MANHATTAN (LN) — U.S. District Judge Lewis Kaplan denied a motion for a stay pending appeal in the litigation between Telecom Business Solution, LLC and Terra Towers Corp., finding the respondents failed to show they were likely to succeed on the merits of their appeal against a $300 million judgment and related contempt orders.
Kaplan, writing in a May 12 memorandum and order, described the respondents' behavior as "perhaps unprecedented defiance of multiple judgments and other Court process." The ruling follows a May 7 opinion and order in which Kaplan held Terra Towers Corp., its affiliate TBS Management S.R.L., and Jorge Hernandez in civil contempt for failing to comply with a turnover order requiring them to transfer their shares in a telecommunications joint venture.
The dispute centers on an investment made more than a decade ago by three entities affiliated with American financial firms, which acquired 45 percent of the shares of a private company operating telecommunications towers in Central and South America. A shareholders agreement granted the minority investors the right to force a sale of the company after a five-year lockup period.
Terra and Hernandez have thwarted the sale process at every turn, Kaplan wrote. In June 2025, the majority shareholders agreed to hire an investment bank to manage the sale but subsequently induced the bank to terminate its engagement of last year, halting the process.
The respondents argued that the filing of an appeal from the January 2026 turnover order divested the district court of jurisdiction to enforce it. Kaplan rejected this, noting that the May 7 order also enforced a judgment confirming the First Partial Final Award, which the Second Circuit affirmed in February 2024.
"The filing of a notice of appeal from the Turnover Order months ago did not oust this Court of jurisdiction to act on the contempt motions decided on May 7," Kaplan wrote.
The respondents also contended that enforcing the turnover order created substantial risks of violating laws in El Salvador and Guatemala, where the joint venture's assets are located. Kaplan dismissed these claims as "vague and conclusory" and "little more than eyewash," noting that the respondents provided no factual or legal basis to support the assertion that transferring their shares would violate foreign law.
"Respondents’ unsupported musings do not even remotely support their arguments and certainly afford no basis for supposing that the respondents have any realistic possibility of success in the court of appeals," Kaplan wrote.
Regarding irreparable injury, Kaplan noted that the respondents' argument was "evocative of the oft told tale of a plea for mercy by a child about to be sentenced for murdering its parents on the ground that the child is an orphan." He emphasized that the petitioners had been irreparably injured for years by being locked into an illiquid minority position despite their contractual right to force a sale.
The balance of hardships favored the petitioners, Kaplan concluded. On one side, the respondents would merely be obliged to live up to their contractual commitments; on the other, the petitioners would suffer incalculable damage from having their capital tied up indefinitely.
Kaplan pointed out that the respondents could obtain a stay of the $300 million money judgment as a matter of right by posting a bond or other security under Federal Rule of Civil Procedure 62(b).