Federal Finance Agency Appeals Crédito Real’s US Recognition

A federal agency appealed the US recognition of Mexican lender Crédito Real SAB de CV’s bankruptcy proceedings in a move to challenge third-party liability shields in cross-border restructurings.

The US International Development Finance Corp. lodged its challenge Tuesday in the US Bankruptcy Court for the District of Delaware.

Judge Thomas M. Horan overruled the agency’s prior objection and recognized the plan earlier this month under Chapter 15 of the US Bankruptcy Code, which governs foreign restructurings.

Crédito Real’s plan included releases for people who aren’t bankrupt, despite reservations raised by the IDFC and the US Trustee, which serves as the ...