The third richest man in Mexico, Ricardo Salinas Pliego, has won a battle against his creditors in the United States. Judge Lisa G. Beckerman has dismissed the involuntary bankruptcy request against TV Azteca that was presented last March by the holders of 63 million unsecured bonds in dollars due to the suspension of payments that the company incurred for a bond of 400 million Dollars. “The Court establishes that the claims of the petitioning creditors are subject to a good faith dispute and, therefore, the Chapter 11 cases must be dismissed,” the bankruptcy court judge in New York ruled.
Salinas Pliego’s attorneys argued that the involuntary bankruptcy petition filed by Plenisfer Investments, Cyrus Opportunities and Sandpiper Limited last March amounted to a “tactical maneuver” in connection with litigation pending before the District Court. In the presentation of its defense, TV Azteca also assured that Mexico is a “necessary and unique forum” in which a judicial reorganization of the alleged debtors can be carried out and assured that Chapter 11 would only harm the creditors already the company itself.
In the midst of negotiating with the rest of the creditors to reach a consensual agreement on a new payment plan, the Mexican millionaire has won an important legal battle against this handful of creditors who sought to force the businessman through involuntary bankruptcy. According to the resolution published this Monday by the New York court, the requesting creditors are not the only counterparties to the contract and, therefore, they cannot determine the debts under those documents.
The disagreement between US creditors and Salinas Pliego has its origins in 2017, when the company issued a bond for 400 million for a period of seven years. However, in February 2021, it announced the suspension of interest coupon payment due to insolvency issues following the Covid-19 pandemic. Two years later, and faced with continued non-payment, those affected took their claim to court under the appeal of involuntary bankruptcy.
With this ruling, Salinas Pliego gets a breath of fresh air in his mess with his creditors in the United States, however, reaching a new payment plan agreed upon with the rest of the creditors is still in process. At least, in the first attempt at this negotiation it has failed. The businessman reported in writing that despite the arduous work of 67 days, an agreement was not reached, however, he will insist on reaching a new schedule. In this first failed attempt, the creditors demanded cash payment of $105 million and an extension of the bond to 2030, while the businessman proposed only an initial cash payment of $45 million and a maturity of the divided instrument in 2030. already 2034.
The television station directed by Salinas Pliego recognizes in its projections, included in its payment proposals to its creditors, the decline of the business in the face of staunch competition from streaming platforms. streaming. According to its projections, in 2033 its cash flow will be 1,660 million pesos, which will represent a drop of 42% compared to 2022. This financial information has been disseminated through its own channels, because since last June The Mexican Stock Exchange suspended the trading of TV Azteca shares.
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