Lenders to Salinas’ TV Azteca Look to Transfer Case to New Judge

(Bloomberg) — Lawyers on behalf of US lenders in a long-running case against Mexican billionaire Ricardo Salinas Pliego’s broadcaster TV Azteca are looking to transfer proceedings to a new judge as they try to revive efforts to recover half a billion dollars in debt. 

Akin Gump Strauss Hauer & Feld asked the court to update the case to reflect that $400 million of the company’s notes matured in August without repayment, according to a filing on Friday in a federal court. Alternatively, holders of the majority of the notes requested that Judge Paul Gardephe be removed from the case in favor of another judge. 

“The continued delay in resolution is causing injury to the noteholders, who are unable to recover on notes that have now matured,” the filing said, saying it had been two-and-a-half years since the case was first brought. 

In total, the company owes creditors $500 million including unpaid interest. Holders of the bonds include funds associated with Cyrus Capital Partners, Contrarian Capital Management and Fidelity Investments.

Akin Gump declined to comment for the story. 

The case revolves around $400 million in unsecured notes that TV Azteca, a producer of Spanish-language soap operas and reality shows, sold in 2017. The company defaulted on the bond in 2021 and an attempt by creditors to force it into involuntary bankruptcy was dismissed in favor of the ongoing court dispute. 

In Mexico, Salinas is also tussling with the country’s president Claudia Sheinbaum over an injunction he won that blocked financial authorities from probing his bank and brokerage accounts. He recently announced a plan to delist his flagship company, Grupo Elektra SAB, from public markets in order to run the conglomerate as he sees fit, he said in an interview with Bloomberg News. 

Earlier this month, longtime counsel to Salinas-owned companies, Paul Weiss, withdrew as TV Azteca’s legal representative in the case against bondholders, and was replaced by Greenberg Traurig. 

“In line with our robust financial reorganization announced over four years ago and our openness and willingness to dialogue with bondholders in the US, we decided to strengthen the team responsible for this restructuring by bringing Greenberg Traurig on board,” said Luciano Pascoe, a spokesperson for Grupo Salinas. 

Paul Weiss didn’t respond to requests for comment, while Greenberg Traurig declined to comment. 

Creditors to TV Azteca claim that Mexican courts have done Salinas’ bidding. In 2023, the company won a Mexican court order that prohibited any payments on the bonds until the end of the pandemic. Creditors have said that the court withheld justice because it didn’t give them an opportunity to oppose the move, saying it was a violation of Mexico’s obligations to US investors under trade accords. That proceeding is ongoing.

See: End-of-Pandemic Call Gives Shot to Defaulted Azteca Bondholders

In the latest twist in the Mexican court, TV Azteca brought an accusation before the country’s attorney general over an “alleged misrepresentation” by the plaintiff’s legal representative in Mexico, whose power of attorney had allegedly expired, according to a March 14 filing in New York. 

“TV Azteca’s noteholders have had to engage in a Kafka-esque struggle” in Mexican courts “while simultaneously seeking recovery for TV Azteca’s unlawful defaults on its debt obligations in US court proceedings,” a filing last year in that NAFTA proceeding said.

–With assistance from Michael O’Boyle.

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