payment of all debts within the six-month compulsory period. This period may be extended for two additional three-month periods, provided that authorization from two-thirds of the approved creditors is obtained for the first extension, and authorization from 90% of approved creditors is obtained for the second.
- In order to help him to facilitate a restructuring agreement with creditors or the payment of debts, no restrictions are imposed on the conciliator in relation to terms or forgiveness of debt. He or she has only to obtain the consent of 50.1% of the approved creditors before the agreement can be submitted to the judge in charge of the bankruptcy. The new Commercial Bankruptcy Law is flexible enough to allow the conciliator to try to find a solution for the bankrupt merchant's debt and to preserve the ongoing business. The agreement must take account of the merchant's situation with regard to its workers and its tax obligations, where applicable.
- Any claims that are received after the 20-day period following the bankruptcy judgment will be analyzed by the conciliator using the company's accounts. The conciliator will then decide whether to submit them to the judge for consideration.
- The conciliator may manage the merchant's property during the conciliation period if the existing managers are removed, either for failing to cooperate with the conciliator or for acting against the business's best interests.
- The conciliator can request the judge in charge of the bankruptcy to adopt, modify or initiate provisional remedies in order to protect the creditors' estate and rights during the conciliation period.
The conciliator's role ends if no agreement is reached with the creditors and bankruptcy commences. However, he or she may then be appointed as the bankruptcy receiver.
In order to act as conciliator, a person must be registered with the Commercial Bankruptcy Specialists Institute, have passed the relevant examinations and meet the institute's requirements.
For further information on this topic please contact Jaime R Guerra Gonzalez, Alonso Rivera Gaxiola or Alfonso Peniche García at Guerra, Gonzalez y Asociados, SC by telephone (+52 55 5543 9270) or by fax (+52 55 5543 6621 or +52 55 5543 6624) or by email ([email protected]).
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