Diario Oficial
Copyright 1996, Foreign Tax Law, Inc., Ormond Beach, Florida, Telephone (904) 253-5785, Web address: http://www.foreignlaw.com, e-mail: ftlp@foreignlaw.com. Revised for the InterAm Database by the National Law Center for Inter-American Free Trade. Telephone (520) 622-1200. Web address: http://www.natlaw.com. Fax (520) 622-0957.
Compiled February 1998
by Foreign Tax Law, Inc.
PO Box 2189
Ormond Beach, Florida 32175-2189 USA
tel. (904) 253-5785
fax (904) 257-3003
e-mail: ftlp@foreignlaw.com
Website: http://www.foreignlaw.com
DISCLAIMER: Though every effort has been made to present the legal texts and information accurately, due to the nature and scope of the material, we cannot be liable for errors, omissions or other problems in the texts. The material offered herein is not a substitute for competent legal assistance by a licensed attorney of the jurisdiction in question.
LAW OF BANKRUPTCY AND SUSPENSION OF PAYMENTS
Title I. The Concept and Declaration of Bankruptcy
Chapter I. Requirements for the Declaration of Bankruptcy
Chapter II. The Declaration of Bankruptcy
First Section. Initiation of the Declaration
Second Section. Jurisdiction of Bankruptcy
Chapter III. The Judgment Declaring Bankruptcy and its Publication, Opposition and Revocation
Title II. The Organs of Bankruptcy
Chapter I. The Bankruptcy Judge
Chapter II. The Trustee
Chapter III. The Intervenors
Chapter IV. The Creditors' Meetings
Title III. The Effects of the Declaration of Bankruptcy
Chapter I. Effects on the Bankrupt
First Section. Limitations on the Capacity and Exercise of Personal Rights
Second Section. The Penal Responsibility of the Bankrupt
Chapter II. Effects on the Assets of the Bankrupt
Chapter III. Effects Regarding the Judicial Proceeding
Chapter IV. Effects On Pre-existing Legal Relationships
First Section. Obligations in General
Second Section. Individual Liability
Third Section. Pending Bilateral Contracts
Fourth Section. Removal from the Bankruptcy
Chapter V. Effects of the Bankruptcy on the Estate Between the Spouses
Chapter VI. Effects of the Bankruptcy on Actions Taken Prior Thereto
Title IV. The Operations of Bankruptcy
Chapter I. Security and Proof of Assets
First Section. Seizure of the Assets and Papers of the Bankrupt
Second Section. Preparing the Inventory and Balance Sheet
Chapter II. Administration of Bankruptcy
Chapter III. Turning Assets into Cash
Chapter IV. The Distribution of the Assets
First Section. Recognition of the Claims
Second Section. Classification and Priority of Claims
Title V. The Termination of the Bankruptcy and Rehabilitation
Chapter I. The Termination of the Bankruptcy
First Section. Termination through Payment
Second Section. Termination Due To Lack of Assets
Third Section. Conclusion for Failure of Creditors to Attend
Fourth Section. Conclusion by Unanimous Agreement of the Attending Creditors
Fifth Section. Conclusion of Bankruptcy by Agreement
Chapter II. Rehabilitation
Title VI. Prevention of Bankruptcy
Sole Chapter. Suspension of Payments and Preventive Agreement
First Section. Assumptions About Suspension of Payments
Second Section. The Proposal for a Preventive Agreement
Third Section. Judgment of Suspension of Payments
Fourth Section. Recognition of Claims
Fifth Section. Effects of the Declaration of Suspension of Payments
Sixth Section. Organs of the Suspension of Payments
Seventh Section. Admission of the Agreement by the Creditors
Eighth Section. Judicial Approval of the Agreement, Effects, Appeal and Opposition
Title VII. Special Bankruptcies and Suspensions of Payment
Chapter I. Bankruptcies and Suspensions of Payments for Credit Institutions
First Section. Bankruptcy
Second Section. Suspension of Payments
Chapter II. Bankruptcy and Suspension of Payments in Insurance Companies
Chapter III. Bankruptcy and Suspension of Payments of Public Service Enterprises
Chapter IV. The Bankruptcy and Suspension of Payments of Financial Institutions
Title VIII. Recourses and Issues in Bankruptcy and Suspension of Payments Proceedings
Chapter I. Recourses
Chapter II. Issues
General Provisions
Transitory Provisions
Title I. The Concept and Declaration of Bankruptcy
Chapter I. Requirements for the Declaration of Bankruptcy
Article 1.
A merchant who ceases to pay his obligations may be declared to be in a state
of bankruptcy.
Article 2.
It shall be presumed, except upon proof to the contrary, that a merchant ceased
making his payments in the following cases and any others of an analogous nature:
I. General non-compliance with the payment of his current and outstanding obligations;
II. The non-existence or insufficiency of assets upon which to levy execution of a lien due to non-compliance with a debt or upon executing a judgment;
III. The concealment or absence of the merchant without leaving someone at his business who could legally comply with his obligations;
IV. Under the same circumstances as the preceding case, the closing of the offices of his business;
V. An assignment for the benefit of creditors;
VI. Resorting to ruinous, fraudulent or fictitious means to discharge or avoid discharging his obligations;
VII. Petitioning for a declaration of bankruptcy;
VIII. Petitioning for a suspension of payments, which is denied, or, if it is granted, an agreement of creditors is not reached;
IX. The non-compliance with obligations contracted for in an agreement reached for a suspension of payments.
The presumptions alluded to in this article shall be overcome by proof that the merchant can pay his current and outstanding obligations with his available funds.
Article 3.
Within the two-year period following the death or the retirement of a merchant,
he may be declared to be in a state of bankruptcy when there is proof that he
had ceased paying his obligations before his death or retirement, or in the
year following either.
The estate of a merchant may be declared to be in bankruptcy when the business of which the merchant was the owner continues.
Article 4.
The bankruptcy of a partnership also causes the general partners to be considered
bankrupt for all purposes.
The respective liquidations shall be kept separate.
The bankruptcy of one or more partners does not by itself cause the bankruptcy of the partnership.
Mercantile partnerships in liquidation and joint ventures may be declared to be in a state of bankruptcy.
The bankruptcy of a joint venture shall cause the bankruptcy of the general partners and of those against which there is proof that, without any objective reason therefor, they were designated as limited partners. Other than the exceptions expressly indicated by this law, all provisions concerning the bankruptcy of partnerships shall apply to joint ventures.
Chapter II. The Declaration of Bankruptcy
First Section. Initiation of the Declaration
Article 5.
A declaration of bankruptcy may be made by official act in the cases for which
the law so provides, or by written petition by the merchant, by one or more
creditors or by the Public Ministry.
Article 6.
The merchant who intends to declare a state of bankruptcy should present before
the judge having jurisdiction a petition signed by the merchant, by his legal
representative or by his special attorney in fact, in which he states the reasons
for his situation and which is accompanied by:
a) The accounting books he was obligated to keep and those which he voluntarily had adopted;
b) The balance sheet for his business;
c) A list which contains the names and addresses of his creditors and debtors, the nature and amount of his pending debts and obligations, the status of the losses and gains of his business in the last 5 years;
d) A description of the value of all his movable and non-movable property, securities, stocks, merchandise and rights of any other kinds;
e) A complete valuation of his business.
When the number of creditors exceeds one thousand or when it is impossible to determine the number of claims, it shall be sufficient to list, with reference to the final balance sheet of the situation, the approximate number of them, the names and addresses of the known creditors and the total amount of their claims.
Article 7.
If the merchant is a company, the petition should be signed by the persons who
are empowered to sign the firm name; in the cases of companies in liquidation,
by the liquidators, and in those cases of an estate, by the executors.
Article 8.
The petition of a company for a declaration of bankruptcy should be accompanied
by a copy of the articles of incorporation or partnership agreement and by a
copy of its registration in the Public Commercial Register, if they exist.
Article 9.
The creditors and the Public Ministry, when requesting a declaration of bankruptcy,
shall demonstrate that the debtor falls within one of the categories referred
to in the previous chapter.
Article 10.
If, during the course of a trial, the judge becomes aware of a suspension of
payments, he shall proceed to make a declaration of bankruptcy, if he has jurisdiction
to do so, or he shall report it immediately to a judge with such jurisdiction.
If he only has serious and well-founded doubts about the situation of a suspension of payments, he shall notify the creditors and the Public Ministry, so that they can request, in the appropriate case, a declaration of bankruptcy within a period of one month following the notification. In the meantime, the judge shall adopt the measures authorized in the second paragraph of the following article, which shall cease, if in the period of one month the declaration of bankruptcy is not sought.
Article 11.
In all cases, the judge, in order to make the declaration of bankruptcy, shall
give to the debtor and the Public Ministry within 5 days, notice of a hearing
in which evidence shall be brought forth and the corresponding decision shall
be rendered.
General partners shall be notified at the partnership address.
The Judge, under his responsibility, in the meantime shall adopt the necessary provisional measures to protect the interests of the creditors and to appoint the receiver in the terms of Article 28 of this Law.
Article 12.
Neither the debtor nor the creditors who have petitioned for a declaration of
bankruptcy may withdraw their petition, even when all creditors agree.
Second Section. Jurisdiction of Bankruptcy
Article 13.
The following have jurisdiction to hear the bankruptcy of an individual merchant:
the District Judge or the Judge of the Trial Court of the place where the merchant
has his principal place of business, or, if there is none, where he lives.
With regard to companies, jurisdiction shall be proper in the place where the main office is located and if there is none, in the place where it has its principal place of business.
Branches of foreign businesses may be declared bankrupt, without consideration of any jurisdiction which may pertain to foreign judges. This bankruptcy shall affect assets located in the republic and creditors of the operations carried out by the branch.
Article 14.
Except for that set forth in the international conventions and agreements, declarations
of bankruptcy abroad shall not be honored in the republic, except after verification
of the formal requirements of the same and assuring that they have acknowledged
the provisions of this law in the declaration of bankruptcy.
The effects of the declaration of bankruptcy shall be subject to this law.
Chapter III. The Judgment Declaring Bankruptcy
and its Publication, Opposition and Revocation
Article 15.
The judgment in which a declaration of bankruptcy is adjudicated shall contain:
I. The name of the trustee and of the auditor;
II. The order to the bankrupt to present his balance sheet and accounting books within 24 hours, if they were not presented with the petition;
III. The order to secure and give possession to the trustee of all assets and claims, the administration of which the debtor is now deprived due to the judgment, as well as the order to the post office and telegraph to deliver all correspondence of the bankrupt to the trustee;
IV. The prohibition against making payments and delivering assets or goods of any kind to the debtor, under penalty of receiving payment secondary to the other creditors in the case;
V. The notice to creditors to present their claims for review within a period of 45 days, beginning the day after the final publication of the judgment;
VI. The order convening a meeting of creditors to recognize, correct and classify all claims, which shall be done within a period of 45 days, beginning 15 days after the day on which the period set forth in the preceding section ends, at the place and time fixed by the judge, according to the circumstances in the case.
For good cause, the meeting may be held within a maximum period of 90 days;
VII. The order to register the judgment in the Public Register where the registration of the merchant is found, and, in its absence, in the Public Register of the place of residence of the judge having jurisdiction of the case and in the Public Commercial Registers and Public Property Registers in the places where assets or establishments of the debtor are located;
VIII. The order issuing to the trustee, the bankrupt, the intervenors or to any creditor who so requests, certified copies of the judgment;
IX. The date on which the purposes of the bankruptcy take effect.
Upon the declaration of bankruptcy of a partnership, the judgment shall also indicate the names, surnames and addresses of the partners referred to in Article 4.
Along with the date of the judgment, the hour on which it was rendered shall be set forth.
Article 16.
The judgment must be personally announced to the party in bankruptcy, to the
Public Minister, to the National Credit Chamber or Society which could substitute
as receiver, in the terms of Article 28 of this Law, and to the referee. Creditors
with a known address shall be notified in writing, by ordinary post or by means
of a telegram.
The receiver shall publish an abstract of the judgment three consecutive times in the Diario Oficial of the Federation and in a newspaper of wide circulation in the place in which the bankruptcy declaration was made, and if convenient, in the opinion of the judge, in the localities in which important establishments of the enterprise exist.
Creditors shall be considered to have been notified of the bankruptcy when the last publication of those stipulated in this Article has been made.
Article 17.
The official in charge of giving the notices shall insure that the notices,
communications and publications established in the previous article are made
without excuse or delay in the form stipulated.
The same obligation shall rest on the trustee.
Article 18.
Violation of the provisions of the preceding article shall render the liable
official and the receiver officially liable in the terms of Article 56.
The respective decision shall be appealable in the devolutive effect.
After the elapse of 15 days from the declaration of the bankruptcy, if all that Article 16 has ordained has not been fulfilled, the parties, including even the unrecognized creditors, may appear before the court of appeals, which shall dictate and enforce the performance of the omitted measures within a period of 72 hours, and shall make the consignment of the facts to the Public Minister.
Article 19.
Against a judgment which denies the declaration of bankruptcy, exists the recourse
of appeal for all purposes. The appeal shall be brought without suspension of
execution of the judgment being carried out against the person declaring bankruptcy.
Article 20.
Once the evidence has been received, the court of appeals, within 2 days, shall
decide upon the admissibility of the appeal according to that set forth in the
Code of Civil Procedure.
Also applicable shall be that set forth in the Code on damages, and from these codes notice shall be given to the other parties for a period common to them all. The periods for declaring and answering damages shall be 3 days.
In the petitions for damages and the answers, the parties should offer proof, specifying the points on which they should argue, which shall never deviate from the debated issue.
Within the third day the court shall decide on the admission of the proof, opening up an evidentiary period, which shall not exceed 15 days.
From the act of admission until the periods for arguing the evidence have passed, a confession may be made. In case of an implied confession the judge shall examine carefully the presumption which is produced against the documents and records of the proceedings.
Article 21.
Once the damages are answered, if not through the production of evidence, or
once it has been produced, there shall be a period of 3 days for the appellant
to argue, and another 3 days for the other parties to argue. The passage of
these periods shall suffice to place the business on notice that the court is
ready to issue its judgment.
The judgment which confirms or revokes the declaration of bankruptcy shall be issued within the ten-day period following the notice that the court is ready to announce judgment.
Article 22.
The previous provisions shall apply as long as this law, without setting forth
anything to the contrary, allows for the appeal of a judicial decision.
Article 23.
The judgment which denies a declaration of bankruptcy shall be registered in
the Public Registries in which the declaration was registered and shall be communicated,
in order to cancel the registrations, to the commercial and property registers
in which the judgment of the declaration of bankruptcy had been recorded.
The judgment denying the bankruptcy shall be communicated and published just as the declaration of bankruptcy is.
Article 24.
Once the judgment declaring bankruptcy is revoked, all things shall return to
the state in which they were before the declaration was made, having respect,
however, for the administrative acts legally carried out by the organs of bankruptcy
and the rights acquired during the same period by good faith third parties.
Article 25.
If a revocation of the judgment of declaration of bankruptcy is obtained, an
action may be brought against those that petitioned for it or against the judge
who officially declared it for compensation for the damages suffered, if the
former proceeded with malice, known injustice or gross negligence.
Title II. The Organs of Bankruptcy
Chapter I. The Bankruptcy Judge
Article 26.
The following shall be powers of the judge:
I. To authorize the acts of seizure of all assets and books, documents and papers of the bankrupt concerning his business, and to intervene personally in such acts, if he deems it necessary;
II. To examine the aforementioned assets, books, documents and papers of the bankrupt;
III. To order the measures necessary for the security and preservation of the assets of the estate;
IV. To convene the meetings of the creditors prescribed by law and those which he deems necessary and to preside over them;
V. To supervise the procedure and remove the necessary personnel and professionals appointed by the receiver in the interest of the bankruptcy, when it is verified that there is justified cause to do so;
VI. To resolve the claims that are presented against the acts or omissions of the trustee;
VII. To authorize the trustee to:
a) Initiate lawsuits when the latter so requests and intervene in all phases of their activity;
b) Settle or dismiss certain actions and, in general, carry out all acts which exceed those which are purely acts of ordinary preservation and administration of the estate;
VIII. To inspect the activities of the trustee, to assure his compliance with the actions or the performance of useful actions for the estate and to guard the good management and administration of the assets of the same;
IX. To remove the trustee by means of an official decision or upon the petition by an interested party;
X. To examine and verify the claims and to watch over the preparation of the balance sheet to be presented at the creditor's meeting.
XI. In general, all that is necessary for the resolution of the conflicts that are presented, until the extinction of the bankruptcy.
Article 27.
The decisions made by the judge, with the exceptions provided by law, do not
need to be communicated personally to the parties, unless the judge deems it
necessary.
Chapter II. The Trustee
Article 28.
The appointment of the receiver may devolve:
I. Upon the Chamber of Commerce or Industry, to which the party in bankruptcy belongs, except in the case of a State-related entity; and
II. Upon the National Credit Society appointed by the Department of Finance and Public Credit, in any other case; which shall grant the preference provided by Article 447 of this Law, in the case of an insurance enterprise.
The judge, upon receiving the application for declaration of bankruptcy, must announce it to the corresponding Chamber of Commerce or Industry and to the Department of Finance and Public Credit, to make the appointment of the receiver in the judgment that shall be declared, as the case may be.
Article 29.
The Chambers of Commerce and Industry shall discharge the receiverships that
correspond to them, in the terms established in this Law, and in the terms stipulated
for the purpose in the respective statutes that govern them. They may, for the
discharging of the receiverships that correspond to them, appoint one or more
delegates for each case, who shall posses the fullest faculties of representation
and execution within the realm of their powers.
Limitations to the powers of the delegates must be expressly drawn up in the instrument conferring the delegation.
The National Credit Societies shall discharge the receivership in the manner provided for trustees.
Article 30.
The following may not act as delegates or attorneys of the receiver:
I. Relatives within the fourth level of consanguinity or second level of affinity to the bankrupt;
II. Those who are relatives within said levels to the members of the Board of Directors or managers of corporations or limited liability companies in bankruptcy, or to persons authorized to use the firm signature when dealing with partnerships or limited partnerships;
III. Relatives within the levels referred to above of the judge who is presiding over the bankruptcy;
IV. Intimate friends or known enemies, the attorney in fact, the partners or persons who have interests in common with the bankrupt or with the members of the companies mentioned in Section II.
The incompatibility referred to in Section IV shall be liberally interpreted by the judge.
Article 31.
The following may not be included in the lists of trustees:
I. Persons who do not have full exercise of their civil and political rights;
II. Those who, having been declared to be in bankruptcy, were not rehabilitated;
III. Persons who do not have an unimpeachably good reputation.
Article 32.
Whenever it is possible, the choice of a trustee shall fall on an institution
or merchant which resides in the place where jurisdiction over the bankruptcy
lies.
This circumstance shall allow a change, if the judge deems it necessary, in the order of preference established in Article 28.
When the choice of trustee falls on the commercial entities or merchants referred to in Section III of Article 28, preference shall be given to those which are dedicated to the same activities as the bankrupt, or those which are the most similar.
Article 33.
In each trial court there shall be lists of institutions and persons who may
be designated as trustees.
These lists shall be made in the manner and under the conditions listed as follows:
I. The National Banking Commission shall insure that every 2 years a list of the credit institutions which have the necessary attributes to carry out the duties of trustee, along with information about the branches and establishments which they have in the nation, is made, printed and delivered to all trial courts in the nation.
Any exclusions from this list shall be communicated immediately to the corresponding courts;
II. The National Ministry of the Economy shall proceed in the same manner to establish a list of the Chambers of Commerce and Industry;
III. The civil trial judges and district judges shall request, every 2 years, from the Chambers of Commerce and Industry whose addresses are located within their jurisdiction, a list of the mercantile companies and merchants who are their members.
Said Chambers of Commerce and Industry shall be undeniably obligated to supply said lists in the maximum period of 15 days, as well as to communicate twice a year the additions and deletions to such list.
When there are several judges of equal position in the same jurisdictional area, the request shall be made by the least number, who shall be obligated to send copies of the lists obtained to the others.
Article 34.
For the reasons set forth in the judgment of declaration of bankruptcy, judges
may name as trustees institutions or persons who are not included in the above-mentioned
lists.
Interested parties may appeal this decision and the Superior Court shall decide if the reasons indicated by the judge are justified.
Article 35.
For the choice of trustee, the judges shall designate one of the institutions
included in the list of credit institutions.
If none of these accept or are not suitable, he shall designate one of the Chambers of Commerce and Industry on the list.
If none of these is possible, he shall name, according to alphabetical order, one of the commercial companies or individuals in the respective list, taking into account what is set forth in the last paragraph of Article 32.
Article 36.
An individual merchant or company shall not be named for a new trusteeship if
it already has served as trustee, unless none of those who can serve in the
corresponding category accept.
Article 37.
In order to increase the brevity of the procedure for naming the trustee, the
judge can designate separately and simultaneously as the trustee of a bankruptcy
several institutions or persons, indicating to all of them that they are proposed
trustees and the alphabetical order of preference in which their acceptances
shall be considered, according to that set forth in the following articles.
Article 38.
Within the 24 hour period following the communication of his appointment, the
trustee designated shall inform the judge whether he shall accept the duties.
Article 39.
Acceptance is voluntary, but once made it may not be relinquished except by
a declaration of grave supervening reasons, which shall be freely appraised
by the judge.
The only recourse against the decision of the judge is responsibility.
Article 40.
The denial of acceptance of the initial designation obligates the judge to name
a new trustee.
If circumstances justifying the denial are alleged and the designate requests judgment on them, the judge shall consider them and if he does not admit them he can confirm the designate in his duties. All this must be done within 2 days.
Article 41.
If, once the duties of trusteeship are accepted, the appointed trustee fails
to discharge his duties, he shall be responsible for all damages caused by such
failure to the bankruptcy, and he shall incur a fine of 50 to 500 pesos.
Article 42.
Within the 24 hours following the communication of resignation, or of the existence
of a legal reason of incompatibility or incapacity, the judge shall pass judgment
on the alleged reasons and, where appropriate, shall name a new trustee.
Article 43.
The judge shall order that the trustee, within the 15 days following his appointment,
furnish a substantial bond, in the judgment and under the responsibility of
the judge.
Credit institutions shall be regulated in these matters by that set forth in their special laws. The expenses and premiums paid for the creation and maintenance of the bond shall be charged to the estate of the bankruptcy.
Article 44.
The trustee shall be deemed an assistant in the administration of justice.
Article 45.
The trustee may not delegate his duties; but for the purpose of carrying out
the functions corresponding to him in the order for the administration and liquidation
of the bankruptcy, without the consent of the court, he may use agents and representatives,
whose designation the judge may acknowledge. The judge, by official act or upon
the request of the trustee, may order that such agents and representatives carry
out the demands for their compliance with the necessary actions or operations.
Article 46.
The rights and duties necessary for the good preservation and ordinary administration
of the assets of the estate shall belong to the trustee, and among them are
the following:
I. Taking possession of the business and other assets of the bankrupt;
II. Making an inventory of the business and other assets of the bankrupt;
III. Making the balance sheet, if the bankrupt has not presented it, and if he has, correcting it if necessary or looking it over carefully;
IV. Receiving and examining the books, papers and documents of the business and noting in the first pages of each that he has reviewed them;
V. Depositing the cash collected in the enterprise or on the occasion of payments to the party in bankruptcy, except in the cases expressly excluded by the Law.
When the law does not set a period for compliance with the obligations imposed upon the trustee, the judge shall set a period within which they should be carried out.
Any delay in compliance with this, besides obligating the trustee to pay the interest the estate should have received, shall be cause for removal.
VI. Delivering to the judge, before the meeting of creditors referred to in Section VI of Article 15 is held, a detailed report, based upon the memory of the bankrupt if he is present, about the causes of the bankruptcy, particular circumstances about the functioning of the business, the state of the books, the period to which the bankruptcy dates back, personal and family expenses of the bankrupt, as well as other information which he deems relevant;
VII. Establishing a provisional list of privileged creditors, as well as of ordinary creditors who were presented;
VIII. Making the appointments of delegates, agents and personnel, in general, that he has appointed in the interest of the bankruptcy, known to the judge;
IX. Taking care of the accounting of the bankruptcy, with the requirements established in the Commercial Code.
When the Law does not determine a period for the fulfillment of the obligations incumbent upon the receiver, he must execute them with due diligence.
Article 47.
The trustee, if he is an attorney, may be the legal employer in the bankruptcy.
Article 48.
The following also pertain to the trustee:
I. Presenting to the creditor's meeting proposals for agreement, after receiving judicial approval;
II. Exercising and following all the rights and actions which pertain to the debtor, with regard to his assets, and to the group of creditors against the debtor, against third parties and against certain creditors of theirs;
III. Proposing to the judge the continuation of the business of the bankrupt, its sale, or the sale of some of its parts, or of other assets of the bankruptcy, under the circumstances and with the effects which the law determines, as well as all other extraordinary measures advised for the good of the estate of the bankruptcy.
Article 49.
Against any act or omission of the trustee, the bankrupt, the intervenors, any
creditor and the agent of the Public Ministry may make a claim before the judge,
who shall resolve it within 3 days. Against this decision, there is an appeal,
without execution of the decision being suspended.
Article 50.
The trustee, every 3 months, shall deliver accountings of his actions and a
report on the state of the bankruptcy. The report and accounting shall be shown
to the bankrupt and the intervenors for 3 days, and, in a hearing held within
the 3 following days, the judge shall issue a decision, approving or disapproving
the accountings.
Whenever the judge so decides, either by official act or upon the petition of the intervenors, the bankrupt or the trustee, an accounting shall be rendered and a report on the state of the bankruptcy shall be presented within a period of 3 days from the day on which the judge so decided.
The decision made which called for the accountings is appealable without execution thereof being suspended.
The books and documents of the bankrupt shall always remain with the business if it has continued with its activities.
Article 51.
The intervenors have the duty to communicate to the creditors the information
relative to the accountings and state of the bankruptcy, so that they may use
their rights relative to the decisions adopted.
Article 52.
Within the 3 days following the publication of the appointment of the receiver,
the appointment may be challenged by the Public Minister, by the party in bankruptcy,
by the receiver himself, by the institution created with a right to be appointed,
by intervention or by any creditor, even one that is not recognized.
The challenge must be based on the fact that the institution that corresponds, in accordance with Article 28 of this Law, was not appointed.
Article 53.
The trustee shall be removed immediately if he fails to deliver the extraordinary
or trimestrial accounting, or to guarantee his conduct according to the terms
of the law.
He shall be removed on the request of a party, after a trial, for improperly carrying out his duties or for doing one of the improper actions referred to in this law.
In these same circumstances, the judge may remove him by official act.
Article 54.
The opposition to the appointment of the trustee made by the bankrupt or by
the creditors shall not suspend the continuation of the bankruptcy, nor shall
it impede the trustee in the exercise of his functions.
The judge may, nevertheless, order the contrary, taking into account that set forth in Section III of Article 26.
Article 55.
The trustee who ceases to carry out his duties shall not be free from responsibilities,
nor shall he have the right to receive his fees until a substitute has taken
possession and, upon receiving and reviewing his report, the judge so decides.
Article 56.
The receiver shall be liable to the estate and to the party in bankruptcy, for
the management of his delegates, agents and of the personnel, in general, that
he has appointed in the interest of the bankruptcy, in respect to the losses
and damages that he might cause in the performance of his duties, for non-performance
of his obligations or for negligence due to not proceeding as a conscientious
business person would proceed in his own business.
Article 57.
The trustee shall receive as his sole fees:
I. 8% of the amount of the sales made for the good preservation and ordinary administration of the assets of the bankruptcy;
II. When the sales are made to liquidate the assets of the estate:
a) 8% of the product of the sale of the same, if this does not exceed 25,000 pesos;
b) 4% of the excess up to 200,000 pesos;
c) 2% of any excess amount;
III. When the business continues with its activities until the liquidation of its existing activities, the fees shall accrue according to the scale of the previous clause with an increase of 2%;
IV. If the enterprise continues temporarily and then proceeds to liquidation in the aforementioned ways, that set forth in the previous clauses shall be taken into account;
V. If the business is sold as a whole, the percentage shall be the same as that established in Section II on the amount of the same, increased by 2%;
VI. If the bankruptcy concludes by agreement, the rules set forth in the previous sections shall apply; but if the assets return to the administration of the bankrupt, they shall be considered sold only for purposes of this article.
Chapter III. The Intervenors
Article 58.
In order to represent the interests of the creditors in the vigilance of the
actions of the trustee and of the administration of the bankruptcy, one, three
or five intervenors shall be appointed, in the judgment of the judge, according
to the amount and importance of the bankruptcy, who shall form the intervention
in the same.
The necessary substitutes may also be named.
Article 59.
The judge, in the judgment which declares the bankruptcy, shall provisionally
name the intervenors until, in the creditors' meeting, the final appointments
are made.
Only in cases where the judge does not know who the creditors of the bankrupt are may he designate as intervenors persons who do not fulfill the above-mentioned condition.
In this case, they shall proceed to the immediate substitution of the provisional intervenor or intervenors who are not creditors as soon as they have the necessary information.
Article 60.
The appointment of intervenors shall be made by the meeting of the creditors
in nominal voting.
If it is necessary to elect three intervenors, two shall be elected by the votes which represent the majority of claims present. The third intervenor shall be named by the creditors present who do not form the majority.
The same shall be done if there are to be five intervenors, but then the minority shall name two of them.
For these purposes, each creditor present shall be able to vote only for two or three intervenors, according to whether three or five intervenors are to be named.
In the same meeting in which the intervenors are designated and in the same manner in which that is done, substitutes may be named.
Article 61.
Either by official act or upon the request of any creditor or provisional intervenor,
the judge may convene a meeting of the creditors for the purpose of naming the
permanent intervenors.
Article 62.
The intervenors shall perform their duty during the entire time of the bankruptcy,
but may be removed by the judge for a justified cause. They shall be liable
to the party in bankruptcy and to the estate for losses and damages that they
cause in the performance of their duties, and especially for non-fulfillment
of the assignments stipulated in Article 67 of this Law.
The meeting of creditors may remove all or some of the intervenors, as long as they designate substitutes, if there are none already.
The removal of the intervenors designated by the minority, if it is not consented to by two-thirds of the minority, signifies the removal of all intervenors.
In order for the creditors' meeting to validly agree on the removal, it is necessary that the majority of the creditors representing the majority of the debt attend the meeting.
Article 63.
The judge shall notify their designation to the creditors elected as intervenors,
who were not present at the meeting in which they were named, through personal
notification and shall call a meeting of all of them which shall be held within
6 days from the date on which they were notified, in order to advise them of
the necessary measures to be taken in order to function as intervenors and to
duly carry out the tasks with which they are confronted.
Article 64.
All agreements of the intervenors shall be made by an absolute majority of the
votes of all the intervenors.
Article 65.
The creditors designated as intervenors and their substitutes shall accept or
reject their duties within 72 hours of their notification of being named as
intervenors.
Acceptance of the duties of intervenor is voluntary, but once accepted, it may not be abandoned, except for grave cause, in the discretion of the judge, who shall pass judgment on the reasons immediately and from which judgment there shall be no other recourse than responsibility.
Article 66.
If there are no substitutes, vacancies in the intervenors' positions shall be
covered by the creditors designated by the judge within 24 working hours following
the opening of a vacancy, unless the creditors use their rights according to
Article 60.
Article 67.
The intervenors have all measures available to them which are relevant in the
interest of the bankruptcy and of the rights of the creditors, among which are
the following:
I. Appealing the decisions of the judge and opposing those of the trustee which they consider prejudicial to the interests of the creditors or the rights granted to them by law;
II. Filing liability suits against the receiver and against the judge;
III. Requesting the judge to order the appearance before them of the bankrupt or the trustee so that they can inform them about the activities of the bankruptcy. The judge shall do whatever is necessary to comply with their request, except for just cause, of which he shall inform them;
IV. Designating one or more intervenors to attend all activities of the administration of the bankruptcy or of the liquidation of those which are specifically set out;
V. Informing the judge of all acts of extraordinary administration which he should authorize, and of all other acts of administration which they deem necessary or which the judge or trustee request;
VI. Requesting the judge to convene an extraordinary meeting of the creditors;
VII. Informing, every 2 months, in writing, the other creditors of the progress and state of the bankruptcy, and when appropriate, of the decisions of the trustee or judge which may affect their collective or individual interests;
VIII. Performing other duties which the law expressly designates to them or which it gives, in general, to the creditors.
Article 68.
The intervenors shall designate one of their members to meet with the judge
or trustee and who shall represent them in civil proceedings.
Article 69.
The intervenors, in order to accurately comply with their duties, shall have,
together and individually, the most ample freedom to examine the books, correspondence
and other papers of the bankruptcy.
Article 70.
The intervenors shall have the right to a fee, which shall be set by the judge,
and which shall not be given to them until the conclusion of the bankruptcy.
The decision of the judge shall be appealable.
Article 71.
The intervenors shall be responsible to the creditors under the same terms as
those set for the responsibility of the trustee to the estate.
Article 72.
If the intervenors group cannot be set up even provisionally, because there
is an insufficient number of creditors, because they will not accept the duties
designated to them, because of their residence outside the jurisdiction of the
bankruptcy or because of other similar reasons, the judge shall issue a decision
expressing the reasons which prevent the existence or functioning of the intervenors.
If at any later time it becomes possible to designate intervenors or the continuation of their functions, the judge shall do so by official act or at the request of any creditor, the trustee or the bankrupt.
Chapter IV. The Creditors' Meetings
Article 73.
A meeting of the creditors shall be held ordinarily in the cases provided for
by the law and in the special cases which are necessary.
Article 74.
The meeting of creditors shall be convened by the judge. The meeting shall be
reported, by personal notification, to the intervenors, the bankrupt and the
trustee.
The other creditors shall have legal notification through the publication of the meeting according to this law.
Article 75.
Any resolution which deals with matters not included in the agenda shall be
null, unless all those who should have been notified are present and agree.
Article 76.
Notices of meeting of creditors shall be published in the same manner as that
established for the judgment of the declaration of bankruptcy.
Article 77.
The creditors shall attend the meeting themselves or by proxy, which may be
done by a document which is not a public document or by a telegram sent to the
judge, not subject to ratification.
In the latter case, the manager of the issuing office shall certify the identity of the person who made the representation. The proxy shall be stamped before the judge in the hearings.
The bankrupt may also be represented by proxy, unless the judge has ordered his personal appearance.
Those who represent several creditors shall have as many votes and as much voting power as the people they represent would have had if they had attended the meeting.
The judge shall provide all necessary elements for the proper functioning and order of the meetings of creditors.
Article 78.
The meeting shall be convened no matter how many creditors attend or how many
claims are represented.
Article 79.
Each creditor shall have a vote, and, except in cases where the law requires
special majorities or majorities of capital, the meeting may adopt agreements
by a simple majority of the creditors present.
Upon voting, each creditor shall record the amount which, for these purposes, has been recognized for him.
The assignees of divided claims shall only have between them the vote which corresponds to the assignor, unless they prove with authentic documents that the assignment and division were done before the date to which the declaration of bankruptcy is retroactive.
Article 80.
Creditors whose demands for recognition of their claims have been declared admissible
by the trustee and the intervenors may attend the meetings of creditors.
In the case of discrepancy, the judge must resolve it and shall show the claim that is recognized to the creditor for his participation in the meetings.
The judge may proceed in the same manner when he deems it necessary without considering the reports of the trustee and intervenors.
Article 81.
If, on the day established for the meeting, all items on the agenda cannot be
handled, the meeting shall be continued on the following working day.
The judge, before ending the session, shall indicate the hour on which the meeting shall be continued.
Article 82.
The judge, as chairman of the meeting, shall provide for the drawing up of the
minutes of the meetings which shall be signed by the secretary, the trustee
and the intervenors.
Title III. The Effects of the Declaration of
Bankruptcy
Chapter I. Effects on the Bankrupt
First Section. Limitations on the Capacity and Exercise of Personal Rights
Article 83.
By the judgment declaring the bankruptcy, the bankrupt is deprived of the right
to the administration and disposition of his assets and those assets he acquires,
until the bankruptcy is finalized.
Article 84.
Although the judgement declaring bankruptcy does not limit the civil rights
of the bankrupt, except in the cases established by law, the bankrupt cannot
carry out any activities which require full possession of such rights.
Article 85.
The judge shall have the judgment declaring bankruptcy communicated to the post
office, telegraph and other analogous offices. By virtue of this notification,
the directors of those offices shall assure that the correspondence and communications
directed to the bankrupt are delivered to the trustee.
The trustee shall open such, in the presence of the bankrupt or his agent, if he attends, returning to him immediately all such correspondence and communications which have no relation to the interests of the bankruptcy.
Article 86.
The revelation of the data thus acquired shall cause liability of the receiver,
in the terms of Article 56, which shall be processed as an incident, without
prejudice to the penal sanctions that shall proceed.
Article 87.
The judgment declaring bankruptcy produces all the civil and penal effects of
bail for the bankrupt, who cannot leave the place of the bankruptcy without
the judge authorizing it and without leaving an agent sufficiently empowered
to represent him.
The judge shall have to consult with the intervenors in the case where he is considering granting permission to the bankrupt to leave the jurisdiction.
Whenever it is required by the judge, the bankrupt shall appear before him, the trustee, the intervenors or the creditors' meeting, except where, due to a legitimate conflict, the judge authorizes him to appear through an agent or attorney in fact.
Article 88.
The general partners shall be subject to the requirements established by this
law for a bankrupt.
Article 89.
In bankruptcies of corporations, these shall be represented by those set forth
in their bylaws and, if they are not, by their administrators, managers or liquidators,
who shall be subject to all obligations imposed by this law on a bankrupt.
In the absence of the above, the corporation shall be represented by an agent of the Public Ministry.
Article 90.
In the case where the merchant dies after the declaration of bankruptcy or when
his estate has declared bankruptcy, the executors and the heirs shall have,
in the course and proceedings of the bankruptcy, the obligations which correspond
to the bankrupt, with the exception of when they are bonded.
Second Section. The Penal Responsibility of the
Bankrupt
Article 91.
For legal purposes, there are three classes of bankruptcy:
1. Accidental bankruptcies;
2. Culpable bankruptcies;
3. Fraudulent bankruptcies.
Article 92.
An accidental bankruptcy is understood to be where a merchant suffers misfortune,
arising accidentally in the regular and prudent activities of the good administration
of his business, which reduces the capital of the business to the extreme of
having to cease making its payments.
Article 93.
A culpable bankruptcy shall be considered to be where a merchant, by actions
contrary to the requirements for good administration of his business, has caused,
augmented or worsened the state of cessation of payments, such as:
I. Where domestic and personal expenses have been excessive and disproportionate to the economic possibilities of the business;
II. Where there are disproportionate sums lost due to gambling, bets and similar operations in stock or other exchanges;
III. Where there are losses as a result of purchases, sales or other operations to delay the bankruptcy;
IV. Where, within the period to which the bankruptcy is retroactive, there were sales with losses, for less than the market price, of items bought on credit and on which money was still owed;
V. Where the expenses of the business are much greater than the accounts receivable, according to its capital, its activity and other analogous circumstances.
Article 94.
A culpable bankruptcy shall also be considered to be, except in cases where
they allege and prove their innocence, where a merchant:
I. Has not maintained his accounting records for his business according to the requirements of the code, or if he has, there has been an error which has caused damages to a third party;
II. Does not file his declaration of bankruptcy in the 3 days following that established as the day of cessation of payments;
III. Fails to present the documents required by this law in the manner, circumstances and periods set forth.
Article 95.
Those declared to be in bankruptcy who are determined to be culpable shall be
punished by 1 to 4 years in prison.
Article 96.
A fraudulent bankruptcy shall be considered to be where a merchant:
I. Absconds with all or part of the assets, or fraudulently commits, before the declaration but after the date to which the bankruptcy is retroactive, acts or operations which increase his liabilities or decrease his assets;
II. Does not keep accounting books, or alters, falsifies or destroys them in order to make it impossible to comprehend the true situation of the business;
III. Favors, after the date to which the bankruptcy is retroactive, one creditor by making payments or granting him guarantees or preferences to which he had no right.
Article 97.
The bankruptcy of brokers shall be deemed fraudulent when it is proven that
they committed some act or operation different from those of their profession
for their own account, either in their own name or that of another, even when
the reason for the bankruptcy is not a result of these actions.
If the bankruptcy comes about due to the broker's having made a guarantee of the operations in which he was involved, fraudulent bankruptcy is presumed, except on proof to the contrary.
Article 98.
The bankruptcy of a merchant whose real situation cannot be understood from
his books, shall be presumed fraudulent, except on proof to the contrary.
Article 99.
Merchants declared to be in fraudulent bankruptcy shall be punished by 5 to
10 years in prison and a fine, which may be as high as 10% of the liabilities.
The amount of these fines shall be paid from the assets which remain after paying creditors or from those which the bankrupt has or acquires after the conclusion of the bankruptcy.
Article 100.
An agreement reached in a suspension of payments or a bankruptcy shall not prevent
the corresponding penalties from being applied according to the judgment issued
in the penal proceeding which would have followed.
But, if the judgment declared the bankruptcy culpable, execution shall be suspended against the debtor who entered the agreement, unless he is later judicially declared to be in noncompliance with his agreement.
Article 101.
When the bankruptcy of a corporation is classified as culpable, the responsibility
shall fall on the directors, administrators or liquidators of the same who are
responsible for the acts which so classify the bankruptcy.
Article 102.
Guardians who perform the business for minors or incompetents, in the cases
set forth in civil legislation, or the agents who substitute for them in the
case of their incapacity or incompatibility in the performance of the business,
shall be subject to the rules set forth in the preceding articles for culpable
or fraudulent bankruptcies.
Article 103.
Those who aid or cooperate in any way, by previous or later agreement, or who
directly cause someone to commit the crimes typified in this section, shall
be punished by the penalties set forth in Articles 95 and 99 hereinabove.
Article 104.
Persons included in the cases set forth in the previous article, without removing
the penalties which correspond to them, shall also be condemned:
I. To losing any right which they may have to the estate of the bankruptcy;
II. To returning to the estate the assets, rights or actions, the loss of which was determined to be their responsibility, along with interest and damages.
Article 105.
The spouse, consanguine ascendants or relatives of the bankrupt, who, without
his consent have removed or hidden assets belonging to the bankruptcy, shall
not be deemed to be accomplices to the fraudulent bankruptcy, but shall be considered
guilty of robbery.
Article 106.
Merchants and others acknowledged to be guilty of either culpable or fraudulent
bankruptcy may also be condemned:
I. To not doing business during the time of the principal punishment;
II. To not performing any duties of administration or representation of any kind for mercantile companies during the same time.
Article 107.
Anyone who directly or through another person, applies for the recognition of
a false credit in a bankruptcy or suspension of payments, shall commit a crime
comparable to that which is referred to in Item X of Article 387 of the Penal
Code.
Article 108.
Receivers in bankruptcy shall be subject to the rules contained in Title XI
of the Penal Code.
Article 109.
The preceding provisions are applicable to receivers in suspensions of payments,
and to the persons to which Article 29 of this Law refers.
Article 110.
The creditor who agrees, with the bankrupt or another, for his own interests,
to benefits in exchange for voting in a certain way in any creditors' meeting,
shall be punished by imprisonment from 3 months to 3 years and by a fine of
500 to 5,000 pesos and by the loss of his claim for the benefit of the estate.
The same penalties of prison and fine shall be imposed on the bankrupt or the person who represented him.
Article 111.
Action shall not be taken against the crimes defined in this section without
the competent judge having declared the bankruptcy or suspension of payments.
Article 112.
A culpable or fraudulent bankruptcy shall be pursued upon the accusation of
the Public Ministry.
Article 113.
The classification of the bankruptcy shall be made in the corresponding criminal
trial, for which the judge who makes the declaration of bankruptcy shall notify
such declaration to the Federal Public Ministry.
Article 114.
In cases of culpable or fraudulent bankruptcy, the responsible party may be
detained, but the civil judge may require the presence of the bankrupt before
him or before the organs of the bankruptcy, whenever he deems it necessary.
Chapter II. Effects on the Assets of the Bankrupt
Article 115.
The bankrupt shall maintain the disposition and administration of the following
assets:
I. Rights which are strictly personal, such as those related to his civil or political status, although they indirectly have an effect on the estate;
II. Assets which legally constitute the estate of the family;
III. The rights to assets of another which are not transferable by their nature or for whose transfer the consent of the owner is necessary;
IV. Earnings the bankrupt obtains after the declaration of bankruptcy through personal activities;
The judge may limit the exclusion, taking into account the necessities of the bankrupt and his family;
V. Food assistance, within the limits set by the judge, in accord with that indicated in the previous clause.
VI. Those which are legally not attachable, with the exceptions required by the universal character of the proceedings of bankruptcy and with the limitations deemed necessary by the judge.
Article 116.
All acts of control or administration done by the bankrupt regarding assets
included within the estate from the moment in which the judgment declaring bankruptcy
is issued are void as against creditors.
The declaration of nullity shall not proceed when the estate gains from the prices obtained by the bankrupt.
Article 117.
The judge, after seeing the report of the trustee and of the intervenors, shall
decide on the extension, duration and quantity of the food assistance for the
bankrupt and his family. This decision may be appealed by any interested party.
Article 118.
The date to which the effects of the bankruptcy should be retroactive, set out
in the judgment, may be modified by official act, according to the circumstances
of the records in the case and the considerations of justice resulting from
those records, or on the petition of the trustee, the intervenors or any creditor,
whenever, respectively, the judgment is issued or the demands are made before
the day set forth for the recognition of claims.
Article 119.
The same notice given about the judgment of the declaration shall be given about
those which modify the date of retroactivity.
Article 120.
The provisional decisions of the judge regarding the date of retroactivity shall
not be appealable.
Article 121.
Within the 12 days following the recognition of claims, the judge shall permanently
fix the date of retroactivity.
Chapter III. Effects Regarding the Judicial Proceeding
Article 122.
The actions taken and suits pursued by the bankrupt and those taken and pursued
against him, which have anything to do with the estate, shall be continued by
the trustee or with him, with the intervention of the bankrupt, in the cases
in which the law or the judge so disposes.
Article 123.
All suits exclusively dealing with goods or rights whose administration and
disposition are maintained by the bankrupt are excepted from the above.
Article 124.
The bankrupt may also intervene in other suits, if they affect goods or rights
included in the previous article.
Article 125.
The bankrupt may intervene in all cases as a third party assisting the bankruptcy.
Article 126.
All pending suits against the bankrupt shall be tried jointly with the bankruptcy
proceedings, except the following and without interference with that set forth
in Article 122 and the powers given to the trustee to sell all assets:
I. Those in which the judgment has already been declared in the trial court;
II. Those dealing with secured claims or collateral.
Article 127.
In both cases, when there is a writ of execution, they will be joined with the
bankruptcy for purposes of classification and payment.
Chapter IV. Effects On Pre-existing Legal Relationships
First Section. Obligations in General
Article 128.
From the moment of the declaration of bankruptcy:
I. For purposes of the bankruptcy all current obligations of the bankrupt shall mature.
If payment of debts which do not draw interest is made before the time set, a discount shall be made for interest at the legal rate for the time remaining from the moment of payment to that on which the claim should have matured;
II. The debts of the bankrupt shall cease accruing interest against the estate.
Secured claims are excepted up to the amount of the respective guarantee;
III. The claims of bondholders of corporations shall be calculated by the value of the issuance, with a deduction made for any amount paid as redemption or refund;
IV. The debts of the bankrupt may not be legally offset, even by an agreement of the parties. The following are excepted:
a) The debts of the estate which are related to the claims of the bankrupt. The offset shall not proceed when the claim against the estate or against the bankrupt was acquired by assignment, gift or other analogous way, after the date on which the effects of the bankruptcy arose;
b) The debts produced by a contract which is a current account;
c) Special partners, stockholders of corporations and partners in joint ventures which at the same time are creditors of the bankruptcy, of the corporation or of the joint venture, do not form part of the liabilities of the estate, except for the resulting difference owed to them after considering the amounts they were required to contribute as partners or stockholders.
V. Claims which are suspended shall be demandable against the bankruptcy.
The amounts which should be received from these claims shall be deposited in the credit institution designated by the judge, until, once the condition has passed, they are paid to the creditors.
If, before the condition has been met, the bankruptcy is concluded, the amounts should be paid to the debtor, if a full payment is made, or they shall be distributed among the other creditors.
Article 129.
Claims subject to defeasance are considered unconditional.
Article 130.
The creditor of a life annuity shall have the right to be given a life annuity
in an insurance company which is equal or proportional, according to the reduction
suffered in capital which was necessary at the moment of the declaration of
bankruptcy to make the dividend.
Article 131.
The guarantor of the bankrupt may not be obligated to make any payment until
the obligation matures under the conditions agreed on and he shall preserve
all the rights against the bankruptcy that civil legislation grants to him.
Article 132.
In order to exercise the rights corresponding to obligations of the bankrupt
which are not pecuniary or which have an undetermined or uncertain value, it
is necessary to value them in terms of money.
Article 133.
The amount of the claims for periodic loans or continuous loans shall be determined
through the amount of the established payments, and to each one of those payments
that so set forth, discounts for early payments shall apply.
Article 134.
If the special partners, the stockholders or the limited partners have not delivered
at the time of the declaration of bankruptcy the total amounts that they were
obligated to contribute to the company, the trustee shall have the right to
demand the installment payments which are necessary within the respective limit
of responsibility.
Second Section. Individual Liability
Article 135.
If several or some of the debtors of an obligation owed jointly are declared
in bankruptcy, the creditor has the right to receive from each estate the amount
which corresponds to his claim until the debt is paid in full.
If the total amount of the payments received by the creditor from several debtors who are liable jointly for the debt exceeds the amount of the claim, the difference shall be returned to each estate in proportion to the amount which had been paid. If the bankrupt parties made guarantees to pay in a certain order, the amount in excess shall be paid to the last of the guarantors and the others who had overpaid, successively, before him, until the total is repaid.
Article 136.
The bankruptcy or bankruptcies of individual debtors who are jointly liable
to a common creditor have the right to require from the others the payment of
their corresponding portion of the debt.
Article 137.
Partial payment of an obligation before a declaration of bankruptcy limits the
amount of the claim against the estate.
The debtor who paid may register in the bankruptcy of his co-debtor the amount of the payment made, but the portion that corresponds to him shall be delivered to the creditor, if he requests it, if the whole payment had not been made, up to the amount necessary to pay it.
Article 138.
The amount which corresponds in the bankruptcy to a co-debtor or guarantor of
the bankrupt shall remain a credit in favor of the creditor until the acceptance
of his claim if said amount was secured by assets of the bankrupt in guarantee
of such claim.
Third Section. Pending Bilateral Contracts
Article 139.
Bilateral contracts which are pending execution either totally or partially
may be carried out by the trustee, upon authorization of the judge and a hearing
with the intervenors.
Anyone having contracted with the bankrupt may demand that the trustee declare whether he is going to affirm or rescind the contract even before the terms of the contract require compliance.
The contracting party not in bankruptcy may delay execution of the contract until the trustee complies or guarantees compliance with the contract.
Article 140.
If the business of the bankrupt is continued, all contracts related thereto
must be complied with.
Article 141.
Contracts of deposit, to open credit, commissions, and the like are rescinded
by the bankruptcy of one of the parties, unless the trustee, upon authorization
by the judge and a hearing with the intervenors, assumes the obligation, in
agreement with the other contracting party.
That set forth in the Commercial Code regarding powers conferred to agents is not hereby disturbed.
Article 142.
A declaration of bankruptcy suspends the activities of the active accounts,
which shall be liquidated in order to exact or cover their balance in the manner
and way which so corresponds.
Article 143.
The bankruptcy shall not affect contracts made regarding assets or affecting
those whose administration and disposition is maintained by the bankrupt, and,
in general, contracts which are strictly personal and do not affect the assets
of the estate.
Article 144.
If the bankrupt had purchased personal or real property from a party who had
not yet delivered it, the seller cannot be required to deliver it unless the
price therefor is paid or guaranteed to be paid to the satisfaction of the seller.
If the delivery had been made only due to a promise of sale, the seller may recover the item, as well as when the contract of sale was not written as a public document, when this is a legal requirement.
Article 145.
If the seller of real property declares bankruptcy, the buyer has the right
to demand the delivery thereof, after paying the price therefor, if the sale
was perfected.
Article 146.
The seller of personal property, which has not been paid for and which is en
route for delivery to the buyer in his storehouse or in the place agreed upon,
may, if the buyer declares bankruptcy:
I. Change the payment according to legally allowed terms;
II. Detain the goods, although he does not have the necessary documents to change the payment. The opposition to delivery shall be substantiated in a hearing between the seller, buyer and the trustee.
Article 147.
If, according to that set forth in this law, they decide to perform the contract,
and the price has been set to be paid in installments, the seller may require
a deposit.
The trustee may pay the price all at one time, obtaining a discount for immediate payment, expressed or implied in the contract, and lacking that, according to the market. Lacking both, the discount may be that set forth for early payment.
Article 148.
When sales involve deliveries and some deliveries have already been made without
being paid for, the trustee shall be obligated to pay for them, which shall
be a requirement in order for the compliance set forth in Articles 147 and 162.
Article 149.
In spite of the bankruptcy of the seller of personal property, the buyer may
demand compliance with the contract if the property had been specified before
the declaration of bankruptcy.
Article 150.
In contracts for borrowing securities, the bankruptcy of the party borrowing
the securities authorizes the trustee, at the maturity of the contract, to deliver
the securities and demand the price. If this is not done, the party lending
the securities may register in the estate the amount of the securities prior
to the payment of the price agreed upon.
If the bankrupt is the party lending the securities, the trustee could pay the price and receive the securities. If that is not done, the party borrowing the securities could deliver the securities and register in the bankruptcy the price which corresponds.
Article 151.
The trustee shall comply with contracts for futures which mature after the declaration
of bankruptcy, through the recognition of or demand for the claim which results
according to the terms of the same.
The difference shall be liquidated according to the value of the things or securities on the day of the agreed maturation.
Article 152.
The bankruptcy of a partner of a general partnership, of a limited liability
company or of a limited partnership or joint stock company, gives the right
to the trustee to request his contribution and the corresponding profits therefrom,
according to the last balance sheet of the entity, or to continue with the entity,
if the judge so authorizes, after a hearing with the intervenors, as long as
the other partners or shareholders do not prefer to exercise the right of partial
dissolution of the entity, unless the partnership agreement or incorporation
papers provide for a different solution.
Article 153.
The bankruptcy of the lessor does not rescind the lease, except upon agreement
to the contrary, for real property.
The bankruptcy of the lessee authorizes the trustee to rescind the contract, after paying a fair indemnification in the appropriate case, which shall be set by the judge if the parties cannot reach an agreement therefor, after a hearing with the trustee, the intervenors and the lessor.
Article 154.
Contracts for the rendition of services and for labor, of a strictly personal
type, which are to the benefit of the bankrupt or which he is charged with performing,
are not rescinded.
Those that are necessary for the continuation of the business or for the administration or liquidation of the bankruptcy may be continued by the trustee.
Article 155.
A contract for work at a fixed price shall be rescinded by the bankruptcy of
one of the parties, unless the trustee, with the consent of the other contracting
party and after judicial authorization, agrees to comply with the contract.
Article 156.
The bankruptcy of the insured does not rescind the insurance contract if the
object insured is real property, but if it is personal property, the insurer
may rescind it.
If the trustee of the bankruptcy does not notify the insurer of the declaration of bankruptcy within 30 days thereafter, the insurance contract shall be rescinded from that date.
In life insurance or mixed insurance, the trustee of the bankruptcy of the insured may give up the insurance policy or obtain a reduction in the amount of insurance in proportion to the premiums already paid according to the calculations considered by the insurer in making the contract and taking into account the risks incurred by the insurer. At the same time, they can make any other arrangement which would be of economic benefit to the estate.
That set forth in the last paragraph is applicable to contracts for investments.
Article 157.
The bankruptcy of the insurance company rescinds the insurance contract, if
in the maximum time of one month from the declaration, the trustee, with the
authorization of the judge and after a hearing with the intervenors, does not
insure the insured risks with another company or does not guarantee that the
business will continue functioning.
Fourth Section. Removal from the Bankruptcy
Article 158.
Goods, securities or any kinds of assets which are part of the estate of the
bankrupt and which are identifiable, whose ownership was not transferred to
the bankrupt by a definite and irrevocable legal title, may be removed by their
legal owners, by the exercise of the corresponding action before the judge of
the bankruptcy.
If there is no opposition to the request for removal, the judge may grant, with no further proceedings, the removal requested. If there is opposition, the dispute shall be resolved through trial proceedings.
The decisions issued by the judge, whether or not through litigation, shall be appealable, without execution of the decisions being suspended, by any interested party.
The trustee shall exercise the rights and shall comply with the obligations which the bankrupt has over these assets.
Article 159.
As a result, assets which are found in the following situations or others of
an analogous nature, may be removed from the estate:
I. Those which may be claimed according to law;
II. Real property sold to the bankrupt but not paid for by him, when the sale was not duly registered;
III. Personal property bought for cash if the bankrupt has not paid the total price at the time of the declaration of bankruptcy;
IV. Real or personal property purchased on credit if they had agreed upon rescission based on non-compliance and if there is documentation of that in the corresponding public registers;
V. Securities issued or endorsed to the bankrupt as payment for sales made for the account of another, as long as there is proof that the obligations arise from them and the item is not recorded as a current account between the bankrupt and his constituent;
VI. Assets which the bankrupt should return because they are under his control for one of the following reasons:
a) Deposit, administration, lease, rental, usufruct, trust or consignment based upon appraisal contracts, if in this case the bankruptcy was declared before the manifestation by the buyer that he is going to take back these items, or if the period set forth for doing so has not passed;
b) Commission for purchase, sale, transfer, delivery or collection;
c) That transferred out of the current account for delivery to a determined person for the account of the constituent, or to satisfy obligations which had to be complied with in the residence of the bankrupt.
When the claim resulting from the remittance was made upon payment by a letter of exchange, the legitimate owner of said letter may obtain removal of the same;
d) Security based upon a public document, on the warranty of a broker, in payments by general stores for deposit or in favor of a credit institution.
The trustee, upon previous judicial authorization and a hearing with the intervenors, may avoid the removal by satisfying completely the claim to which the goods were attached.
If the estate does not make use of this right, the creditor who is secured, once the removal is obtained, should sell the security in the maximum period of one month according to the legal procedure established.
The amount of the sale shall be credited to the account of the secured creditor, who shall deliver to the estate any amount which exceeds his claim and any expenses related to the sale.
If, on the contrary, there is still an amount remaining against the bankrupt, the secured creditor shall in the classification for said amount assume the place that corresponds to him as a general creditor;
e) The amounts that were owed to the bankrupt for sales made for the account of another. The party requesting removal may also obtain the grant of the corresponding right of claim;
VII. Secured assets in the bankruptcy which belong to a third party or to which these third parties have the right of preference over the estate.
Article 160.
Relative to the existence or identity of assets whose removal is requested,
the following legal principals shall be taken into account:
I. According to that set forth in Article 158, the previous actions of removal only proceed, in general, when the assets are part of the estate at the time of the declaration of bankruptcy;
II. Nevertheless, if the assets are destroyed after the declaration, and the bankrupt had secured them, the party requesting removal shall have the right to obtain from the estate payment of indemnification that he would have received or the transfer of the rights to the same;
III. If the assets were sold before the bankruptcy, there can be no removal of the price received for them; but if such sale had not become effective, the party requesting removal may obtain a transfer of the rights of the bankruptcy against the third party purchaser, and such party requesting removal shall deliver to the estate the difference; if more, between that which he collected and the amount of the claim.
The exercise of this right excludes the possibility of taking action against the estate;
IV. Assets that have been transferred, received in payment or exchanged for any legal title, and which are equivalent to those that were removable also shall be excluded.
V. Proof of identity may be made even when the assets have been taken from their packaging or unpacked or partially sold;
VI. Whenever removable assets have been given as security to third parties in good faith, the secured creditor may oppose the delivery as long as he is not paid the amount he is owed, the interest agreed upon and his legitimate expenses.
Article 161.
The removal of assets as referred to in this section is subordinate to compliance,
on the part of the party requesting removal, with the obligations that he had,
based upon such assets, to the bankrupt or to the estate.
In cases of removal on the part of the seller who had received part of the price, the removal is conditioned upon the prior return of the part of the price already paid. The return of the price shall be proportional to its total amount, with relation to the amount or number of assets identified in the estate.
The seller and other parties requesting removal have the prior obligation to return to the estate all that they have been paid or owe for fiscal duties, transportation, commission, insurance and other expenses of preservation of assets.
Article 162.
When the trustee, according to that set forth in this law, decides on the execution
of the pending contracts, he may avoid removal of the assets, or, in the appropriate
case, he may require their delivery to the estate, by paying the price to the
seller.
Chapter V. Effects of the Bankruptcy on the Estate
Between the Spouses
Article 163.
Against the estate, the assets that the other spouse acquired during the marriage,
in the 5 years prior to the date to which the effects of the bankruptcy are
retroactive, are presumed to belong to the bankrupt spouse.
In order to gain possession of these assets, without interfering with the proper precautionary measures, the trustee shall request a hearing in which, in order to obtain a favorable judicial decision, it shall suffice that he prove the existence of the matrimony during said time and the acquisition of the assets during the same period.
The spouse may oppose it, proving in said hearing, or in that proceeding set forth in Section IV of the Fourth Chapter, that said assets had been acquired with funds that may not be included in the estate of the bankruptcy because they are the sole property of the spouse, or that they belonged to the spouse before the marriage.
Article 164.
If the spouse had against the other spouse who filed bankruptcy claims for onerous
contracts or for payment of debts of the bankrupt, except on proof to the contrary,
according to that set forth in the last paragraph of the previous article and
in Articles 174 and 176 of the Civil Code of the Federal District, it shall
be presumed that the claims have been made and that the debts were paid with
assets of the bankrupt, for which the other spouse shall not have a claim against
the estate.
Article 165.
All assets belonging to the marriage shall be included in the estate of the
bankruptcy of the bankrupt spouse.
If the other spouse requests the termination of the marital relationship, according to civil law, he may claim the assets and rights which correspond to him.
Article 166.
With the exceptions set forth in this chapter, the bankruptcy of a spouse does
not affect the assets of the other nor the salaries, wages, fees and earnings
that the other obtained for personal services, employment or the exercise of
his or her profession, business or industry.
If some of said assets or their equivalent are included within the estate of the bankruptcy of the other spouse, the owner may claim them in an unconditional manner in the way set forth in the previous fourth section.
Article 167.
If the matrimonial property only consists of products of the assets, these shall
be included in that set forth in the previous article.
Chapter VI. Effects of the Bankruptcy on Actions
Taken Prior Thereto
Article 168.
All actions taken by the bankrupt before the declaration of bankruptcy or from
the date to which the bankruptcy is retroactive, which knowingly defraud creditors,
shall be null as against the estate, if the third party who participated in
the act knew of the fraud.
This last requirement shall not be necessary in the case of gifts.
Article 169.
The following are presumed to have been carried out as a fraud to the creditors,
unless proof is admitted to the contrary, and shall be null as against the estate:
1. Actions and transfers which are free, which occur after the date to which the bankruptcy is retroactive and those in which, not being free, the consideration received by the bankrupt is of a value clearly inferior to that given by the bankrupt;
2. The payment of debts and obligations not yet matured to or by the bankrupt, with money, securities or any other means, after the indicated date.
When the estate can take advantage of payments made to the debtor, they will not be null.
If third parties return to the estate what they received from the bankrupt, they may request recognition of their claim when appropriate;
3. The discount of any items by the bankrupt, after said moment, shall be considered as a premature payment.
Article 170.
When, after the date to which the bankruptcy is retroactive, the following are
done, they shall be considered as done to the fraud of creditors and shall be
null against the estate, except when the interested party proves good faith:
1. Payment of matured debts, made in a way different from that which corresponds to the debt, given the nature of the obligation;
2. The establishment of rights to goods or assets of the bankrupt, in guaranty of debts incurred prior to the date of retroactivity, for which debts there was no original agreed guarantee, or for the loan of money, goods or merchandise, before or after the indicated date, whose delivery was not specified to be made at the time of making the obligation before a notary public or witnesses who intervened therein.
Article 171.
The registration of a security interest made before the date of the declaration
of bankruptcy shall be valid.
Article 172.
Payments, actions and transfers made for purchases after the date of retroactivity
shall be presumed to be in fraud of creditors if the trustee or any interested
party proves that the third party knew the situation of the bankrupt.
Article 173.
Whenever it is decided to return to the estate any object or amount, it shall
be understood, although not expressed, that any corresponding items produced
therefrom or interest produced thereby during the period in which it was enjoyed,
except in cases of good faith, shall also be returned.
Article 174.
If the assets, the subject of these actions, have left the ownership of the
person who obtained them to be acquired by a good faith third party, indemnification
by the first purchaser may be demanded for the damages caused, except on proof
of his good faith.
The same responsibility falls on the person who, in order to avoid the effects of the revocation, destroyed or hid the assets referred to herein.
Title IV. The Operations of Bankruptcy
Chapter I. Security and Proof of Assets
First Section. Seizure of the Assets and Papers of the Bankrupt
Article 175.
Based upon the judgment declaring bankruptcy and according to that set forth
before, the seizure of the assets, documents and papers of the bankrupt shall
be proceeded with according to the following rules:
I. Seizure shall be done by the judge or appropriate secretary, who shall set forth in the proceedings the reason for carrying out these activities, for which purpose non-working days are available too;
II. Stores, deposits of merchandise and assets and other pertinent locations of the business of the bankrupt shall be closed and the doors and windows locked;
III. The seizure of assets not belonging to the business shall be carried out in the same manner and the judge shall be able to adopt the necessary security measures required by the nature and situation of the assets seized.
The judge shall also secure all assets subject to seizure by personal actions; he shall order the bailees of them to deliver them to the trustee and order the people who know what is in the depository to communicate with the trustee; and he shall make the necessary annotations in the Public Registry;
IV. In the same manner, the offices or studies of the bankrupt shall be seized and the number, kinds and state of the books of the business which are found shall be written down at a hearing and in each one, after the last entry, a note about the pages in the book shall be written, which shall be signed by an official who handles seizures. If the books do not have the formalities prescribed by the Code of Commerce, that shall be stamped on all pages.
The property shall be duly cared for as well as the documents and papers;
V. During the action of seizing the indicated places, an inventory shall be made of all money, bills of exchange and other securities which are found and the necessary measures for their security shall be taken;
VI. The judge or the secretary, where appropriate during the proceedings, shall indicate the course of events to be followed if there are items of personal property which were not found in the places searched and by their nature or due to convenience they would not be kept there.
Article 176.
When the bankruptcy is of one of the entities indicated in Article 4, the seizure
of assets and papers shall extend to the partners who are general partners.
Article 177.
Upon giving notice of the judgment of bankruptcy, notice shall also be given
of the prohibition against paying or delivering assets to the bankrupt, indicating
that if it is not done through the trustee there is a penalty of double payment
in case of disobedience.
Article 178.
At the same time, all people who possess assets or effects of the bankrupt shall
be prevented from acknowledging these through promissory notes, which shall
be delivered to the judge, under the corresponding penalties.
Article 179.
The previous provisions have special application to commercial and banking entities
which have assets of the bankrupt, whatever may be their motive.
Article 180.
The proceedings for seizure shall be initiated immediately upon the issuance
of the judgment of declaration of bankruptcy, for which the judge should take
all necessary measures for the circumstances and issue all resolutions necessary
for the immediate seizure of the books, papers and assets of the bankrupt, and
for compliance with that set forth in the previous articles, considering for
these purposes as working days, all the days and hours necessary.
Article 181.
In the proceedings for seizure, the trustee, the representative of the intervenors
if said representative has already accepted and affirmed his duties, and the
bankrupt or his agent, may attend.
Article 182.
Bills of exchange and other securities which are to mature immediately or which
require, in an immediate manner, a payment to be made for the preservation or
exercise of rights, shall be reported and delivered to the trustee for the purpose
of the necessary proceedings. The bankrupt shall transmit as soon as possible
all documents found in this case.
Article 183.
If there are assets which are not found in the jurisdiction over which the judge
presides, letters requisitorial shall be sent by the most rapid means possible
to obtain compliance with the orders, without interfering with the ordinary
way in which normal documents of the proceedings are sent.
If the holders of these assets are persons of known solvency and responsibility, according to their reputation, a depository shall be established with them, foregoing the expenses of transfer until the trustee can resolve the situation.
Article 184.
The examination of the books, documents and papers of the bankrupt shall be
done by those who have the right to do so, in the location in which they are
found; but the judge, at the request of the trustee, may authorize their removal
from the same.
Article 185.
The following objects shall not be stamped nor kept in the manner indicated
in Article 175:
1. Those exempt from seizure;
2. Things which require immediate sale;
3. Bills and other securities which mature immediately or whose immediate payment is necessary;
4. Cash, which shall be turned over to the trustee for deposit; if the trustee has not taken possession, the judge or secretary handling the proceedings shall deposit it;
5. Those which, according to the judge, are necessary, if continuation of the business is agreed upon, for the normal development thereof.
A memorandum shall be written about all these items and they shall be included in the inventory when it is made, according to the second section of this title.
Article 186.
Minutes of the proceedings for seizure shall be drawn up, and signed by the
judge or secretary presiding over them and the trustee, the intervenors and
the bankrupt or his attorney, if they attended.
Second Section. Preparing the Inventory and Balance
Sheet
Article 187.
The trustee should initiate the inventory of the assets seized, at the latest
within the 3 days following the taking of possession.
He shall request previous authorization from the judge, who shall grant it in proceedings, to lift the seals. If, during the seizure, judicial depositories were designated for the administration or sale of certain assets due to the trustee's not having taken possession of his duties, the trustee, at the beginning of the inventory, shall request the judge to deliver these assets or what was obtained from them to him.
Article 188.
If, at the time of initiating the seizure, the trustee foresees the possibility
of writing the inventory in one day, the stamping of the assets shall be omitted.
Article 189.
The bankrupt or his attorney, the intervenors and any other creditor who so
requests, may attend the preparation of the inventory, of which they shall have
been notified previously.
Article 190.
In the case of the bankruptcy of a deceased merchant, as well as in the case
of the bankruptcy of the estate of a decedent, if the declaration coincides
with the formation of the inventory, the trustee may continue its formation
from that moment.
If the inventory is already done, the judge, after a hearing with the trustee, shall decide if it shall be adopted, revised or if a new one should be made. The decision of the judge shall be appealable without execution being suspended.
Article 191.
The inventory shall be made by reporting and describing all personal and real
property and all kinds of securities. An attempt shall be made to separate in
the report the assets and effects which are necessary for the business from
the rest of them.
If the bankrupt presented the report referred to in Article 6 of this law, the trustee shall make a careful comparison of his inventory and the report of the bankrupt and shall inform the judge of his findings.
Article 192.
It should not take more than 10 days to prepare the inventory.
If the trustee believes it is impossible to do so within said time period, he should explain the reasons to the judge and request an extension, which may not be longer, in any case, than another 20 days.
The negligence of the receiver in fulfilling
this obligation is a ground for liability in t