Rafael Catalá, Spain’s former justice minister, has been forced to take control of Codere SA’s legal counsel to oversee the firm’s ongoing shareholder dispute between the Martinez Sampedro family and US debt holders.
Spanish business news sources report that an embattled Codere no longer maintains a functional counsel to advise its corporate governance, following the successive departures of three executives overseeing the Bolsa Madrid gambling group’s legal frameworks.
A former board member under the Martinez Sampedro regime, Catalá rejoined Codere last summer as regulatory advisor counselling governance on imminent changes to Spain’s federal gambling laws following the formation of new left-wing coalition government.
For the past six months, Codere is reported to have operated without a legal counsel, following the departure of former incumbent Sebastián Cuenca in light of the firm declaring €20 million in ‘overstated earnings’ related to its Mexican market activities during 2019.
The costly blunder would see Codere governance sanction an immediate review of the firm’s auditing and compliance structures.
Catalá becomes the latest counsel to mediate Codere’s long-standing shareholder dispute, which was launched back in 2017 by the Martinez Sampedro family against US hedge funds Silver Point, Prudential and Abrahams Capital.
The Martinez Sampedro family maintains that US debt-holders led by Silver Point had failed to follow proper corporate control procedures during its €1 billion restructure of Codere (2014-to-2015), as deal stakeholders had ‘purposely bypassed’ recommending a takeover offer to founders once they had gained 30% shareholding of the company.
US debt holders assert that the family held no rights to a takeover proposal, as its €1 billion financing was attached to a ‘corporate rescue package’ with its terms agreed on by several private financing institutions.
The outcome of Codere’s shareholder dispute is recognised as a key factor for the survival of the company, which last month was granted a €250 million credit extension by existing debt holders helping it avoid bankruptcy.