#USA #Cleveland #Terra Towers #Jorge Hernandez #Peppertree Capital

Peppertree Secures Major Victory Against Terra Towers

In a landmark ruling, affiliates of Peppertree Capital Management, Inc. have successfully obtained a unanimous arbitration award totaling over $354 million against Terra Towers Corp., DT Holdings, and businessman Jorge Hernández. This significant decision, announced by the law firm UB Greensfelder, marks a pivotal moment in the ongoing disputes surrounding telecommunications operation agreements.

The award encompasses $25 million allocated for punitive damages, along with covering Peppertree's legal costs and other expenses. The ruling found the defendants liable for breaching company agreements, disrupting business operations, and engaging in detrimental conduct related to Continental Towers LATAM Holdings Limited, a telecommunications firm engaged in the Latin American market.

Background of the Dispute

The roots of this conflict trace back to 2014-2015 when Peppertree invested in the telecommunications company and entered into a shareholder agreement with Terra Towers. This agreement specified that after an initial five-year lock-up period, either party could initiate a sale process for the company. In 2020, in accordance with this agreement, Peppertree sought to commence the sale process. However, Terra Towers refused to comply, thereby breaching the contract.

In response, Peppertree filed arbitration proceedings in New York in 2021, targeting Terra and its subsidiaries, including Mr. Hernández from Saint Helena, California. Ultimately, the arbitration tribunal ruled entirely in Peppertree's favor, directing the company to proceed with the sale process as outlined in their agreement. The ruling was subsequently ratified by Judge Lewis Kaplan of the Southern District of New York, with further affirmation from a unanimous appellate panel from the U.S. Court of Appeals for the Second Circuit.

The Arbitration Process

The arbitration tribunal held multiple hearings throughout 2024 to ascertain the damages that Terra and Mr. Hernández would be obligated to pay. Notably, in the week leading up to the hearings, the defendants engaged their tenth law firm since the arbitration's inception, as the previous nine had withdrawn over the years. The ongoing legal battles faced by Mr. Hernández's companies also involved litigation against a public U.S. tower firm and two significant international private tower companies.

On March 24, 2025, the tribunal issued a comprehensive 200-page ruling—the fifth of its kind in this protracted arbitration. This ruling established that the defendants did not partake in the necessary procedures to facilitate the company's sale, continuing violations of the company's governing documents while actively attempting to obstruct the sale process. This interference was central to the tribunal's decision to impose the hefty $354 million award.

About Peppertree Capital Management

Founded in 2004, Peppertree Capital Management, Inc. specializes in private equity investments focused on growing communication infrastructure businesses. Currently managing over $6.5 billion in assets and actively investing from its tenth private equity fund and a perpetual debt fund, Peppertree boasts a robust portfolio, having executed more than 170 investments in communication infrastructure entities.

This dramatic arbitration ruling underscores the complexities and challenges that can arise in high-stakes corporate agreements, particularly in the fast-evolving telecommunications sector. As Peppertree moves forward, the industry will be observing closely to see how such a pivotal decision shapes future corporate governance and investment strategies.