Vitro says U.S. court rejects freezing assets

* Four investment funds say Vitro debt swap unfair* Vitro close bond swap offer on Dec. 7Mexican glass maker Vitro said on Monday a U.

S. court threw out a request by disgruntled bondholders to freeze assets and allow the bankruptcy of its U.S. units.

The request was designed to restrict the units' capacity to make transactions outside the United States or take part in Vitro's Mexican debt restructuring.

The company said in a statement the U.S. court ruled the company's Vitro America division could continue to take on debt via Bank of America.

Monterrey-based Vitro aims to swap $1.216 billion of bonds that expire in 2012, 2013 and 2017 in an offer due to close on Dec. 7. Four investment funds holding about $75 million of Vitro's notes filed the request with a U.S. bankruptcy court in the Northern District of Texas and are part of an ad hoc group of noteholders who say the swap would not give them a fair payment for their debt.

Vitro has accused the funds of "misleading statements" and defends its restructuring plan.

Vitro was once a major glassmaker but is now struggling with high debt and falling sales, and was caught out in late 2008 when the global credit crisis threw Mexico's peso into a free-fall. That led to big losses in currency derivatives that many investors were unaware existed.

The case is In re Vitro America LLC, U.S. Bankruptcy Court, Northern District of Texas, No. 10-47473. Vitro America is represented by Louis Strubeck and William Greendyke of Fulbright & Jaworski in Dallas; Dennis Dunne and Risa Rosenberg of the New York office of Milbank, Tweed, Hadley & McCloy and Andrew Leblanc of the firm's Washington, D.C. office. The noteholders are represented by Jeff Prostok of Forshey & Prostok in Fort Worth, Texas, and Thomas Lauria, J. Christopher Shore, John Cunningham and Richard Kebrdle of White & Case in New York. (Reporting by Gabriela Lopez of Reuters; Additional reporting by Jeff Roberts and Terry Baynes of Reuters Legal)

600450 Vitro says U.S. court rejects freezing assets
Date: 6 December 2010

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