December 18, 2012 / 4:26 AM / in 6 years

Mexico's Vitro seeks $1.59 bln in damages from hedge funds

MEXICO CITY, Dec 17 (Reuters) - Mexican glassmaker Vitro said on Monday it had begun a legal process to recover up to $1.59 billion in damages from hedge funds who sued the company in Mexico but lost on appeal.

Vitro went through a $3.4 billion bankruptcy reorganization in Mexico, but some creditors strenuously opposed that plan, and they have been fighting in U.S. courts.

Vitro said in a statement that it could collect damages from a trust that has been holding new bonds and payments that correspond to investors who opposed the Mexican restructuring.

“Under the applicable legal framework in (the state of) Nuevo Leon, the amount claimed could reach US$1.59 billion,” the company said in a statement.

Funds exposed to the claims for damages are Moneda, Brookville Horizons Fund, Davidson Kempner Distressed Opportunities Fund and Knighthead Master Fund, Vitro said.

The funds had filed lawsuits to put Vitro and 17 subsidiaries into involuntary bankruptcy in Mexico, but those charges were dismissed on appeal, Vitro said.

The glassmaker said it had asked investors if they had any agreement to share costs of actions certain funds took on behalf of the whole group.

If there were any such agreements, the company would seek damages from Aurelius Capital Management and Elliott International as well, Vitro said.

Aurelius Capital Management and Elliott International hold defaulted notes issued by Vitro subsidiaries and they have led legal proceedings by a group of hedge funds.

Reuters wasn’t immediately able to reach representatives of the hedge funds outside of normal office hours.

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