vitro complaint

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SUPREME COURT OF THE STATE OF NE\I/ YORK COUNTY OF NEW YORK VITRO S.A.B. DE C.V.. Plaintiff, - against - AURELIUS CAPITAL MANAGEMENT, L.P., ACP MASTER, LTD., AURELIUS CAPITAL MASTER, LTD., AURELIUS CONVERGENCE MASTER, LTD., BROOKVILLE HOzuZONS FUND, L.P., DAVIDSON KEMPNER CAPITAL MANAGEMENT, L.L.C., DAVIDSON KEMPNER DISTRESSED OPPORTUNITIES FUND, L.P., ELLIOTT MANAGEMENT CORPORATION, ELLIOTT INTERNATIONAL, L.P., THE LIVERPOOL LIMITED PARTNERSHIP, KNIGHTHEAD CAPITAL MANAGEMENT, L.L.C, KNIGHTHEAD MASTER FLIND, L,P ., LORD ABBETT BOND-DEBENTURE FUND, INC., LORD ABBETT & CO. L.L.C., MONEDA ASSET MANAGEMENT SA, MONEDA INTERNATIONAL, INC., MONEDA LATIN AMERICAN CORPORATE DEBT, MONEDA, SOCIEDAD ANÓNNT¿A, ADMINISTRADORA DE FONDOS DE INVERSION, COMO ADMINISTRADORA DEL FONDO DE INVERSIÓN MONEDA DEUDA LATINOAMERICANA. Defendants. To the above named Defendant(s): Aurelius Capital Management, L.P. ACP Master, Ltd. Aurelius Capital Master, Ltd. Aurelius Convergence Master, Ltd. Brookville Horizons Fund. L.P. 1499969v1/012335 Index No. SUMMONS FILED: NEW YORK COUNTY CLERK 04/14/2011 INDEX NO. 650997/2011 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/14/2011

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Page 1: Vitro Complaint

SUPREME COURT OF THE STATE OF NE\I/ YORKCOUNTY OF NEW YORK

VITRO S.A.B. DE C.V..

Plaintiff,- against -

AURELIUS CAPITAL MANAGEMENT, L.P., ACPMASTER, LTD., AURELIUS CAPITAL MASTER,LTD., AURELIUS CONVERGENCE MASTER,LTD., BROOKVILLE HOzuZONS FUND, L.P.,DAVIDSON KEMPNER CAPITALMANAGEMENT, L.L.C., DAVIDSON KEMPNERDISTRESSED OPPORTUNITIES FUND, L.P.,ELLIOTT MANAGEMENT CORPORATION,ELLIOTT INTERNATIONAL, L.P., THELIVERPOOL LIMITED PARTNERSHIP,KNIGHTHEAD CAPITAL MANAGEMENT,L.L.C, KNIGHTHEAD MASTER FLIND, L,P .,

LORD ABBETT BOND-DEBENTURE FUND,INC., LORD ABBETT & CO. L.L.C., MONEDAASSET MANAGEMENT SA, MONEDAINTERNATIONAL, INC., MONEDA LATINAMERICAN CORPORATE DEBT, MONEDA,SOCIEDAD ANÓNNT¿A, ADMINISTRADORA DEFONDOS DE INVERSION, COMOADMINISTRADORA DEL FONDO DEINVERSIÓN MONEDA DEUDALATINOAMERICANA.

Defendants.

To the above named Defendant(s):

Aurelius Capital Management, L.P.

ACP Master, Ltd.

Aurelius Capital Master, Ltd.

Aurelius Convergence Master, Ltd.

Brookville Horizons Fund. L.P.

1499969v1/012335

Index No.

SUMMONS

FILED: NEW YORK COUNTY CLERK 04/14/2011 INDEX NO. 650997/2011

NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/14/2011

Page 2: Vitro Complaint

Davidson Kempner Capital Management, L.L.C.

Davidson Kempner Distressed Opportunities Fund, L.P.

Elliott Management Corporation

Elliott International, L.P.

The Liverpool Limited Partnership

Knighthead Capital Management, L.L.C.

Knighthead Master Fund, L.P.

Lord Abbett Bond-Debenture Fund, Inc.

Lord Abbett & Co. L.L.C.

Moneda Asset Management SA

Moneda International, Inc.

Moneda Latin American Corporate Debt

Moneda Sociedad Anónima, Administradora de Fondos de Inversión, como

Administradora del Fondo de Inversión Moneda Deuda Latinoamericana

You are hereby summoned to answer the complaint in this action and to serve a copy ofyonr answer, or, if ihe complaint is not served with this slrnmons, to serve a notice ofâpp"**"., on the Plaintiffls ãfto*"yr, Susman Godfrey L.L.P., within twenty (20) days after

tñe service of this suÍrmons, exclusive of the day of service (or within thirty (30) days after the

service is complete if this srrrnmons is not personally delivered to you within the State of New

YorÐ. In case of your failure to appear or answer, judgment will be taken against you by default

for the relief demanded in the complaint.

The basis of venue in New York County is CPLR $$ 501 and 503.

1499969v1/012335

Page 3: Vitro Complaint

Dated: April l4,20llNew York, New York

Defendant Addresses:

Aurelius Capital Management, L.P.535 Madison Avenue22nd FloorNew York, NY 10022

ACP Master, Ltd.535 Madison Avenue22nd FloorNew York. NY 10022

Aurelius Capital Master, Ltd.535 Madison Avenue22ndFloorNew York, NY 10022

Aurelius Convergence Master, Ltd'535 Madison Avenue22nd FloorNew York, NY 10022

Brookville Horizons Fund, L.P.Two GreenwichPlazaGreenwich, CT 06830

@*pRobert Rivera, Jr.

Susman Godfrey, LLP560 Lexington Ave., 15th FloorNew York, NY 10022(2t2) 336-833srrivera@SusmanGodfrey. com

Attorneys þr Plaíntiff

1499969v11012335

Page 4: Vitro Complaint

Davidson Kempner Capital Management, L.L.C.65 East 55th Street19th FloorNew York, NY 10022

Davidson Kempner Distressed Opportunities Fund, L.P.885 Third AvenueSuite 3300New York, NY 10022

Elliott Management CorporationPaul Singer712 sthAvenue36th FloorNew York, NY 10019

Elliott International, L.P.712Fifth Avenue35th FloorNew York, NY 10019

The Liverpool Limited Partnership712Fifth Avenue35th FloorNew York, NY 10019

Knighthead Capital Management, L.L.C.623 FifthAvenue29th FloorNew York, NY 10017

Knighthead Master Fund, L.P.Knighthead GP, L.L.C.623 FifthAvenue29th FloorNew York, NY 10022

Lord Abbett Bond-Debenture Fund, Inc.63 V/all StreetNew York, NY 10005

Lord Abbett & Co. L.L.C.90 Hudson Street1lth FloorJersey City, NJ 07302

1499969v1/012335

Page 5: Vitro Complaint

Moneda Asset Management SA444 Madison Avenue8th FloorNew York, NY 10022

Moneda International, Inc.444Madison Avenue8th FloorNew York, NY 10022

Moneda Latin American Corporate Debt444Madison Avenue8th FloorNew York, NY 10022

Moneda Sociedad Anónima, Administradora de Fondos de Inversión, como

Administradora del Fondo de Inversión Moneda Deuda Latinoamericana

444Madison Avenue8th FloorNew York. NY 10022

1499969v11012335

Page 6: Vitro Complaint

SUPREME COURT OF THE STATE OF NEV/ YORKCOI.]NTY OF NEW YORK

VITRO S.A.B. DE C.V..

Plaintiff,- against -

AURELIUS CAPITAL MANAGEMENT, L.P., ACPMASTER, LTD., AURELIUS CAPITAL MASTER,LTD., AURELIUS CONVERGENCE MASTER,LTD., BROOKVILLE HORIZONS FUND, L.P.,

DAVIDSON KEMPNER CAPITALMANAGEMENT, L.L.C., DAVIDSON KEMPNERDISTRESSED OPPORTUNITIES FUND, L.P.,

ELLIOTT MANAGEMENT CORPORATION,ELLIOTT INTERNATIONAL, L.P., THELIVERPOOL LIMITED PARTNERSHIP,KNIGHTHEAD CAPITAL MANAGEMENT,L.L.C., KNIGHTHEAD MASTER FUND, L.P.,

LORD ABBETT BOND-DEBENTURE FUND,INC., LORD ABBETT & CO. L,L.C, MONEDAASSET MANAGEMENT SA, MONEDAINTERNATIONAL, INC., MONEDA LATINAMERICAN CORPORATE DEBT, MONEDA,SOCIEDAD ANÓNIMA ADMINISTRADORA DEFONDOS DE INVERSION, COMOADMINISTRADORA DEL FONDO DEINVERSIÓN MONEDA DEUDALATINOAMEzuCANA,

Defendants.

1525174v11012335

Index No.

COMPLAINT

Page 7: Vitro Complaint

Plaintiff Vitro S.A.B. de C.V. ('oVitro" or "Plaintiff'), by its attorneys Susman Godfrey

L.L.P., complains against the above-listed defendants, each of which holds certain unsecured

senior notes issued by Vitro (collectively "Defendants" or "Defendant Bondholders"), and

alleges as follows:

Nature of the Action

1. Defendants are the epitome of Walt Street's bond vultures. The defendants, many

of them technically offshore entities based in tax havens, buy distressed company debt for

pennies on the dollar and then use whatever means necessary to extract unjustified financial

concessions from the distressed companies. In this case, they have crossed the line, engaging in

tortious, illegal, and otherwise wrongful acts which have caused Vitro - the distressed company

at issue - substantial harm. Defendants' actions threaten the very existence of this l0l-year-old

company that directly employs more than 17,000 people through its wholly owned subsidiaries,

and indirectly employs more than 100,000.

2. Vitro is a publicly traded international glass manufacturer and distributor based in

Mexico. It has been negotiating with its creditors, including Defendants, for more than two years

to design a prepackaged bankruptcy restructuring plan for the benefit of its many stakeholders, to

allow Vitro to emerge as an ongoing and thriving enterprise, and to save thousands ofjobs.

3. Based on Defendants' promises to engage in good faith negotiations, Vitro

entered into confidentiality agreements with the Defendants, through their representatives and

counsel, and disclosed to them sensitive, non-public information. See, e.g., Exhibit A, Exhibit B,

and Exhibit C ("Confidentiality Agreements"). Defendants promised to use this information

solely for the purpose of evaluating a potential restructuring plan and agreed to not use or

disclose it to anyone, except under the strictly limited conditions contained in the confidentiality

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Page 8: Vitro Complaint

agreements. Based on Defendants' representations that they would negotiate in good faith, and

at Defendants' insistence, Vitro also paid more than $4 million to Defendants' own consultants

and lawyers to help Defendants conduct due diligence and evaluate Vitro's potential

restructuring plans.

4. After two years of negotiations, Vitro and the majority of its creditors agreed to a

restructuring package that will benefit the company's creditors and allow Vitro to emerge from

bankruptcy as an ongoing and profitable enterprise. Vitro has submitted this restructuring plan

to a Mexican court for approval pursuant to Mexico's Business Reorganization Act (the

" Concur s o Mer c antil" proceedings).

5. Instead of negotiating in good faith and supporting the plan, Defendant

Bondholders demanded unreasonable concessions from Vitro and sought to obtain unfair

advantages over other creditors. When Vitro refused, Defendants resorted to unlawful tactics to

extract the unfair concessions they sought. They breached their confidentiality agreements with

Vitro, using and disclosing Vitro's sensitive and non-public information in an effort to disrupt

Vitro's business and to destroy the restructuring plan. Defendants also made false and

disparaging statements about Vitro, and thereby interfered with Vitro's relationships with other

creditors, not to mention the customers and suppliers on which Vitro's future depends.

Additionally, and based on an initial statistical analysis, it appears that Defendants may also have

used Vitro's non-public information to illegally trade in Vitro's securities and/ot may have

disclosed that information to others who traded in Vitro's securities. Defendants' destructive

game of chicken-like tactics have become clear: either Vitro gives in to their unreasonable

demands or they will continue to use improper means to kill Vitro's consensual restructuring

plan and, potentially, destroy Vitro.

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Page 9: Vitro Complaint

6. Vitro brings this action to recover the damages caused by Defendants' wrongful

conduct and to enjoin Defendants from continuing to use and disclose Vitro's confidential

information in violation of the parties' confidentiality agreements.

Parties

7. Plaintiff Vitro S.A.B. de C.V. is a publicly traded corporation organized under the

laws of the United States of Mexico ("Mexico"). Its principal place of business is located in

Monterrey, Nuevo Leon, Mexico.

8. Aurelius Capital Management, L.P. ("Aurelius Capital Management") is a

Delaware company with its principal place of business at 53 Forest Avenue, Suite 202, Old

Greenwich, CT 06870, and may be served at its registered New York business address at 535

Madison Avenue, 22nd Floor, New York, NY 10022'

9. ACP Master, Ltd. ("ACP") is a Cayman Islands exempt company which may be

served at its United States business address at 535 Madison Avenue, 22ndFloor, New York, NY

10022.It has a foreign registered address at DMS Corporate Services LTD, P.O. Box 1344, dms

House,20 Genesis Close, Cayman Islands.

10. Aurelius Capital Master, Ltd. ("ACM") is a Cayman Islands exempt company

which may be served at its United States business address at 535 Madison Avenue, 22nd Floor,

New York, NY 10022. It has a foreign registered address at GlobeOp Financial Services

(Cayman) Limited, P.O. Box 1020I, Suite 3205, 2nd Floor, 45 Market Street, Gardenia Court,

Camana Bay, Grand Cayman KYl-9003.

11. Aurelius Convergence Master, Ltd. ("Aurelius Convergence") is a Cayman

Islands limited partnership which may be served at its United States business address at 535

Madison Avenue, 22nd Floor, New York, NY 10022. It has a foreign registered address at

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Page 10: Vitro Complaint

GlobeOp Financial Services (Cayman) Limited, P.O. Box 1020I, Suite 3205, 2nd Floor, 45

Market Street, Gardenia Court, Camana Bay, Grand Cayman KYl-9003.

12. Aurelius Capital Management, ACP, ACM and Aurelius Convergence will

collectively be referred to as "Aurelius or "the Aurelius Defendants."

13. Brookville Horizons Fund, L.P. ("Brookville") is a Cayman Islands limited

partnership which may be served at its principal place of business at Two Greenwich Plaza,

Greenwich, CT 06830.

14. Davidson Kempner Capital Management, L.L.C. is a New York limited liability

company which may be served at its principal place of business at 65 East 55th Street, 19th

Floor, New York, NY 10022.

15. Davidson Kempner Distressed Opportunities Fund, L.P. is a Delaware limited

partnership with its principal place of business at DK Group L.L.C., 65 East 55th Street, New

York, NY 10022, which may be served at its registered New York address at 885 Third Avenue,

Suite 3300, New York, NY 10022.

16. Davidson Kempner Capital Management, L.L.C. and Davidson Kempner

Distressed Opportunities Fund, L.P. will be collectively referred to as "Davidson Kempner."

L7. Elliott Management Corporation is a Delaware corporation which may be served

at its principal place of business at7l2 Fifth Avenue, 36th Floor, New York, NY 10019.

18. Elliott International, L.P. is a Cayman Islands limited partnership which may be

served at its United States business address at 712 Fifth Avenue, 35th Floor, New York, NY

10019. It has a foreign registered address at clo Maples & Calder, P.O. Box 309, Ugland House,

South Church St., Georgetown, E9 00000.

lg. The Liverpool Limited Partnership is a Bermuda limited partnership which may

be served at its United States business address at7t2 Fifth Avenue, 35th Floor, New York, NY

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Page 11: Vitro Complaint

10019. It has a foreign registered address at Canon's Court, 22 Yictot'ra St., Hamilton HM12,

Bermuda.

20. Elliott Management Corporation, Elliott International, L.P. and The Liverpool

Limited Partnership will be collectively referred to as o'Elliott."

2I. Knighthead Capital Management, L.L.C. ("Knighthead Capital") is a Delaware

limited liabitity company which may be served at its principal place of business at 623 Fifth

Avenue,2gth Floor, New York, NY 10017.

ZZ. Knighthead Master Fund, L.P. ("Knighthead Master") is a Cayman Islands

limited partnership which may be served at its United States business address at Knighthead GP,

L.L.C.,623 FifthAvenue, 29th Floor, New York, NY 10022. It has a foreign a registered address

atclo Ogier Fiduciary Services Ltd., 89 Nexus Way, CamanaBay, Grand Cayman KYl-9007.

23. Lord Abbett Bond-Debenture Fund, Inc. is a Maryland corporation with its

principal place of business at 90 Hudson Street, Jersey City, NJ 07302, and may be served at its

registered New York service address at 63 Wall St., New York, NY 10005.

24. Lord Abbett & Co. L.L.C. is a New Jersey limited liability company which may

be served at its principal place of business at 90 Hudson Street, l lth Floor, Jersey City' NJ

07302.

25. Lord Abbett Bond-Debenture Fund, Inc. and Lord Abbett & Co. L.L.C. will be

collectively referred to as o'Lord Abbett."

26. Moneda Asset Management SA ("Moneda Asset Management") is a Chilean

corporation which may be served at its principal place of business at 444 Madison Avenue, 8th

Floor, New York, NY 10022.

27. Moneda International, Inc. ("Moneda Intemational") is a British Virgin Islands

corporation which may be served at its United States business address at 444 Madison Avenue,

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Page 12: Vitro Complaint

8th Floor, New York, NY 10022. It has a foreign registered address at clo Citco B.V.I. Limited,

Flemming House, P.O. Box 662,RoadTown, Tortola, Virgin Islands, British.

28. Moneda Latin American Corporate Debt ("Moneda Latin American") is a

Cayman Islands corporation which may be served at its United States business address at 444

Madison Avenue, 8th Floor, New York, NY 10022. It has a foreign registered address at clo

Butterfield Fulcrum Group (Cayman) Limited, P.O. Box. Butterfield House, 68 Fort Street,

Grand Cayman.

29. Moneda, Sociedad Anónima, Administradora de Fondos de Inversión, como

Administradora del Fondo de Inversión Moneda Deuda Latinoamericana ("Moneda

Administradora") is a Chilean corporation which may be served at its United States business

address at444 Madison Avenue, 8th Floor, New York, NY 10022.

30. Moneda Asset Management, Moneda International, Moneda Latin American, and

Moneda Administradora will be collectively referred to as'oMoneda."

Jurisdiction and Venue

31. This Court has jurisdiction over Defendants under CPLR $ 302(a) because each

Defendant transacted business within the State of New York and/or committed tortious acts here.

This Court also has jurisdiction because each of the confidentiality agreements at issue in this

case contains a provision giving exclusive jurisdiction and venue over any disputes related to

these agreements to the state courts in New York County or the United States District Court for

the Southern District of New York. See, e.g., Exhibit A at 5, $ 12; Exhibit B at 6, $ 13; Exhibit

Cat6,$13.

32. Venue is proper under CPLR $ 503(c) because certain Defendants have their

principal places of business in New York County. Venue is also proper pursuant to the

provisions of the confidentiality agreements, which provide for venue in New York County.

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Page 13: Vitro Complaint

Factual Allegations

33. Vitro is the parent holding company for aî international enterprise that

manufacturers and distributes flat glass, glass containers, and other glass products. It is the

largest glass manufacturer in Mexico, and has manufacturing facilities in 10 other countries.

Vitro has distribution centers throughout the Americas and Europe, exporting its products to

more than 50 countries. Vitro employs some 17,000 people directly through its wholly owned

subsidiaries and 1 00,000 indirectly.

34. Like many companies, Vitro experienced financial difficulties as a result of the

recent economic crisis. The sharp decline in demand for new cars and trucks that crippled the

automobile industry, for new homes and buildings that severely impacted the construction

industry, and for the glass bottles that make up a substantial part of Vitro's businesses, resulted

ín a 36.8%o decline in Vitro's consolidated operating income for 2008 compared to 2007 and a

further 22.3% decline in Vitro's operating income for 2009 compared to 2008.

35. As a result of these substantial declines, Vitro was unable to meet its periodic

obligations under certain of Vitro's unsecured senior notes. These notes include Vitro's 8.675%

senior notes due February 1,2012, Vitro's 11.75% senior notes due November 1,2013, and

Vitro's 9.125% senior notes due February 1,2017 (collectively, the "Notes"). As of September

30,2010, Vitro's consolidated outstanding third-party indebtedness was approximately $1.706

billion, including approximately $1.216 billion in outstanding principal under the Notes.

36. Because Vitro has substantial value as a going concern, and, indeed, earns a

substantial profit at the operating level, Vitro and its creditors, including Defendants, have been

negotiating for more than two years to design an orderly restructuring plan for Vitro's debt.

Defendants have been represented in these negotiations by White & Case, Chanin Capital

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Page 14: Vitro Complaint

Partners, and members of a Steering Committee for the self-named "Ad Hoc" group of Vitro

bondholders.

37. These negotiations began after Vitro's creditors, including Defendants, conducted

exhaustive due diligence into Vitro's operations and financial condition. Their due diligence

included the review of and discussions about Vitro's proprietary and non-public information.

This non-public information included extensive financial and strategic information, as well as

discussions about potential restructuring plans. During these discussions, Vitro disclosed non-

public information to Defendants about proposed tender and exchange offers and a consent

solicitation that Vitro planned to make to its bondholders as part of the company's restructuring

plan. Vitro,s non-public information was provided to Defendants and their representatives

pursuant to strict confidentiality agreements. These agreements provided that Vitro's

confidential information could be used onlv for evaluating or effecting a possible restructuring of

the Company's capital structure andlor indebtedness and/or related transactions. Exhibit A at 1-

2; Exhibit B at l-2, Exhibit C at l-2.

38. To facilitate the restructuring process and at the Defendants' insistence, Vitro

agreed to pay a number of Defendants' fees and expenses, including certain fees and expenses of

White & Case and Chanin Capital Partners. Overall, Vitro paid more than $4 million of

Defendants' fees and expenses. Defendants and their representatives led Vitro to believe that

Defendants incurred these fees and expenses to evaluate potential restructuring transactions and

to facilitate good faith negotiations. Based on Defendants' subsequent actions, it appears that

they never intended to engage in good faith negotiations. Instead, they tricked Vitro into paying

their advisors and into disclosing Vitro's confidential information so they could use Vitro's

information to come up with a plan to hold the company, and its restructuring plan, hostage.

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Page 15: Vitro Complaint

39. Vitro and the majority of its creditors (about 650), not including Defendants,

reached agreement on a bankruptcy restructuring plan. Vitro planned to seek court approval for

the proposed restructuring plan (the "Conctffso Plan") during the Concurso Mercantil

proceedings in the Mexican bankruptcy court. The Tender Offer and Exchange Offer and

Consent Solicitation (as defined below), which Vitro had privately disclosed to Defendants, were

an integral part of the Concurso Plan. The response Vitro received to these offers would

significantly affect the cost of Vitro's restructuring and, potentially, the company's ability to

festructure.

40. On November 1, 2010, Vitro launched its Tender Offer, Exchange Offer and

Consent Solicitation for the Notes (the "Tender Offer and Exchange Offer and Consent

Solicitation"), together with other measures designed to obtain the consent of holders of the

company's debt to its proposed Concurso Plan. Vitro announced its projection that holders of

restructured debt would have a nominal recovery of between 68%o to 73%o of the face value of

their debt, and that the Concurso Plan had the requisite support among its creditor body to

accomplish the proposed restructuring through a prearranged Concurso Mercantil proceeding.

See November l, 2010 Release ("Vitro Announces Offers for its Outstanding Senior Notes"),

attached as Exhibit D.

41. Shockingly, and in clear breach of their contractual obligations, Defendants had

announced their opposition to this proposal even before the Tender Offer and Exchange Offer

and Consent Solicitation were filed. Six days prior to the launch, Defendants issued a press

release denouncing the yet-to-be-publicly-disclosed terms of the Vitro proposal as providing an

"unacceptably poor economic outcome" for holders of the Notes. See October 26,2010 Release

("Ad Hoc Committee of Vitro Noteholders Reject Vitro's Initial Consent Solicitation"), attached

as Exhibit E. Defendants' press release was based on non-public, confidential information

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Page 16: Vitro Complaint

relating to the Tender Offer and Exchange Offer and Consent Solicitation that Vitro had given

them pursuant to the terms of the parties' confidentiality agreements. The press release also

contained false statements intended to interfere with and discourage noteholders from

participating in the Consent Solicitation.

42. In addition, it appears that some Defendants may have improperly used or

disclosed confidential information from a July 28, 2010, meeting between Vitro and

representatives for the Defendants' Ad Hoc Committee. Trading in Vitro's bonds suddenly and

inexplicably jumped more than 7,000yo the day after this meeting, and initial analysis has failed

to identiff any plausible reason for the huge trading spike other than use or disclosure of the non-

public and confidential information provided to Defendants.

43. Although Defendants have, at times, pretended to act individually, the facts in this

case, including Defendants' own admissions, show a concerted and coordinated effort by all

Defendants (and others to be named subsequently) to bring Vitro to its knees. Even though

Defendants may have other law firms involved in their actions against Vitro, all Defendants are

represented by the same lawyers, White & Case, and the same financial advisor, Chanin Capital

partners. They all seek to use whatever means at their disposal to seek an unfair advantage over

other creditors and they have carefully divided rimong them the responsibility for the various

pieces of their strategy. For instance, certain Defendants filed involuntary concurso proceedings

in Mexico; certain defendants filed an involuntary bankruptcy proceeding against Vitro's U.S.

subsidiaries in Texas; and certain other defendants, Aurelius and Elliott, and filed breach of

contract suits and sought and obtained ex-parte writs of attachment. Competing motions to

confirm or to vacate the writs of attachment covering certain assets of Vitro and its non-US

subsidiaries in New York are pending before Justice Kornreich.

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Page 17: Vitro Complaint

44. The writs of attachment that Aurelius and Elliott sought and obtained in New

York provide clear evidence of the Defendants' concerted efforts. If they were not part of a

concerted enterprise, those proceedings would put Aurelius' and Elliott's interests in direct

conflict with the interests of all other Defendants, making it impossible for the law firm of White

& Case to represent all Defendants. That is because the New York attachment proceedings, if

successful, would give Aurelius and Eltiott a substantial priority and advantage over other

creditors, including the other Defendants. Those proceedings also threaten to severely damage

Vitro by fteezing its cash flows and causing it to lose customers and revenue. If Vitro is

damaged, all creditors, including Defendants, will suffer.l

45. Aurelius' and Elliott's actions would therefore appear to clearly put their interests

in direct conflict with those of the other Defendants and other creditors of Vitro. Yet no other

Defendant has sought to protect its interests by opposing the actions of Aurelius and Elliott, or

by filing its own lawsuit in New York to try to obtain a similar priority. Why not? Because the

Aurelius and Elliott lawsuits are unquestionably are part of a coordinated effort to give all

Defendants improper leverage in negotiations with Vitro and unjustified priority over Vitro's

other creditors, many of them identically situated note holders. That is the only scenario that

would avoid or waive the otherwise irreconcilable conflict of interest between Aurelius and

Elliott, on the one hand, and the other Defendants, on the other hand.2

46. Defendants' actions in this case are intentional, malicious, and unjustifred. They

are taking undue advantage of a severely weakened and distressed company that is struggling to

survive. Defendants' actions are outrageous and are taken with a deliberate intent to injure Vitro

and are taken with a willful, wanton or reckless disregard of Plaintiff s rights. They are doing

I To be clear, Vitro does not seek relief in this action for any harm that may have been caused as a result of any

defendant's pwsuit of legal remedies.

2 The ad hoc committee has represented that there are no sharing agreements or conflicts waivers.

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Page 18: Vitro Complaint

this to extract an unjustified and inequitable pay-off from this distressed company. They show

no concern for the potentially devastating effects of their actions, including the potential

destruction of a l0l-year-old company supporting more than 17,000 employees directly and

more than 100,000 indirectly. Defendants' actions are directed at members of the public,

including Vitro's innocent creditors, suppliers, customers and employees. Vitro seeks actual and

punitive damages and all other relief to which it is entitled at law and equity.

47. Vitro's investigation of potential claims is ongoing. Vitro expects that it will

assert, and reserves the right to assert, additional claims, including against additional defendants,

once its investigation is complete.

48. All conditions precedent to the bringing of the claims below have been satisfied.

Count 1 - Breach of Contract

49. Vitro incorporates by reference each of the preceding paragraphs.

50. Vitro and Defendants are parties to certain confidentiality agreements, which

Defendants entered into directly or through their agents, pursuant to the terms of those

agreements. The confidentiality agreements include the February 24, 2009 agreement that

Defendants entered into through their counsel, White & Case, and the agreements that members

of the Steering Committee for the Ad Hoc Committee of Vitro Noteholders entered into with

Vitro on August 4,2009, and March 1,2010, as well as other confidentiality agreements. ,See,

e.g., Erj¡ibit A (February 24, 2009 agreement); Exhibit B (sample of the August 4, 2009

agreements); Exhibit C (sample of the March l, 2010 agreements). Defendants who retained

White & Case or joined the Ad Hoc Committee of Vitro Noteholders after these agreements

were signed are bound by these agreements pursuant to the terms of the agreements or because

they accepted the benefits of or ratified the agreements'

51. The confidentiality agreements are valid and binding contracts.

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Page 19: Vitro Complaint

52. Vitro relied on the confidentiality agreements in disclosing non-public,

confidential, ffid proprietary information to Defendants and their representatives, including

White & Case and Chanin Capital Partners. This confidential information included, among other

things, information about proposed and potential transactions related to the restructuring of

Vitro's debt.

53. Defendants breached the confidentiality agreements by using and disclosing

Vitro's confidential information in violation of these agreements. Defendants' disclosures and

use of this information, which included unauthorized press releases, were intended to hinder

Vitro's efforts to proceed with the Tender Offer and Exchange Offer and Consent Solicitation

and to otherwise interfere with Vitro's planned restructuring. Defendants were also in contact

with additional noteholders and other persons who were not authorized to receive confidential

information. Based on information and belief, Vitro alleges that Defendants, directly and

through their representatives, disclosed confidential information in private communications with

other noteholders and persons not authorized to receive confidential information. The

confidential, non-public information that Vitro disclosed to Defendants and their representatives

was covered by one or more of the confidentiality agreements.

54. Vitro has sustained damages as a result of Defendants' breach of the

confidentiality agreements and is therefore entitled to recover these damages from Defendants.

55. Defendants' actions are intended to severely damage Vitro and demonstrate a

wanton disregard for Vitro's rights and those of its creditors, its suppliers, its customers and its

more than 17,000 employees. Defendants' actions evinced a high degree of moral turpitude, and

demonstrated a criminal indifference to Defendants' civil obligations.

56. Defendants' actions are also directed at the public, seeking to prevent the orderly

restructuring of a major international enterprise and threatening the well-being of Vitro, its

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suppliers, its customers, and its employees. Defendants not only breached their contract with

Vitro, but they did so by directly misleading members of the general public, including Vitro

shareholders and non-defendant Vitro bondholders. On information and belief, members of the

general public relied on Defendants' misrepresentations and were harmed thereby. Punitive

damages are therefore justified for Defendants' breaches of the confidentiality agreements.

Count 2 - Injunction

57. Vitro incorporates by reference each of the preceding paragraphs.

58. Defendants have a contractual obligation not to use or disclose Vitro's

confidential information.

59. Defendants have used and disclosed, and continue to use and disclose, Vitro's

confidential information in an effort to disrupt Vitro's orderly restructuring, interfere with

Vitro's business relationships and, potentially, destroy Vitro. Defendants are taking these

actions to try to extract an unjustified price for their vitro bonds.

60. Defendants' actions threaten to prevent Vitro's orderly restructuring, damage

Vitro's business relationships, and, potentially, destroy Vitro. All of these results would cause

Vitro irreparable harm.

6I. Based on the clear provisions of the confidentiality agreements, Vitro is entitled

to limit Defendants' use and disclosure of confidential information to the permitted uses set forth

in the confidentiality agreements.

62. The agreements specifrcally provide

sufficient remedy for any breach of the agreements

equitable relief, including specific performance and

Exhibir B at 6, $ 11; Exhibit c at 6, $ 11

that money damages would not

and that Vitro "shall be entitled to

injunctive relief." Exhibit A at 4,

bea

seek

$e;

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63. Vitro therefore seeks an injunction preventing Defendants from using or

disclosing any of Vitro's confidential information unless such use or disclosure is specifically

permitted by these agreements.

Count 3 - Injurious Falsehood

64. Vitro incorporates by reference each of the preceding paragraphs'

65. Defendants made false statements about Vitro, including, but not limited to, those

published in the Globe Newswire on October 26,2010, that "the economic terms þroposed in

the Initial Consent Solicitation] are considerably less favorable than terms put forward by Vitro

during recent meetings with certain Steering Group members" and that Vitro "[decided] to

launch the Initial Consent Solicitation on terms worse than previously offered during discussions

and without giving the Steering Group any opportunity to review and give input to the Initial

Consent Solicitations Documents."

66. Defendants disclosed and published these and other false statements about Vitro

through public disclosures, press releases, and other means in violation of their obligations under

their confidentiality agreements with Vitro. Based on information and belief, Plaintiff further

alleges that Defendants made similar and additional false statements directly to other

bondholders to discourage them from participating in the Tender Offer and Exchange Offer and

Consent Solicitation or to encourage them to oppose fhe Concurso Plan.

67. Defendants made these false statements maliciously with the intent to harm Vitro,

or with reckless disregard of the falsity of the statements and without regard for the

consequences. A reasonably prudent person would or should have anticipated that economic

damages would naturally flow to Vitro there from.

68. Defendants' false statements about Vitro caused it damages, including lower than

expected response to the Tender Offer and Exchange Offer and Consent Solicitation, additional

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costs Vitro has incurred and will incur to complete its restructuring plan, costs incurred to

respond to Defendants' false statements, and other damages. Defendants' actions also have

damaged the value of Vitro's businesses and threaten to destroy its ability to emerge as an

ongoing enterprise through the restructuring process. Vitro's damages, already substantial,

continue to accrue.

69. Vitro is entitled to recover all such compensatory damages, as well as punitive

damages.

Count 4 - Tortious Interference with Prospective Economic Advantage

70. vitro incorporates by reference each of the preceding paragraphs.

71. Vitro intends to enter into a voluntary reorgarization in the Mexican bankruptcy

courts and had, as part of that process, made tender offer and an exchange offer and consent

solicitation to its then current bondholders. Vitro disclosed its plans to Defendants in

confidential negotiations designed to further Vitro's objective with Defendants' cooperation.

72, Defendants interfered with the planned voluntary rcorganization, the tender offer,

and the consent solicitation through the wrongful means of intentionally, recklessly, and

maliciously using and disclosing confidential information, misrepresenting facts related to Vitro

and the transactions, and falsely disparaging Vitro.

73. Each of the Defendants conspired and acted in concert with one another, and with

others yet to be identified, in carrying out their common scheme and did so with the specific

intent to wrongfully interfere with Vitro's planned voluntary reorganization and damage Vitro.

Each Defendant is therefore responsible for the acts of each of the other Defendants.

74. As a direct and proximate result of Defendants' tortious interference with Vitro's

prospective economic advantage, Vitro was damaged.

75. Vitro is therefore entitled to compensatory and punitive damages.

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Prayer for Relief

WHEREFORE, Vitro prays for relief as set forth below:

l.

6.

Dated:

2.

aa

4.

Awarding actual damages in favor of Vitro against Defendants for all damages

sustained;

Awarding punitive damages;

An injunction preventing Defendants from using or disclosing any of Vitro's

confi dential information;

Pre- and post-judgment interest to the extent and at the rate permitted by law;

Awarding Vitro the costs and disbursements of the action, including reasonable

attomeys' fees, costs, and expenses; and

Granting such other and further relief as the Court deems just and propef.

ApÅI 14,20llNew York, New York

SUSMAN GODFREY L.L.P.

@4p"Robert Rivera, Jr.

rrivera@ susman godfrey. com560 Lexington Ave., l5th FloorNew York, NY 10022(212) 336-833srrivera@ SusmanGodfrey. com

Attomeys for PlaintiffVitro S.A.B. de C.V.

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