TV Azteca SAB agreed to negotiate with U.S. bondholders owed $400 million after a U.S. judge warned the second biggest broadcaster in Mexico that it could be forced to participate in a bankruptcy case in New York, Bloomberg News reported. U.S. Bankruptcy Judge Lisa G. Beckerman told the company that it was obvious to her that TV Azteca had to restructure its debt, despite strong resistance from the company. TV Azteca opposes a U.S. bankruptcy and has used court rulings in Mexico to try to block bondholders from collecting on the defaulted bonds. “Your position that there should be no restructuring is not going over very well with me,” Beckerman told TV Azteca. “It is one thing to say that a restructuring should not take place in the United States and it’s another thing to say ‘I’m ducking restructuring.’” Judge Beckerman said that she would delay ruling on whether she should force the producer of some of the most-watched Spanish-language shows to participate in a bankruptcy case in New York brought by US bondholders. Instead, the two sides will try to hire a former federal judge to act as mediator for about 60 days. “It just sounds like it has to have a restructuring,” Beckerman said of the company. That could happen in or out of court, but either way “it means parties will have to recognize that it’s restructuring time.” Lawyers for TV Azteca and the bondholders were in federal court in Manhattan Tuesday for the end of a two-day trial over the company’s request to dismiss the bondholder’s effort to put the broadcaster into chapter 11 bankruptcy. TV Azteca argues that disgruntled creditors can’t force it into bankruptcy because the company doesn’t own or operate anything of substance in the U.S. And even if Beckerman later rules that TV Azteca must participate in the proposed chapter 11, company managers, who are based in Mexico, may refuse to cooperate, TV Azteca lawyer William Clareman told the judge.
