The Sampedro Family launches US appeal against governance dismissal

Spanish business news sources report that the Sampedro Family, the enterprise founders of Grupo Codere have filed a US lawsuit against the firm’s private equity debt-holders, claiming unfair dismissal and non-representation from the firm’s corporate governance structures.

The filing is led by former Codere President Jose Antonio Martinez Sampedro and brother Luis Javier (former Vice President), seeking to annul Codere US private investors decision to remove the Sampedro family from maintaining any form of governance representation despite holding 19% of the corporation’s shareholding.

Entering 2018, Codere debt-holders, amongst them US PE firms’ Silver Point, Contrarian and Abrahams Capital actioned a governance and leadership restructure – appointing Vicente Di Loreto as new Group CEO, supported by Norman Sorensen Valdez as Executive Chairman.

Acting as principal debt holders, Codere’s private investors further terminated all executive/ governance functions held by the Sampedro family.

The Sampedros would appeal the decision with Madrid’s Commercial Court, which last April ruled in favour of Codere debt-holders, stating that the PE firms held a combined right to remove the family from governance as part of the firm’s agreed 2016 €1 billion bankruptcy restructure.

Placing a Connecticut District filing, the Sampedro brothers demand that Codere’s US debt-holders disclose transactional information attached to the combined PE’s debt control of Codere, that the Madrid court had not required.

Furthermore, the Sampedros argue that debt-holders had not followed proper corporate control procedures, purposely bypassing recommending a takeover offer to founders, once they had gained 30% shareholding of the enterprise.

Representatives of the US debt-holders have urged for the filing to be dismissed, claiming that the Sampedro family have used US legal proceedings as ‘simply a trick’ to gain new information for supporting an upcoming  Spanish high court appeal seeking to overturn the Madrid Court ruling.