#United States #Cleveland #Peppertree #Terra Towers #Jorge Hernandez

Peppertree Claims Victory in $354 Million Arbitration

In a significant ruling, Peppertree Capital Management, Inc. achieved a unanimous arbitration award exceeding $354 million against Terra Towers Corp. and Jorge Hernandez, as announced by UB Greensfelder, a legal representative of Peppertree. The arbitration award includes punitive damages amounting to $25 million, in addition to covering Peppertree's legal fees and other related expenses.

The basis of the award stemmed from findings that Terra Towers, DT Holdings, and Hernandez were liable for violations of company agreements and for disruptive conduct during the operation of Continental Towers LATAM Holdings Limited, a telecommunications enterprise focused on Latin America's communications infrastructure.

Background of the Dispute

This legal saga dates back to 2014-2015, when Peppertree made substantial investments in Continental Towers and entered a Shareholders Agreement with Terra Towers. This Agreement outlined a specific procedure for selling the company, which stated that after a five-year lock-up period, any party could initiate the sale process. When Peppertree attempted to enact this provision in 2020, Terra Towers contravened the Agreement by refusing to sell.

In response to this breach, Peppertree initiated arbitration proceedings in New York in 2021 against Terra Towers and Hernandez. The independent Arbitration Tribunal ruled entirely in favor of Peppertree, confirming that the sale process had to comply with the previously outlined Agreement. Judge Lewis Kaplan from the Southern District of New York later affirmed the Tribunal's award, a decision that was upheld by a unanimous appellate panel from the U.S. Court of Appeals for the Second Circuit.

The Arbitration Proceedings

In 2024, the Tribunal convened multiple sessions to deliberate on the damages owed by Terra Towers and Hernandez. During this time, it was noted that the week before the hearing, Terra and Hernandez changed their legal representation for the tenth time since the start of the arbitration, as all nine previous firms had withdrawn. This struggle for legal counsel mirrors the ongoing complexities in their financial dealings, suggesting significant underlying issues.

The Arbitration Tribunal issued a comprehensive 200-page award document on March 24, 2025, which represented the fifth ruling in this protracted arbitration saga. The Tribunal's decision largely rested on the finding that the Respondents had continually violated processes outlined in the Company's governing documents. In addition, it indicated that they had actively hindered efforts to facilitate the sale of the company, culminating in the substantial monetary award against them.

About Peppertree Capital Management

Founded in 2004, Peppertree Capital Management is a private equity firm that specializes in investing in growing communication infrastructure companies. Currently managing over $6.5 billion and operating its tenth private equity fund alongside a debt fund, Peppertree has conducted more than 170 investments in this industry. The company’s success reflects a robust strategy focused on infrastructure scalability and sustainability.

This recent ruling exemplifies Peppertree's commitment to holding parties accountable for violations within corporate agreements and underscores the essential nature of adhering to legal and operational mandates in business. The significant award serves not only to vindicate Peppertree’s position but also to potentially influence the behavior of other companies within the telecommunications sector.

As this arbitration case illustrates, the stakes in corporate governance and disputes surrounding major investments are high, and compliance with set agreements is non-negotiable.