Kasowitz Wins Sanctions Award for Texas Pacific Group
A New York bankruptcy court awarded Kasowitz private equity client, Texas Pacific Group (“TPG”), over $500,000 in sanctions against three hedge funds who were pursuing unsuccessful involuntary bankruptcy petitions against two former TPG related companies. The hedge funds and others have pursued TPG in courts around the world throughout the past three years on claims relating to TPG's investment in a Greek telecom company, Hellas. The plaintiffs are noteholders of Hellas who claim to have suffered over $1 billion in losses from a late 2009 Hellas default. TPG sold its interest in Hellas in early 2007 to third party Wind/Weather. Rather than pursue Wind/Weather for the late 2009 default, the noteholders have been pursuing TPG and its investment partner APAX for allegedly leaving Hellas insolvent when they sold their interest in early 2007. The noteholders have filed cases in California, Delaware, New York state court, New York federal court, and New York bankruptcy court. There are also related proceedings pending in Luxembourg and London. Kasowitz has represented TPG, one of the largest private equity groups in the world with nearly $60 billion under management, in these matters since 2010, pursuing dismissal of the cases, and thus far obtaining orders in cases filed in Delaware and California. Motions to dismiss are pending in five cases filed in New York federal and state court.
Honorable Martin Glenn’s order awarding sanctions was issued in connection with his dismissal of two involuntary petitions filed in SDNY bankruptcy court by several of the leading hedge funds holding these notes. Kasowitz moved to dismiss the petitions as improperly filed, giving the noteholders a chance to withdraw the petitions or face a motion for sanctions upon dismissal. Judge Glenn granted the motion to dismiss the petitions in early May and subsequently granted Kasowitz’s motion for sanctions on July 18, 2013, awarding TPG $513,000. In issuing the sanctions award, Judge Glenn stated, “The Petitioning Creditors should not be able to wage their global war without consequences.”