BUENOS AIRES — An Argentinean appeals court has annulled a lawsuit against U.S. investment firm Hicks, Muse, Tate & Furst and its directors filed by a former partner in Cablevision who claims he is still owed shares in the leading cabler.
Last week Cablevision announced that the court had thrown out the suit filed by former Argentinean banker and media investor Raul Moneta because of constitutional and ethical problems with the proceedings. The appeals court also ordered a probe into the two judges involved.
Suit dates back to last November, when ELP Investments, a Cayman Islands investment company controlled by Moneta, claimed that Hicks Muse broke an agreement on how to use Moneta’s share of the money after ending a partnership in Cablevision parent CEI Citicorp Holdings.
ELP alleged that Hicks Muse, which was administering the joint funds, bought shares in Cablevision without Moneta’s permission, making him a shareholder. Hicks Muse denied this.
Cablevision provided no information on how much compensation Moneta was demanding in the suit or the number of shares he claimed to own.
No one at ELP was available for comment.
Before the split in 2000, Moneta indirectly held some 27% of CEI worth $675 million; Hicks Muse indirectly held 68%.
Moneta was a director of CEI for much of the 1990s, when Argentina’s cable sector was rapidly growing as foreign investment poured in, reaching a peak of 5 million subscribers, or a 50% penetration of TV homes.
He lost his position, but not his shares, when he spent nearly seven months on the run from the law in 1999 accused of conspiracy and tax fraud, which he denied. The charges were later dropped.
Hicks Muse now owns 50% of Cablevision. VLG Argentina, in which John Malone’s Liberty Media is invested, owns the rest.
Despite the ruling, Moneta said he is determined to pursue the matter.
Cablevision, meanwhile, faces a huge debt restructuring. Company defaulted on $797 million in debt after Argentina’s economy imploded at the end of 2001. It also faces a separate lawsuit from Eximius Capital Funding, a Cayman Islands fund reportedly linked to New Jersey vulture fund WR Huff Asset Management. Company is seeking $249,000 in defaulted Cablevision bonds, according to a July filing in New York.