Mexican steelmaker Altos Hornos de Mexico (AHMSA) received the approval of a US court under the chapter 15 of the US Bankruptcy Code in the US Bankruptcy Court for the District of Delaware.
Judge Kevin Gross approved the company’s request, a move which is expected to protect the company’s creditors in the US.
The judge’s ruling is the first step for the company to have its filing recognized as a “foreign main” proceeding under US bankruptcy law. The “foreign main” is a proceeding pending in a country where the debtor's center of main interests are located.
A media report said the court recognition of the foreign main status would give AHMSA the same automatic protections from creditors for its US assets as in domestic bankruptcy cases, “although final stages of the restructuring would continue to take place in Mexico.”
According to the company’s counsel, AHMSA needed the protection “to eliminate risk associated with creditors’ actions that could potentially affect a recently approved restructuring plan and settlement by a Mexican court.”
“The risk isn’t hypothetical,” Marc Abrams, another counsel for the Mexican steelmaker added.