US Spanish Television Network Trustee Sues Spanish Media Company for Return of Alleged “Fraudulent Transfers” Worth $10M
February 24, 2021, Southern District of Florida – Trustee Omar Romay for the liquidating trust of America-CV Station Group Inc. (“ACVSG”) charges a Spanish media company for avoidance and recovery of an alleged transfer in the total amount of $10,000,000.00 under 11 U.S.C. §548 and 550 of the Bankruptcy Code.
Debtor and its affiliates operated an independent Spanish language television network in the United States under the brand names “americateve” and “teveo”. As per the papers filed in the Court, Defendant Mediaset España Communicacion S.A. executed a share purchase agreement with ACVSG’s holding company, Groupo Colte. Under the terms of the contract, Groupo Colte was to allegedly pay $12,500,000.00 to Mediaset in three installments, with the first installment of $10,000,000.00 being due on or before April 23, 2018. The complaint states that ACVSG was “neither a party to the agreement nor signed it,” still paid $10,000,000.00 from its Iberia bank account to Mediaset’s Wells Fargo bank account on the due date towards the first installment.
The Trustee asserts that the alleged transfer was a transfer of property of ACVSG and that the Debtor received “nothing of value” in return for the transfer. The Trustee further argued that since ACVSG did not reflect any outstanding obligations owed to Mediaset on its books and records, the alleged transfer left ACVSG with “unreasonably small capital” considering the other pending litigation claims. Thus, the Trustee seeks to avoid the transfer as “constructively fraudulent” under Sec. 548 (a)(1)(B) of the Bankruptcy Code.
The Trustee further asserts that at the time of the transfer, Mediaset was “aware of ongoing state court litigation” between Romay Parties and the Debtor and still “caused ACVSG to take a position contrary to a settlement agreement.” According to the complaint, Defendant allegedly forced Caribevision Holdings Inc., which held 100% of the voting interest in ACVSG, to “refuse to pay” the Romay Parties and “caused to transfer those funds to Mediaset as part of the share purchase agreement.” The Trustee also contends that the alleged transfer was made for the benefit of Mediaset and “did not relate to the operation of ACVSG or conferred any benefit to ACVSG.” Since ACVSG neither retained possession or control of the transferred amounts or goods, the Trustee seeks to avoid the transfer as “fraudulent” under §548(a)(1)(A) of the Bankruptcy Code.