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CHAPTER XXInsolvency and Bankruptcy1. IntroductionAntecedents regarding bankruptcy and commercial insolvency in Mexican legislation dateback to the nineteenth century, when the applicable law was part of the civil and commercialcodes. In 1943, a specialized bankruptcy law, entitled the Bankruptcy and Suspensionof Payments Law (Ley de Quiebras y Suspensión de Pagos), was published in theOfficial Federal Gazette. However, this law no longer responded to Mexico’s economicreality, which resulted in the issuance of a new law, the Business Reorganization Law (Leyde Concursos Mercantiles), which took effect as of May 15, 2000.Any legal system that seeks to regulate the insolvencies of commercial enterprises should,as much as possible, aim to protect creditors, borrowers, and the company itself, the latterunderstood as a producer of wealth. That is to say, each one of these elements involves multiplelegal and social interests that merit equal protection and so a system that only protectedcreditors and distained the interests of the borrower, or vice versa, would not be viable.The Business Reorganization Law’s fundamental objective is the protection of the companyas a source of wealth, around which multiple interests revolve, such as: those of theemployees that do not want to lose their source of employment; those of shareholderswho seek to protect their investment; those of financial creditors who seek a return onthe capital they have invested; those of suppliers who seek not only the payment of theircredit, but also to maintain a customer; and those of society in general which does notwant to lose a source of wealth and employment for the community.In these terms, the essence of the reorganization process in regard to company insolvencyshould lie in the effort to reorganize companies through conciliation and settlementbetween the creditors and debtor where possible and, where not, in the liquidation and saleof assets in an organized manner in order to satisfy the creditors’ valid demands for payment.In concrete terms, the Business Reorganization Law seeks to incorporate both elementsas successive stages within the same process. That is to say, first efforts should be321