• June 5 2020

The Council of the Federal Judiciary explains the scope of the General Agreement 8/2020 regarding the granting of injunctive reliefs in bankruptcy proceedings as urgent matters

On April 27, 2020, the Plenary of the Federal Judiciary Council issued the General Agreement 8/2020, in which it specified what should be considered as an "urgent cases", so that the courts on duty could deal with such matters in a timely manner, during the emergency period.

Thus, the Federal Judiciary Council decided to include in this list of "urgent cases" the processing of requests, claims, incidents and new appeals, i.e. not previously filed, for injunctive reliefs in bankruptcy proceedings.

Notwithstanding the provisions of the General Agreement of 8/2020, the District Courts denied the admission of bankruptcy claims in which injunctive reliefs were being requested, arguing that, from the interpretation of such agreement, it was not appreciated that the admission of new bankruptcy proceedings was considered an urgent matter.

Consequently, as a result of such omission and the current economic situation, in which several companies are facing financial problems, as well as failing to meet their payment obligations and even falling into a state of insolvency, The Federal Judiciary Council’s Executive Secretary for the Creation of New Agencies issued circular SECNO/10/2020.

This memorandum states that, section VI of Article 4 of the General Agreement foresees, as urgent matter, the study of new applications or claims for commercial insolvency proceedings in which injunctive reliefs are requested, during the contingency period. In this sense, the memorandum clarifies that, although the Plenary of the Federal Judiciary Council, states that the rest of the actions within the bankruptcy proceedings will remain paralyzed, an exception is made for the Court to study the importance of granting injunctive reliefs, even if such measures are requested in a new claim or application for bankruptcy. Therefore, this clarification reinforces the need to allow the granting of injunctive reliefs within insolvency proceedings, such as the suspension of payment of debts, as this will give a chance to those companies that, due to the contingency, are unable to pay for expenses that prevent them from maintaining their ordinary operations and preserve their liquidity.

Should you have any inquiries, or in order to receive more information about the content of this Alert, please contact:

Fernando Pérez Correa (fernando.perez@solcargo.mx)

Zulima González (zulima.gonzalez@solcargo.mx)

Patricia Cervantes (patricia.cervantes@solcargo.mx)