Restructuring in Emerging Markets: Overcoming Legal and Practical Barriers
Summary by Francisco Javier Garibay Guemez- NextGen Class XV
For much of the modern era, the intellectual center of restructuring law resided in New York and London. That geography, however, is steadily changing. As global capital has flowed into emerging economies( and as higher interest rates, currency volatility, geopolitical realignment, and increasingly sophisticated financing structures have tested the borrowers that capital financed) some of the world’ s most significant restructurings are now unfolding in Mexico City, São Paulo, and Mumbai. Emerging markets are no longer merely importing restructuring concepts developed elsewhere; they are becoming important laboratories for the evolution of international restructuring practice. This panel moderated by
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Andrés Martínez and featuring Pooja Mahajan( India), Dario U. Oscos Coria( Mexico) and Guilherme Vaz Leal da Costa( Brazil) examined how sophisticated international capital interacts with insolvency systems that continue to evolve, using Mexico, Brazil, and India as its principal case studies.
Each jurisdiction has embraced, to varying degrees, the architecture of modern restructuring law. Mexico’ s Ley de Concursos Mercantiles, Brazil’ s corporate reorganization regime— substantially modernized through the 2020 reforms— and India’ s Insolvency and Bankruptcy Code of 2016 all reflect deliberate efforts to incorporate internationally recognized restructuring principles, including court-supervised reorganization, cram-down mechanisms,
rescue financing, and, in the cases of Mexico and Brazil, the adoption of the UNCITRAL Model Law on Cross-Border Insolvency. Yet the defining characteristic of restructuring in emerging markets remains the persistent gap between statutory design and practical implementation. Ambitious legislative frameworks often confront institutional limitations: judicial delays, uneven judicial specialization, underdeveloped rescue-financing markets, valuation uncertainty, volatile macroeconomic conditions, concentrated ownership structures, and the continuing influence of labor, tax authorities, regulators, and political actors.
The comparison is particularly illuminating because each jurisdiction reflects a distinct policy choice regarding the allocation of control during financial distress. Brazil has preserved a debtor-in-possession model while fostering an increasingly sophisticated restructuring culture that embraces mediation and out-ofcourt workouts. India, by contrast, deliberately shifted control to financial creditors, relying on creditor committees and strict statutory timelines to maximize discipline and predictability. Mexico continues to operate through a conciliator-driven judicial process whose protections arise only after a formal declaration of insolvency. Each model has generated its own strengths, limitations, and unintended consequences, offering valuable lessons not only for emerging economies but also for developed jurisdictions grappling with rising costs, procedural complexity, and growing demands on judicial capacity. The panel also explored the increasingly international dimension of emerging-market restructurings. Companies in these jurisdictions
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