The Bank of New York Mellon and London Branch are seeking the company to pay the bond for 400 million dollars which was agreed by both parties in August 2017, as well as the interest generated by the arrears, according to documents of the case to which Expansion had access.
In February 2021, TV Azteca postponed the payment of the coupon for that month, arguing that the pandemic affected its finances and made it difficult for it to attract publicity to its business. At the time, the company was confident of “reaching an agreement as soon as possible”, however, creditors requested early payment of the bonds last year.
But Yanet Sandoval Carrillo, legal representative of TV Azteca, assured that the notice of advance payment, sent on May 3, 2022 by the creditors, was never received by the company, and has asked a civil court in Mexico to declare the ineffectiveness of said notification, according to one of the documents of the case to which Expansion had access.
TV Azteca was not immediately available for comment on the amparo process.
Creditors have sought options for TV Azteca to settle the bond payments, and the lawyer representing The Bank of New York Mellon and London Branch, Fernando del Castillo Elorza, has tried to counteract the precautionary measures through injunctions.
The lawyer filed an appeal on March 15 against the ruling of the Superior Court of Justice of Mexico City in which he argued that “TV Azteca would appear to have no payment obligations.” Del Castillo Elorza states in the documents that this is illegal as it violates “the Political Constitution of Mexico, depriving the Trustee of the Indenture of their fundamental rights to due process.”
In his opinion, the legal representatives of the creditors The Bank of New York Mellon and London Branch did not have “the opportunity to defend themselves against the injunctive relief.” Despite this, the appeal was dismissed on March 23 with the option to challenge the resolution until the 30th of that same month.
The lawyer José Sagredo, an expert in bankruptcy issues from the GLZ firm, agrees with the argument of the defense of the creditors. In his opinion, TV Azteca’s precautionary measures are illegal because the creditors were never given the opportunity to defend the resolution. Sagredo anticipates that TV Azteca’s precautionary measures will eventually lose effect and be annulled, but for this it will be necessary to win the amparo presented by the creditors. “This can take years,” he warns.
Another remedy that creditors The Bank of New York Mellon and London Branch can invoke is the figure of commercial bankruptcy in Mexico so that the company can pay its debts.
TV Azteca used this argument to avoid filing for bankruptcy in the United States, as did three other of its creditors –Plenisfer Investments SICAV-Destination Value Total Return, Cyrus Opportunities Master Fund II, Ltd., and Sandpiper Limited– at the end of March, in a legal proceeding for 63.3 million dollars, different from the one initiated by The Bank of New York Mellon and London Branch.
In a document sent to the United States Bankruptcy Court, the company reported that its operations take place in Mexico, which justifies that the trial be carried out in its country of origin to guarantee impartiality. TV Azteca described this attempt by its three creditors as “unprecedented” and stated that forcing a foreign company to declare bankruptcy in another nation where it hardly has any operations is unfair.
Now TV Azteca is awaiting the resolution of the judge of the New York Court to determine if the decision not to enter Chapter 11 in the United States is applicable, as well as the challenge to the resolution of the amparo lawsuit that they present. representatives of The Bank of New York Mellon and London Branch. Two fronts opened by creditors of the company controlled by Salinas Pliego.