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UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

www.flsb.uscourts.gov

In re:

AMERICA-CV STATION GROUP INC., 

 Debtor

____________________________________/

CHAPTER 11

Case No. 19-16355-BKC-LMI

OMAR ROMAY, Liquidating Trustee, 

for the Liquidating Trust of America-CV

Station Group Inc.,

 Plaintiff, 

v. 

MEDIASET ESPAÑA COMMUNICACION 

S.A.,

 Defendant.

_______________________________________/

Adv. Pro. Case No. 21-01059-LMI

MEMORANDUM OPINION ON FINAL JUDGMENT

THIS MATTER came before the Court for trial upon the Complaint to Avoid 

Laurel M. Isicoff, Judge

United States Bankruptcy Court 

___________________________________________________________________________

ORDERED in the Southern District of Florida on September 18, 2024.

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Transfer and to Recover Property (ECF #1) (the “Adversary Complaint”) filed by 

Plaintiff, Omar Romay, as Liquidating Trustee for the Liquidating Trust of Debtor 

America-CV Station Group, Inc. (“Plaintiff” or “Liquidating Trustee”) against 

Mediaset España Comunicación, S.A., now known as Grupo Audiovisual 

Mediaset España Comunicación, S.A.U. (“Mediaset” or the “Defendant”). The 

Court held a six-day trial on the Adversary Complaint on March 12, 13, 15, 18, 

19, and 20 of 2024 (the “Trial”). For the reasons set forth herein, the Court will 

grant judgment in favor of the Defendant Mediaset.

JURISDICTION AND PROCEDURAL HISTORY

The Court has jurisdiction over this adversary proceeding pursuant to 28 

U.S.C. §1334(b). This is a core proceeding for which the Court is authorized to 

determine all matters in accordance with 28 U.S.C. §157(b)(2)(H). The parties 

agree the Court has authority. Venue is proper in this district pursuant to 28 

U.S.C. §1409. The statutory authorities which govern the relief requested by the 

Plaintiff in the Adversary Complaint are 11 U.S.C. §§548(a) and 550.

On May 14, 2019 (the “Petition Date”), America-CV Station Group, Inc.

(“America CVSG” or “Debtor”) filed a voluntary petition in the United States 

Bankruptcy Court for the Southern District of Florida (the “Bankruptcy Court”) 

for relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy 

Code”) under Case No. 19-16355-BKC-AJC (the “Main Case”). Three other 

companies affiliated with the Debtor also filed for bankruptcy: Caribevision 

Holdings, Inc. (“Caribevision”)1 under Case No. 19-16359-BKC-AJC, America-CV 

1 At some point after March 9, 2017, Caribevision changed its name to America Teve Holdings, 

Inc. The Court will refer to Caribevision as Caribevision even if the period to which the Court is

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Network, LLC (“America-CV Network”) under Case No. 19-16976-BKC-AJC, and 

Caribevision TV Network, LLC (“Caribevision Network”) under Case No. 19-

16977-BKC-AJC (Caribevision, America-CV Network, and Caribevision Network 

are collectively, the “Affiliated Debtors”).

Before the bankruptcy cases were filed, the Romay Parties2 on the one 

hand and America CVSG and the Affiliated Debtors on the other were involved

in extensive litigation including the First Romay State Court Litigation (defined 

hereinafter) and the Second Romay State Court Litigation (defined hereinafter). 

Based upon the Second Romay State Court Litigation, the Romay Parties filed 

joint and several claims in the amount of $12,919,740.88 against each of 

America CVSG and the Affiliated Debtors (the “Romay Claim”)3 in each of the 

bankruptcy cases. During the chapter 11 cases the Debtor, the Affiliated 

Debtors, and the Romay Parties settled the Second Romay State Court Litigation 

and that settlement (the “Romay Settlement”) became a part of the Debtor’s 

chapter 11 plan (Main Case ECF #125 )4 (the “Plan”). The Plan provided that the 

Romay Claim would be satisfied, in part, by assignment to a Liquidating Trust 

of a fraudulent conveyance action to recover payment of a $10 million prepetition payment to Mediaset (the “Transfer”). The Romay Parties also received a 

referring Caribevision’s corporate name was America Teve, and some documents refer to America 

Teve.

2 The “Romay Parties,” as defined in the Plan (defined hereinafter), are Omar Alejandro Saul 

Romay, Okeechobee Television Corp., Promisa, Inc., Sherjan Broadcasting, Inc., Telecenter, Inc., 

and America Teve Network, Inc.

3 The “Romay Claim,” as defined in the Plan (defined hereinafter) is: “the following joint and 

several claim filed by the Romay Parties in the amount of $12,919,740.88: (i) Claim No. 3-1 in 

the Caribevision Holdings Case, (ii) Claim Nos. 9-1 and 11-1 filed in this Chapter 11 Case, (iii) 

Claim No. 20-1 filed in the America-CV Network Case, and (iv) Claim No. 1-1 in the Caribevision 

Case” (“Proofs of Claim”).

4 The Court cites entries on the Main Case docket as “Main Case ECF #”.

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lump sum cash distribution of $1.5 million pursuant to the Plan.

On February 24, 2021, the Plaintiff filed this adversary proceeding. 

Various issues were resolved by pre-trial and mid-trial motions. The remaining 

issues are the subject of this ruling.5 

FINDINGS OF FACT AND CONCLUSIONS OF LAW6

Mediaset7 is a Spanish company with its principal place of business in 

Madrid, Spain, where it conducts the vast majority of its business, focusing for 

the most part on television broadcasting. Mediaset operates primarily outside 

the United States. In 2008, Mediaset purchased a minority interest in Pegaso 

Television, Inc. (“Pegaso”), a Delaware corporation. Pegaso owned a minority 

interest in Caribevision, also a Delaware corporation. Caribevision in turn owned 

stock in America CVSG which collectively operated television and radio stations 

5 After this Court denied Mediaset’s motion to dismiss, Mediaset filed its answer and affirmative 

defenses on March 22, 2022 (later amended on November 4, 2022). The Court granted in part 

Mediaset’s motion for summary judgment regarding WJAN ownership, holding that WJAN was 

an asset of America CVSG as of April 23, 2018, and denied in part that motion as to adequate 

capitalization. Defendant, Mediaset’s Motion for Partial Summary Judgment as to WJAN 

Ownership and Adequate Capitalization (ECF #173); Order Granting In Part and Denying In Part 

Defendant Mediaset’s Motion for Partial Summary Judgment as to WJAN Ownership and Adequate 

Capitalization (ECF #328). The Court granted in part Plaintiff’s motion for summary judgment on 

the issue of personal jurisdiction and denied all other motions for summary judgment. Order 

Denying Defendant, Mediaset España Comunicación, S.A’s Motion for Partial Summary Judgment 

on Standing (ECF #337); Order on Motions for Summary Judgment Relating to Personal Jurisdiction 

(ECF #342). The Court denied Mediaset’s motion for judgment on partial findings and granted 

Plaintiff’s motion for judgment on partial findings under Fed. R. Civ. P. 52(c) as to Mediaset’s 

first affirmative defense under 11 U.S.C. §548(c); Mediaset’s remaining second affirmative 

defense was withdrawn. Order Denying Mediaset’s Ore Tenus Motion for Judgment on Partial 

Findings (ECF #335); Order Granting Plaintiff’s Motion for Partial Findings Under Rule 52C (ECF 

#340).

6 The findings of fact and conclusions of law set forth herein constitute the Court’s findings of 

fact and conclusions of law pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure 

(“Fed. R. Bankr. P.”). To the extent any of the following findings of fact are determined to be 

conclusions of law, they are adopted, and shall be construed and deemed, as conclusions of law. 

To the extent any of the following conclusions of law are determined to be findings of fact, they 

are adopted and shall be construed and deemed, as findings of fact. Some of these facts are not 

contested and were set forth in the Joint Pretrial Stipulation (ECF #199) submitted before the 

Trial.

7 Mediaset was formerly known as Gestavision Telecinco, S.A. 

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in the United States, including Puerto Rico (collectively the “Broadcast 

Businesses”). Caribevision itself did not have operations. At some point the 

operations of the Broadcast Businesses were transferred to another affiliate –

America-CV Network. However, America CVSG continued to own the licenses to 

operate the Broadcast Businesses, the use for which America-CV Network paid 

a monthly fee to America CVSG.

When Mediaset purchased the stock in Pegaso, two Mediaset employees 

were appointed to Caribevision’s six-member board, Angel Santamaria Barrio 

(“Santamaria”) and Ana Cristina Castilla (“Castilla”).

8 In addition, Mediaset 

designated Santamaria to serve as an employee of Caribevision; in that capacity 

Santamaria worked in “treasury and all the financial matters” and, according to 

Marcell Felipe, in-house counsel for the Debtor and Affiliated Debtors, at some 

point Santamaria served as CFO (of which entity or all, or when, is not clear).9

At some point after Mediaset purchased its interest in Pegaso, Caribevision 

and the Romay Parties entered into a joint venture arrangement pursuant to 

which Caribevision owned 50% of America CVSG and Omar Romay, in his 

individual capacity, together with some of the other Romay Parties owned the 

other 50%. Romay was operating the Broadcast Businesses pursuant to the joint 

venture agreement.

8 During the relevant time period, Carlos Vasallo or his entities appointed two members to the 

Caribevision board: Mr. Vasallo and Marcell Felipe (Mr. Vasallo’s attorney and eventual corporate 

counsel for America CVSG). Pegaso appointed four representatives: two representatives 

associated with Alejandro Burillo- Emilio Braun (Mr. Burillo’s nephew, who also had an equity 

interest in Pegaso through Grupo Brabur) and Fernando Elias Calles (attorney for Mr. Burillo 

and Pegaso and director of Pegaso); and two representatives of Mediaset- Castilla and 

Santamaria.

9 Mediaset disputes that Santamaria had any real involvement in the Broadcast Businesses after 

the joint venture agreement with Romay. See Mediaset’s Motion for Reconsideration of Order on 

Motions for Summary Judgment Relating to Personal Jurisdiction (ECF #353). 

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In 2011, Caribevision, along with other entities holding direct or indirect 

interests in the Broadcast Businesses (including Mediaset), sued the Romay 

Parties and others (the “First Romay State Court Litigation”) alleging that Romay 

had breached his fiduciary duties to Caribevision and that the Romay Parties 

had breached the joint venture agreement. In November 2015, a $58 million 

verdict was entered in favor of Caribevision, Mediaset, and others against the 

Romay Parties and other defendants (the “Romay Judgment”). Around this time 

the FCC scheduled what is called a reverse auction for broadcast licenses.10

On December 7, 2015, the parties to the First Romay State Court Litigation

agreed to split up their businesses pursuant to a settlement in which America 

CVSG (the entity that owned the broadcast licenses used in the Broadcast 

Businesses) would sell those licenses through an FCC “reverse auction”, and the 

proceeds would be divided in a waterfall designed to pay the Romay Judgment 

to the successful plaintiffs and give some proceeds to the Romay Parties. The 

settlement was premised on the expectation that the sale of the TV licenses in 

the FCC reverse auction (the “FCC Auction”) would yield more than $200 million

in proceeds, so that, even after accounting for the $58 million Romay Judgment, 

there would still be substantial profits to be split between Caribevision and the 

Romay Parties. The First Romay State Court Litigation settlement was reflected 

in a Confidential Settlement Agreement (the “CSA” or “December 2015 

Agreement”). Under the CSA, the entities responsible for making decisions about 

management of the Auction as well as of America CVSG, and America-CV 

10 The Court will address the FCC Auction in more detail in the discussion of the expert testimony 

regarding valuation of the broadcast licenses.

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Network, as well as distribution of any auction proceeds were Caribevision, 

Caribevision Network, and Caribevision Station Group, LLC. The agreements 

reflected in the CSA were never realized because the proceeds of the Auction, 

approximately $13 million (the “Auction Proceeds”), were a fraction of what was 

anticipated.

Disputes arose almost immediately about Romay’s entitlement to any of 

the Auction Proceeds. After the Auction results were finalized in April of 2017, 

Romay demanded between $8-9 million. Members of the Caribevision board of 

directors, including counsel, held extensive internal discussions regarding the 

FCC Auction results, the Auction Proceeds, and whether Romay should receive 

any of it. Ultimately, Caribevision decided that based on its interpretation of the 

CSA, as well as its advice from counsel, it would not distribute any Auction 

Proceeds to Romay.

On December 12, 2017, the Romay Parties initiated a lawsuit against 

America CVSG, Caribevision, Caribevision Network, and Caribevision Station 

Group, LLC (collectively the “Caribevision Defendants”), and Spanish 

Broadcasting Systems, Holdings Group, Inc. seeking to recover what the Romay 

Parties claimed was their share of the Auction Proceeds and other damages (the 

“Second Romay State Court Litigation”) for a total claim of $21,000,000.00.

Even before the Second Romay State Court Litigation was filed, Mediaset 

had decided it wanted out of the Broadcast Businesses. After extensive 

negotiations, on March 23, 2018, Mediaset and Grupo Colte, S.A. de C.V. (“Grupo 

Colte”), the largest shareholder of Pegaso, entered into a Share Purchase 

Agreement whereby Grupo Colte agreed to purchase Mediaset’s shares in Pegaso 

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(the “SPA”). Pursuant to the SPA, Grupo Colte purchased from Mediaset 

21,594,787 shares of stock (the “Shares”) in Pegaso. 

Pursuant to the SPA, the purchase price for the Shares was 

$12,500,000.00, payable by Grupo Colte in three installments. The first 

installment in the amount of $10,000,000.00 was due to Mediaset on April 23, 

2018. The second installment, in the amount of $1,250,000.00 was due on 

March 31, 2019. The third installment, also in the amount of $1,250,000.00, 

was conditioned on the outcome of the Second Romay State Court Litigation. On 

April 23, 2018 (the “Transfer Date”), America CVSG sent a wire of 

$10,000,000.00 from its Iberia Bank account to Mediaset (the “Transfer”). 

According to Mediaset, it did not realize the funds were not sent by Grupo Colte 

until after Mediaset became aware of the alleged fraudulent transfer claim.

The Adversary Complaint has three counts – Count I seeks relief under 11 

U.S.C. §548(a)(1)(B) – constructive fraud; Count II seeks relief under 11 U.S.C.

§548(a)(1)(A) – actual fraud; Count III seeks relief under 11 U.S.C. §550 –

recovery of the funds transferred. The Plaintiff bears “the burden of proving all 

elements of a fraudulent transfer claim by a preponderance of the evidence.” 

General Electric Credit Corporation of Tennessee v. Murphy (In re Rodriguez), 895 

F.2d 725, 726 n.1 (11th Cir. 1990); In re Gomez, 560 B.R. 866, 872 (Bankr. S.D. 

Fla. 2016).

11

Constructive Fraud

To prevail on a claim for recovery of a constructively fraudulent transfer, 

11 Certain elements of both Counts I and II are not disputed – (a) the $10,000,000 that is the 

subject of the Transfer was property of the Debtor on the date of the Transfer, and (b) the Transfer 

was made within two years of the Petition Date.

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the Plaintiff must prove that the Debtor “received less than a reasonably 

equivalent value in exchange for such transfer or obligation”; and

(I) [The Debtor] was insolvent on the date that such transfer was 

made or such obligation was incurred, or became insolvent as 

a result of such transfer or obligation; [or]

(II) [The Debtor] was engaged in business or a transaction, or was 

about to engage in business or a transaction, for which any 

property remaining with the debtor was an unreasonably 

small capital; [or] 

(III) [The Debtor] intended to incur, or believed that the debtor 

would incur, debts that would be beyond the debtor’s ability 

to pay as such debts matured[.]

11 U.S.C. §548(a)(1)(B)(i), (B)(ii)(I)-(III).

A. America CVSG did not receive reasonably equivalent value for 

the Transfer. 

Reasonably equivalent value, although not defined in the Bankruptcy 

Code, focuses on what a debtor has received in exchange for the transfer. See 

Menchise v. Clark (In re Dealers Agency Services, Inc.), 380 B.R. 608, 619-20

(Bankr. M.D. Fla. 2007) (internal citations omitted). The Eleventh Circuit has 

recognized that the “concept of ‘reasonably equivalent value’ does not demand a 

precise dollar-for-dollar exchange.” Advanced Telecomm. Network, Inc. v. Allen (In 

re Advanced Telecomm. Network, Inc.), 490 F.3d 1325, 1336 (11th Cir. 2007). 

Still, value must be quantifiable and objectively comparable to the amount the 

debtor gave up. See Menotte v. Leonard (In re Leonard), 418 B.R. 477, 486 (Bankr. 

S.D. Fla. 2009) (holding that debtor did not receive reasonably equivalent value

under section 548(a)(1)(B) when the debtor gave value of $56,000 and received 

value of $18,250). 

Mediaset argues that America CVSG received reasonably equivalent value 

in exchange for the Transfer by virtue of a book entry in the general ledger of 

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America CVSG describing the Transfer to Mediaset as a loan to Pegaso.

12 

However, that is all there was – a book entry, and only on the books of America 

CVSG. There was no promissory note evidencing an obligation from Pegaso to 

America CVSG. None of Pegaso’s books or records, or tax returns, ever listed an 

obligation from Pegaso to America CVSG. There was a $10,000,000.00

promissory note signed near the time of the Transfer, with Pegaso as the 

borrower and America Teve Holdings, Inc. as the lender. That promissory note 

does reference the purchase of the Mediaset Shares. However, Pegaso was not 

the purchaser of the Mediaset Shares – Grupo Colte was. And America Teve 

Holdings, Inc. did not provide the funds for the Transfer; that was America 

CVSG. There is no dispute that there was no written agreement between Pegaso 

and America CVSG with respect to the $10,000,000.00 journal entry. And

Mediaset has not established by a preponderance of the evidence that there was 

any unwritten agreement between Pegaso and America CVSG with respect to the 

$10,000,000.00 journal entry. See St. Joe Corp. v. McIver, 875 So.2d 375, 381 

(Fla. 2004) (“An oral contract . . . is subject to the basic requirements of contract 

law such as offer, acceptance, consideration and sufficient specification of 

essential terms. . . . A party who asserts an oral contract must prove its existence 

12 The Court previously granted, in part, Plaintiff’s Motion for Judgment on Partial Findings, with 

respect to the issue of whether Mediaset provided value to America CVSG in exchange for the 

Transfer. While that ruling was made in connection with Mediaset’s first affirmative defense 

asserted under 11 U.S.C. §548(c), the same reasoning applies to the Court’s finding that America 

CVSG did not receive reasonably equivalent value under 11 U.S.C. §548(a)(B)(i). See Keith Eickert 

Power Products, LLC v. Escada (In re Keith Eickert Power Products, LLC), 344 B.R. 685, 690 n.1 

(Bankr. M.D. Fla. 2006) (finding no reasonable value was provided in exchange for transfer and 

that the same reasoning also precluded transferee from asserting the protections afforded by

section 548(c): “[w]hether reasonable value or simplistically ‘value’, the Company received 

nothing in exchange for its funds.”).

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by a preponderance of the evidence.”) (internal citations omitted). 

Under Florida law, a credit agreement must be in writing, express 

consideration, set forth the relevant terms and conditions, and be signed by both 

the creditor and the debtor in order to be enforceable. See Fla. Stat. 

§687.0304(2); Wells Fargo Bank, N.A. v. Richards, 226 So. 3d 920 (Fla. 4th DCA 

2017); Eboni Beauty Academy v. AmSouth Bank of Florida, 761 So. 2d 481 (Fla. 

5th DCA 2000). Section 687.0304 of the Florida Statutes defines credit 

agreements to mean “an agreement to lend or forbear repayment of money, 

goods, or things in action, to otherwise extend credit, or to make any other 

financial accommodation.” Fla. Stat. §687.0304(1)(a). Mediaset argues that there 

are circumstances in which, under a variety of theories, Florida law will enforce 

a loan obligation notwithstanding the absence of a written agreement. However, 

in each of the cases on which Mediaset relies, there are specific facts that are 

not present here. Mediaset also suggests, in closing submissions, that the 

appropriate way in which to address the lack of written documentation is to 

discount the value of the “receivable” to $3 million; however, there was no 

evidence presented at Trial, by way of expert testimony or otherwise, that would 

support this argument.

Based on the testimony of the witnesses at Trial regarding this transaction, 

primarily Jorge Salas, the CFO of America CVSG, and Marcel Felipe, corporate 

counsel for the Broadcast Businesses as well as to Carlos Vasallo, the Court 

finds that at the time the Transfer was made, there was no clear idea how to 

describe the Transfer and no intent, even by America CVSG, to make a loan to 

any entity (making loans was not something America CVSG “did”). The loan 

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“idea” was described by Mr. Felipe in his testimony as a “placeholder” “until it 

got sorted out.” Ultimately, when the books and records of America CVSG were 

audited, and at the direction of the auditors, the so-called loan was 

recharacterized as a distribution. When questioned about whether the “loan” 

was expected to be paid, twice, Mr. Salas testified: “[n]obody told me they would 

not be paid, but nobody told me it will be collected.”

There was no evidence presented at the Trial that Pegaso ever agreed to be 

indebted to America CVSG for the $10,000,000.00 journal entry. As the court 

wrote in Nat'l Bank of Paulding v. Fid. & Cas. Co., 131 F. Supp. 121, 123–24 (S.D. 

Ohio 1954): “[i]n order to have a loan, there must be an agreement, either 

expressed or implied, whereby one person advances money to the other and the 

other agrees to repay it upon such terms as to time and rate of interest, or 

without interest, as the parties may agree. In order to have a contract, there 

must be a meeting of minds.” But there was no “meeting of the minds”; Pegaso 

never received $10,000,000.00 from America CVSG or from Caribevision.

Mediaset’s expert, Mr. Feltman, testified that he never saw a document where 

Pegaso obligated itself to pay America CVSG $10,000,000.00. There was no 

evidence that either Pegaso or America CVSG benefitted from the purchase of 

Mediaset’s shares by Grupo Colte. The accountant for the Broadcast Businesses

and Pegaso, Jose Iglesias, testified that there was no loan listed on the Pegaso 

tax return under liabilities for the relevant time period.

Based on the evidence, and absence thereof, the Court finds that at the 

time of the Transfer, there was no loan or any intent to create a loan; the journal 

entry had no legally cognizable value. The Court therefore holds that America 

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CVSG did not receive reasonably equivalent value or, in fact, any value, in 

exchange for the Transfer. 

B. America CVSG was not insolvent at the time of the Transfer.

The Adversary Complaint alleges that the Transfer caused America CVSG 

to become insolvent, left America CVSG with inadequate capital, and caused 

America CVSG to be unable to pay its debts as they came due.

The Bankruptcy Code defines “insolvent” as—

(A) with reference to an entity other a partnership 

and a municipality, financial condition such that 

the sum such entity’s debts is greater than all of

such entity’s property, at a fair valuation, 

exclusive of—

(i) property transferred, concealed, or removed 

with intent to hinder, delay, or defraud such 

entity’s creditors; and

(ii) property that may be exempted from 

property of the estate under section 522 of this 

title;

11 U.S.C. §101(32)(A). The issue then is whether the fair value of a debtor’s debts 

exceeds the fair value of the debtor’s assets. See Schwartz v. Halwani (In re 274 

Atl. Isles, LLC), 651 B.R. 319, 331 (Bankr. S.D. Fla. 2023). This is also referred to 

as the “balance sheet test” of insolvency. Id. 

With respect to the insolvency analysis in this case, the value of two assets, 

or asset groups, are at issue, while the calculation of one debt is at issue. The 

two asset values at issue are first, the value of the $10,000,000.00 “loan” to 

Pegaso; and second, the value of the broadcast licenses that America CVSG 

continued to own at the time of the Transfer. The debt at issue is the value of the 

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then contingent liability owed to the Romay Parties in connection with the Second 

Romay State Court Litigation.

The Court has already addressed the value to American CVSG of the 

$10,000,000.00 Pegaso “loan”. That value is zero. 

1. Valuation of the Broadcast Licenses

The other asset valuation at issue is the value of the broadcast licenses at 

the time of the Transfer. At the time of the Transfer, and after the Auction, 

America CVSG continued to own at least five broadcast licenses, however for 

purposes of the insolvency analysis the parties focused on the value of three 

broadcast licenses – two in Puerto Rico, WJPX and WJWN13, and one in Miami –

WJAN14.

Four experts testified as to the value of the television broadcast licenses –

Mr. Kapila, Mr. Feltman, Dr. Harold Furchtgott-Roth, and in rebuttal to Dr. 

Furchtgott-Roth, Ms. Lauren Ross. Mr. Feltman’s testimony regarding solvency, 

which incorporated the value of the licenses, was based on Dr. Furchtgott-Roth’s 

testimony. Mr. Kapila, who does not have any expertise in valuing FCC licenses 

or broadcast stations, based his testimony almost entirely on the appraisal 

obtained by the Debtor in the Second Romay State Court Litigation, as well as a 

valuation of zero or unknown value of the stations in various bankruptcy filings.

For purposes of making its decision on the value of the broadcast licenses, 

13 One of the issues in dispute in the Second Romay State Court Litigation was the decision to 

pull two of the four stations in Puerto Rico from the Auction. That issue does not relate to the 

value of the remaining stations.

14 The Plaintiff claimed that WJAN was actually owned by Caribevision at the time of the Transfer. 

However, the Court ruled in its Order Granting In Part and Denying In Part Defendant Mediaset’s 

Motion for Partial Summary Judgment as to WJAN Ownership and Adequate Capitalization (ECF 

#328) that the ownership of WJAN was not transferred to Caribevision, and that, at the time of 

the Transfer, WJAN was owned by America CVSG.

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the Court will focus primarily on the testimony of Dr. Furchtgott-Roth and of Ms. 

Ross, both of whom the Court ruled are experts qualified to provide expert 

testimony on the value of the broadcast licenses. Each of them has a very different 

methodology on how to value the licenses. The Court found issues with the 

methodology of both experts. However, rather than disregard all testimony, the 

Court, as more fully detailed below, has chosen to reach valuation based on Ms. 

Ross’ valuation as modified by Dr. Furchtgott-Roth’s methodology.

Dr. Furchtgott-Roth has an impressive history with broadcast licenses, even 

serving, at one point in his career, as a Commissioner of the Federal 

Communications Commission (the “FCC”). Prior to that Dr. Furchtgott-Roth was 

a significant contributor to the drafting of the Telecommunications Act of 1996. 

Dr. Furchtgott-Roth has, over a period of more than twenty years, advised at least 

a dozen companies on the value of FCC licenses.

Ms. Ross is the Vice President of Media Valuations at BIA Advisory Services, 

LLC and has been with that company for more than 35 years. Her specialty, as 

an Accredited Senior Appraiser in Business Valuation, is in appraising 

broadcasting and media properties. Ms. Ross testified that she had “been retained 

to perform valuations of thousands of broadcasting properties and companies.”

Dr. Furchtgott-Roth testified that FCC licenses are, with one exception, 

always valued in connection with the broadcast station to which the license is 

attached. The only exception is the reverse auction conducted from time to time 

by the FCC. However, according to Dr. Furchtgott-Roth, in reaching his valuation 

of the FCC licenses, he did not alter his valuation to reflect any hard assets of a 

broadcast station associated with the purchase of any FCC license, 

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notwithstanding that he acknowledged that America CVSG only held the 

broadcast licenses, not the hard assets. Dr. Furchtgott-Roth’s testimony 

regarding the value of WJAN was based on the price paid at the FCC Auction for 

what he testified was a comparable station15, as well as a sale that took place four 

years after the Transfer Date. Dr. Furchtgott-Roth’s valuation of the two Puerto 

Rico stations was based, first, on sales of comparable stations (or their spectrum) 

at the FCC Auction, and then on “price per population” figures and values that he 

took from the Hoffman Schutz Media Capital appraisal that had been 

commissioned by Romay in the Second Romay State Court Litigation, as well as 

an appraisal prepared in the same litigation by a company called SNL Kagan

Consulting. Dr. Furchtgott-Roth testified that he valued the two Puerto Rico 

stations separately, although he recognized the stations were subject to a channel 

sharing agreement and, he accordingly, discounted the value included in the 

Hoffman Schutz appraisal of one of the stations by 50%. Dr. Furchtgott-Roth 

testified that the two appraisals used the comparable sales approach, which, he 

testified, “is the standard method of valuing FCC licenses.” However, Dr. 

Furchtgott-Roth centered his valuation on a sale of the licenses untethered from 

any broadcast station, which, he testified, can only occur in connection with an 

FCC reverse auction. After applying his methodology, Dr. Furchtgott-Roth testified 

that as of the Transfer Date the estimated value of the WJAN license was in a 

range of $3.15 to $3.994 million, and, based almost entirely on the two prior 

appraisals, that the estimated value of the two Puerto Rico stations was in the 

15 Dr. Furchtgott-Roth testified he did not know for sure whether the population served for this 

comparable was similar to that of WJAN, just that the broadcast areas seemed similar based on

FCC coverage charts.

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range of $5.627 million to $6.305 million. 

While Ms. Ross used the comparable sales approach as well, she used a 

completely different methodology in challenging Dr. Furchtgott-Roth’s valuations. 

Using the comparable sales approach, Ms. Ross testified, she valued the station 

with the license using the “price per population” or “price per pop” using 

comparable transactions to the extent available, and then using that formula, and 

the population figures for the service area for the stations using the Debtor’s 

licenses, came to a valuation, from which, then, Ms. Ross deducted costs of 

“building” the station (not including land and building, which she assumed would 

be leased) as if the station were being built brand new. In determining comparable 

sales, Ms. Ross did not use any transactions that took place after the Transfer 

Date. For her valuation of WJAN, Ms. Ross’ comparable transactions were from 

2014 and 2015, discounted for decreases in value of FCC licenses after the FCC 

Auction.

16 Based on Ms. Ross’ application of her methodology, she testified the 

value of the WJAN station as of the Transfer Date was $2,063,000.00, reduced by 

$512,000.00 in estimated costs associated with buying everything necessary to 

start a new station (other than land and building).

For her valuation of the Puerto Rico stations, Ms. Ross testified that the

stations had to be valued together because that was the only way service could be 

“full island,” disagreeing with Dr. Furchtgott-Roth’s testimony that the stations 

could each be sold as stand alone. Ms. Ross testified that as of the Transfer Date, 

16 Ms. Ross testified that she believes the great disparity in the pre-Auction and post-Auction 

sales were attributable to buyers buying the stations in anticipation of the FCC Auction, which 

historically generated significant profits, and a “rightsizing of value” after the FCC Auction when 

the only avenue for sale were non-FCC buyers.

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the value of the two Puerto Rico stations, using what comparables (off-island) were 

available, was $4,314,000.00, reduced by start-up and equipment costs of 

$2,422,000.00. 

Ms. Ross testified that she did not believe the values in the FCC Auction 

were reflective of fair market value since the FCC reverse spectrum auctions are 

unique, and only happen infrequently. Indeed, the FCC Auction that is the subject 

of the Second Romay State Court Litigation had been in the planning stages for 

20 years, and there is no indication when the next auction will occur. 

There were problems with both methodologies. While Dr. Furchtgott-Roth 

clearly has an impressive history with the FCC and the broadcast industry in 

general, his experience in advising companies regarding the purchase and value 

of FCC licenses and broadcast stations is very limited, as compared to Ms. Ross’ 

extensive experience in this precise area. Moreover, the Court agrees with Ms. 

Ross that in valuing the licenses, less weight should be given to the prices paid in 

the FCC Auction, since those auctions are few and far between. A better reflection 

of value should focus on the many instances that broadcast stations are bought 

and sold in the market, as opposed to a single FCC auction.17 Finally, the Court 

finds that it is not appropriate to disregard completely the value of hard assets, 

especially, where, as here, the stations and the licenses are owned by different 

entities, a fact which Dr. Furchtgott-Roth appeared to be unaware.

While the Court finds that Ms. Ross’ methodology for valuing the licenses 

was more reliable, insofar as the comparables she used, the calculation of value 

17 Ms. Ross also pointed out that, in addition to the market for broadcast stations and licenses, 

these companies have their finances audited annually, and the auditors are required to calculate 

the value of intangible versus tangible assets.

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using price per pop, and assumptions regarding the value of the two Puerto Rico 

stations together, the Court is not comfortable with the reductions that Ms. Ross 

applied. The Court accepts Ms. Ross’ testimony that, to value a license, there 

must be some adjustment for the value of tangible assets associated with the 

license. The Court notes that Ms. Ross failed to explain how she came up with the 

construction cost reductions, and those calculations were barely challenged on 

cross-examination. Moreover, there was no testimony to counter Ms. Ross’ 

calculation of start-up costs. However Ms. Ross never explained why it would be 

appropriate to use “new station” valuations, when she acknowledged that all three 

stations had been around and operating for quite some time. The Court cannot 

accept, without some explanation, which was not provided, that it is appropriate 

to reduce the value of the stations by a hypothetical value that has no relationship 

to the reality of the licenses being valued – the opposite problem with Dr. 

Furchtgott-Roth’s valuation, that ignored hard assets completely.

The Court has two choices. One is to completely disregard both experts and 

assume the licenses have no value (or require another expert), or the Court can 

adjust Ms. Ross’ testimony using only objective simple adjustments. The Court 

finds it appropriate to use Ms. Ross’ valuation without reducing the value of the 

stations by the construction costs, which is the approach Dr. Furchtgott-Roth 

advocated for in any case. Based on this adjustment, the Court finds as of the 

Transfer Date the value of WJAN was $2,063,000.00 and the value of the Puerto 

Rico stations was $4,314,000.00.

2. Valuation of the Contingent Liability

The last issue of contention related to balance sheet insolvency is how the 

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contingent liability of the Second Romay State Court Litigation (the “Romay 

Contingency”) should have been valued. While both sides agree that the Romay 

Contingency was, in fact, a contingent liability at the time of the Transfer, the 

two experts had widely different views on its value at that time. The expert for 

the Plaintiff, Mr. Kapila, testified that the Romay Contingency should be valued 

at $9,320,609.00, which is the highest range of the amount set forth in an April 

2019 non-final order entered by the state court a year after the Transfer. The 

expert for Mediaset, Mr. Feltman, testified that the Romay Contingency should 

be valued at a range between $3.15 million and $4.05 million.

The Eleventh Circuit has set out a framework pursuant to which a 

contingent liability is to be valued in determining a debtor’s insolvency.

Advanced Telecomm., 490 F.3d at 1335. The Court is required to estimate “the 

expected value of a judgment against [the debtor]” and then multiply “that value 

by the chance that [the debtor] would face such a judgment . . . .” Id. That is, the 

Court must “calculate the present value of the liability – the expected cost of the 

liability times the estimated chance of it ever occurring.” Id.; see also In re The 

Heritage Organization, L.L.C., 375 B.R. 230, 284 (Bankr. N.D. Tex. 2007) (stating 

that the “[C]ourt should multiply the face amount of the asset or liability times 

the probability that the contingency will occur”); In re Xonics Photochemical, Inc., 

841 F.2d 198, 200 (7th Cir. 1988) (“To value the contingent liability it is 

necessary to discount it by the probability that the contingency will occur and 

the liability will become real.”). 

It is well established that “a contingent liability cannot be valued at its 

potential face amount . . . .” Nordberg v. Arab Banking Corp. (In re Chase &

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Sanborn Corp.), 904 F.2d 588, 594 (11th Cir. 1990); see also Oakes v. Spalding 

(In re Oakes), 7 F.3d 234 at *3 (6th Cir. 1993); Xonics, 841 F.2d at 200 

(contingent liabilities not valued at face amounts, even if no uncertainty about 

what firm will owe if the contingency materializes). If an expert treats contingent 

liabilities as certainties, his expert opinion will be invalidated. Baldi v. Samuel 

Son & Co., Ltd., 548 F.3d 579, 582 (7th Cir. 2008); see also Bachrach Clothing, 

Inc. v. Bachrach (In re Bachrach Clothing, Inc.), 480 B.R. 820, 862 (Bankr. N.D. 

Ill. 2012) (failure to discount contingent liability discredits expert’s valuation).

Moreover, the contingent liability must be valued as of the time of the Transfer, 

based on information available at that time, and not by using improper 

hindsight. See Paloian v. LaSalle Bank, N.A., 619 F.3d 688, 693 (7th Cir. 2010) 

(“Hindsight is wonderfully clear, but. . . . Hindsight bias is to be fought rather 

than embraced.”). 

Thus, the Court must review the expert testimony through the lens 

dictated by the Eleventh Circuit. At the time of the Transfer, the Second Romay

State Court Litigation had been pending about five months. Procedurally, the 

Caribevision Defendants had filed an answer, along with affirmative defenses 

and counterclaims. The issues raised by these pleadings were substantial, and 

the counterclaims significant. As of the Transfer Date, the Romay Parties’ motion 

to dismiss the counterclaims (which included claims for breach of contract, 

negligent representation, and intentional misrepresentation) had been rejected 

by the state trial court and those counterclaims remained pending. The Romay 

Parties had filed their answer to the counterclaims; the defenses pending as of 

the Transfer Date included equitable estoppel, laches, failure to mitigate, waiver, 

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use of best efforts, and the business judgment rule, all relating to the Auction 

and withdrawal from the Auction of the Puerto Rico stations, as well as 

frustration of purpose as to the CSA. As of the Transfer Date, there remained 

substantial judicial and legal labor required before any trial and final 

determination of the Second Romay State Court Litigation. 

During the Second Romay State Court Litigation, and throughout the time 

when the Second Romay State Court Litigation complaint was filed and the date 

of Transfer, management of the Broadcast Businesses, and their shareholders, 

held extensive discussions about the value of the Second Romay State Court 

Litigation. Marcell Felipe wrote many memos analyzing the possible ranges of 

recovery, from a likely low of about $3 million to a possible high number of 

around $9 million. On January 29, 2018, three months before the Transfer Date, 

Omar Ortega (the Caribevision Defendants’ outside litigation attorney) provided 

the Caribevision Defendants with an initial evaluation of the Second Romay State 

Court Litigation. Mr. Ortega identified several issues with Romay’s claims and 

alleged damages and expressed confidence in a number of the Caribevision 

Defendants’ defenses. Mr. Ortega continued to believe that the Caribevision 

Defendants had a “strong position”. Mr. Ortega’s assessment was that the claim, 

if pursued through trial and properly amended, would have a likely value in the 

range of $300,000.00 to $9.92 million. He opined that, even if successful, the 

Romay Parties’ claims should not exceed $4.3 million. Mr. Ortega did not believe 

there was any theory of damages under which the Romay Parties could recover 

$21 million, the amount demanded in the Second Romay State Court Litigation

complaint. The evidence shows that around the time of the Transfer, reasonable 

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settlement ranges for the Second Romay State Court Litigation were between $4 

to $6 million, and between $3 to $5 million. Mr. Felipe’s January 1, 2018 

assessment concluded that the case could settle between $5 to $6 million. As of 

the Transfer Date, the Debtor and Affiliated Debtors were aggressively litigating 

the case, and no decision had been made about the correct interpretation of the 

CSA. There was no pending motion that would indicate a decision against the 

Caribevision Defendants was imminent and the comments from the state court 

seemed to indicate the court favored the Caribevision Defendants’ interpretation. 

The range of values is consistent with other evidence, including the 

amounts referenced in various emails between and among Mr. Braun, Mr. Calles, 

and individuals associated with Pegaso in October 2017 ($4 million settlement), 

February 2018 ($4 million settlement) and May 2018 ($2.7 million reserve plus 

payment of one Puerto Rico station). There was evidence that Romay’s 

representatives (Granda and Cainzos) gave the impression that Romay would 

settle in the range of $3 to $5 million or $4 to $6 million. See Advanced 

Telecomm., 490 F.3d at 1339 (Trager, J., concurring) (proffered settlement is best 

evidence for what liability was worth); Polis v. Getaways, Inc. (In re Polis), 217 

F.3d 899, 903 (7th Cir. 2000) (refused settlement normally good evidence of 

minimum fair value).18

Mr. Kapila testified that he did not consult with counsel, did not review 

the state court docket, and is not familiar with the status of the litigation at the 

18 While not liquidated at the time, all parties recognized that the Second Romay State Court 

Litigation complaint did not include, but the Romay Parties were entitled to assert some interest 

in, the value of the two unsold Puerto Rico stations. However, there was no testimony at Trial 

about including that potential value in any insolvency analysis as of the date of the Transfer.

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time of the Transfer. Rather, using the $21 million demanded in the Second 

Romay State Court Litigation complaint as a starting point, and based on 

communications and internal analysis of insiders, as well as the legal analysis 

of outside counsel, Mr. Kapila determined that the high range of the state court’s 

April 2019 non-final order was an appropriate reflection of the value of the 

Romay Contingency on the Transfer Date. Conversely, Mr. Feltman testified that 

in addition to reviewing the same communications, internal analysis of insiders, 

as well as the legal analysis of outside counsel, he also reviewed the entire state 

court docket at the time of the Transfer.

The Court considered the expert opinions and methodology of both experts 

and finds that only Mr. Feltman applied the appropriate framework to value the 

Romay Contingency. Mr. Feltman testified as to his substantial experience as a 

financial advisor to debtors and fiduciaries settling litigation claims and the 

correct formula for settling or valuing such claims by considering the likelihood 

of success, the range of damages, the costs of litigation, the time value of money 

and the existence of other obligors and defense parties. Mr. Feltman also 

considered all the evidence presented from his review of the state court docket 

and the internal correspondence, and outside legal advice, and, based on all

those factors, quantified the likelihood of success for the Romay Contingency, as 

of the Transfer Date, at approximately 35% to 45%, and applied that factor to a 

reasonable total damages value of $9 million. This analysis resulted in a value 

range of approximately $3.15 million to $4.05 million, and a conclusion (for 

purposes of the balance sheet test) that the Romay Contingency should be valued 

at $3,600,000.00. This methodology is consistent with the formula set forth in 

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Advanced Telecommunication. The Court concludes that this value is 

appropriate, for purposes of valuing the Second Romay State Court Litigation 

claim, as of the Transfer Date, in the context of the balance sheet test. 

Conversely, Mr. Kapila, although also an experienced bankruptcy trustee, 

did not use the methodology prescribed by Advanced Telecomm., 490 F.3d at 

1335, but rather assumed a 100% likelihood of success as of the Transfer Date

based, in part, on the non-final order that was ultimately entered in April 2019, 

with an amount of $9.3 million, as well as the agreed final judgment of June 

2020 (based on the Romay Settlement reached in the bankruptcy case). Mr. 

Kapila did not consider the possibility of a trial at the time of the Transfer, the 

remaining affirmative defenses, the counterclaims, and the risks of appeal. In 

addition, Mr. Kapila did not provide any explanation why, in the face of a 

complete disregard by all insiders and outside litigation counsel of the 

$21,000,000.00 figure, he, nonetheless, used the $21,000,000.00 as a starting 

point. See Chase & Sanborn, 904 F.2d at 594 (contingent liability cannot be 

valued at potential face amount). Thus, Mr. Kapila applied his discount without 

factoring in the status of the litigation at the time of the Transfer, and using an 

improper initial figure.

Further, placing significant reliance on a non-final order entered one year 

after the Transfer Date, or upon an agreed final judgment entered more than two 

years after the Transfer Date, is improperly applying hindsight. See Paloian, 619 

F.3d at 693. A non-final order, only entered after more than a year of hardfought litigation, is not an appropriate indicator of value and is not proper 

evidence of the value of the contingent liability as of a date nearly one year prior 

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to the order. Moreover, a negotiated final judgment, entered two years after the 

Transfer Date, as part of the Romay Settlement focused on preserving an alleged 

fraudulent conveyance action arising from the Transfer, bears no weight 

whatsoever. 

A contested lawsuit, in its early stages, should be more heavily discounted. 

The case of Grigsby v. Carmell (In re Apex Automotive Warehouse, L.P.), 238 B.R. 

758 , 771–72 (Bankr. N.D. Ill. 1999) is instructive. Apex Automotive involved the 

valuation of a lawsuit as a contingent asset. Id. There, the defendant was 

contesting a fraudulent transfer claim by arguing the debtor was solvent because 

the debtor’s lawsuit against a third party should be valued as a $12 million asset. 

The trustee, arguing that the debtor was insolvent, asserted that the contingent 

asset should be valued at only $2.7 million. The trustee presented evidence that 

“the lawsuit was only a few weeks old” and “the claims were contested.” Id. at 

772. The lawsuit in Apex Automotive also involved a crossclaim. Id. There was 

evidence of a $3 million dollar settlement offer and the trustee’s expert testified 

to a present value of $2.7 million. Id. The court noted that, on the applicable 

valuation date, the debtors had no certainty that they would win the suit or how 

much they could recover. Id. Because the defendant did not offer any credible 

evidence of the present value of the litigation, the court ruled in favor of the 

trustee. Id.

Just as in Apex Automotive, the Second Romay State Court Litigation was 

at its very early stages and the claims were highly contested. The counterclaims 

against the Romay Parties also increased the likelihood that the Romay Parties

would not prevail. Indeed, Mr. Ortega testified that he believed, right up to the 

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April 2019 order, that his valuation would prevail.

The Court finds that Mr. Feltman’s expert opinion is the more persuasive, 

and the only opinion that complies with the Eleventh Circuit criteria set forth in 

Advanced Telecommunication. Therefore, the Court holds that the appropriate 

value of the Romay Contingency on the Transfer Date was $3,600,000.00.

Based on the foregoing, the Court concludes that as of the Transfer Date, 

the total value of America CVSG’s assets at issue in this case (the broadcast

licenses and Pegaso “loan”) was at least $6,377,000.00 and the total value of 

liabilities at issue (the Romay Contingency) was $3,600,000.00.

19 The parties 

agree that as of the Transfer Date, America CVSG also had $2.9 million in cash. 

Therefore, America CVSG was solvent with assets exceeding liabilities by at least 

$5.7 million as of the Transfer Date.

20

C. America CVSG was not left with unreasonably small capital after 

the Transfer.

The Plaintiff argues that at the time of the Transfer, America CVSG was 

engaged in a business or transaction for which it was left with unreasonably 

small capital pursuant to section 548(a)(1)(B)(i)(II). 

Whether a transfer or obligation leaves a debtor undercapitalized is 

a question of fact to be determined on a case-by-case basis. Smith v.

Litchford & Christopher, P.A. (In re Bay Vista of Va., Inc.), 428 B.R. 

197, 225-26 (Bankr. E.D. Va. 2010). Unreasonably small capital

refers to the inability to generate sufficient profits to sustain 

operations. Moody v. Sec. Pac. Bus. Credit, Inc., 971 F.2d 1056, 1070 

19 America CVSG had additional assets and liabilities as of the Transfer Date but the Romay 

Contingency, the broadcast licenses and the Pegaso loan value are the main drivers of value 

differences between the parties and are case determinative.

20 In arguing that America CVSG was insolvent, the Plaintiff points to various affidavits signed 

by Carlos Vasallo, Marcell Felipe, and Emilio Braun attesting to the insolvency on the Transfer 

Date of various entities, including America CVSG. The Court puts no weight whatsoever on these 

affidavits; it is clear to the Court that these affidavits, like the consent judgment, were negotiated 

documents executed in connection with the Romay Settlement. 

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(3d Cir. 1992). “Because an inability to generate enough cash flow 

to sustain operations must precede an inability to pay obligations 

as they become due, unreasonably small capital would seem to 

encompass financial difficulties short of equitable [in]solvency.” Id.

“[T]he ‘unreasonably small capital’ test of financial condition is 

‘aimed at transferees that leave the transferor technically solvent but 

doomed to fail.’ ” Kipperman v. Onex Corp., 411 B.R. 805, 836 (N.D. 

Ga. 2009) (citations omitted). In determining whether a debtor was 

left with unreasonably small assets, the Court often is called upon 

to review a debtor's historic and contemporaneous business 

activities, relevant market data, the ebb and flow of income and 

expense over time, the availability of additional capital or lines of 

credit, the prospect for new business, and a variety of inter-related 

issues that affect whether the enterprise will continue. 

Mukamal v. Nat’l Christian Charitable Found., Inc. (In re Palm Beach Fin. Partners,

L.P.), 598 B.R. 885, 890 (Bankr. S.D. Fla. 2019). 

The Court finds that America CVSG was not left with unreasonably small 

capital, but remained viable for a full year after the Transfer Date. America CVSG 

was a holding company, not an operating company. Its function was to hold the 

broadcast licenses and receive payment for their use. America CVSG had more 

than sufficient capital and cash to engage in its normal business operations. 

America CVSG had no debt owed to unaffiliated, unrelated entities. It had no 

lines of credit, no mortgage loans, and no business loans to be paid. Its normal 

“operating” expenses were minimal, and it carried sufficient cash to actually pay 

all expenses as they became due, and it did so. There was no evidence at Trial of 

any debts that were unpaid, during the year after the Transfer Date. Where a 

company, like America CVSG, survives for an extended period of time after the 

subject transaction, courts will not find that the company had unreasonably low 

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capital. See Burtch v. Opus LLC (In re Opus E. LLC), 698 Fed. Appx. 711, 715 (3d 

Cir. 2017).

D. The Plaintiff did not meet his burden of proving that America 

CVSG intended, or believed, that it would incur debts beyond its

ability to repay.

The Plaintiff argues that even if America CVSG was not actually insolvent 

or rendered insolvent as a result of the Transfer, it was equitably insolvent for 

fraudulent transfer purposes pursuant to section 548(a)(1)(B)(i)(III). Section 

548(a)(1)(B)(i)(III) requires a determination of the debtor’s subjective intent or 

belief. See WRT Creditors Liquidation Trust v. WRT Bankruptcy Litigation Master 

File Defendants (In re WRT Energy Corp)., 282 B.R. 343, 414-15 (Bankr. W.D. La. 

2001) (“Section 548(a)(1)(B)(ii)(III) ... protects future creditors from a debtor who 

transfers assets with the intent to hide them or impair the debtor's ability to pay 

debts as they arise or with the belief that inability to pay debts would likely 

result.”) (internal citation omitted).

There was no evidence of any intent or belief that America CVSG would 

incur debts beyond its ability to repay. America CVSG did not take on any new 

debt as part of the Transfer and did not purposely intend to take on new debt. 

America CVSG had no debt and no plan nor need for debt to carry on its business 

as a license holding company, as part of the overall Broadcast Businesses. The 

Plaintiff argues that America CVSG could not have reasonably believed it would 

be able to pay its debts as they matured when, at the time of the Transfer, the 

claims against America CVSG in the Second Romay State Court Litigation were

pending. However, as discussed above, the Second Romay State Court Litigation 

was highly disputed and not certain, and certainly not imminent. In fact, 

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America CVSG’s accountants specifically determined there was no need for a 

disclosure of the potential claim.

As to intent, America CVSG took a number of steps to provide for the 

repayment of potential future debts, including the Romay Contingency. Although 

there was no formal reserve in America CVSG’s books, America CVSG

established and held an informal reserve of $2.7 million in cash, for a full year 

after the Transfer Date. Those funds were not spent, and were available to pay 

or settle the Romay Contingency, if it became due. In addition, America CVSG

understood and discussed other available resources from the other Affiliated 

Debtors, to pay any claim if and when it were to become due, including direct 

and indirect assets of the other Caribevision Defendants. 

The Court concludes that while America CVSG did not receive reasonably 

equivalent value for the Transfer, because America CVSG was solvent, was not 

left with unreasonably small capital, and was not unable to pay debts as they 

became due as of the Transfer Date, the Plaintiff failed to meet his burden to 

prove by a preponderance of the evidence that the Transfer was constructively

fraudulent. 

Actual Fraud

Notwithstanding that America CVSG is solvent, the Plaintiff also argues 

that the Transfer is recoverable because he has established all the elements of 

his claim that the Transfer was made with actual fraudulent intent, that is, that 

the Transfer was made with actual intent to hinder, delay, or defraud creditors. 

It is the Plaintiff’s burden to prove, by a preponderance of the evidence,

that “the Debtor made the transfer or incurred the obligation with the actual 

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intent of hindering, delaying, or defrauding a creditor.” Whitaker v. Volvo 

Commercial Finance, LLC (In re Gulf Northern Transport, Inc.), 323 B.R. 786, 791

(Bankr. M.D. Fla. 2005). The focus is on the fraudulent intent of the Debtor, not 

the fraudulent intent of the recipient. See Silverman v. Actrade Capital, Inc. (In re 

Actrade Fin. Techs. Ltd.), 337 B.R. 791, 808 (Bankr. S.D.N.Y. 2005).

21

Because determining actual intent can be difficult, the party seeking to 

establish actual fraudulent intent can rely on badges of fraud. See Dionne v. 

Keating (In re XYZ Options, Inc.), 154 F.3d 1262, 1271 (11th Cir. 1998). The 

Eleventh Circuit’s non-exclusive list of badges of fraud include:

(1) The transfer was to an insider; 

(2) The debtor retained possession or control of the property 

transferred after the transfer; 

(3) The transfer was disclosed or concealed; 

(4) Before the transfer was made the debtor had been sued or 

threatened with suit; 

(5) The transfer was of substantially all the debtor's assets; 

(6) The debtor absconded; 

(7) The debtor removed or concealed assets; 

(8) The value of the consideration received by the debtor was 

reasonably equivalent to the value of the asset transferred; 

(9) The debtor was insolvent or became insolvent shortly after the 

transfer was made; 

(10) The transfer occurred shortly before or shortly after a 

substantial debt was incurred; and 

(11) The debtor transferred the essential assets of the business to a 

lienor who transferred the assets to an insider of the debtor. 

Id. at 1272.

The Eleventh Circuit noted that, “[a]lthough the presence of one specific 

‘badge’ will not be sufficient to establish fraudulent intent, the ‘confluence of 

21 Mr. Felipe testified that Mediaset demanded the Auction Proceeds be paid to them but that 

statement is contradicted by other evidence, and since the burden of proof is on the Plaintiff, the 

Court finds that the Plaintiff has not proven that Mediaset made any such demand.

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several can constitute conclusive evidence of an actual intent to defraud.’” Id. at 

1271 n.17 (internal citations omitted).

Acknowledging that there is no direct proof of actual fraudulent intent, the 

Plaintiff points to several badges of fraud, only two of which give the Court pause 

– a WhatsApp conversation that took place on April 4, 2018 between Marcell 

Felipe and Fernando Calles, and testimony regarding discussions about using 

the America CVSG money to pay Grupo Colte’s obligation to Mediaset that 

occurred about three weeks later, at the time of the Transfer. 

On April 4, 2018, Mr. Felipe and Mr. Calles had an extensive WhatsApp 

discussion about how to protect the assets of, it appears, America CVSG from 

any creditors who, based on the WhatsApp conversation, would be seeking to 

collect a judgment.22 In a lengthy exchange, Mr. Felipe explains how the transfer 

of funds, which would be used to purchase the assets of America-CV Network, 

would be “asset protection” and “we get protection against creditors in general”.

23 

This discussion clearly contemplates that the funds invested in America-CV 

Network could then be used by America-CV Network to send to Pegaso for the 

purchase of the Mediaset Shares. When Mr. Calles questioned the proposed 

structure - “if an act similar to the one you point out is done, it would be 

considered what is called an Act in Creditor Fraud, since it is an act that places 

you in insolvency”, Mr. Felipe responded “In this case, the fraudulent conveyance 

22 Most of the conversation appears to focus on how the equity in Caribevision would be 

reallocated once Grupo Colte bought out Mediaset’s interest in Pegaso. The actual phrase “collect 

a judgment” is not used but it is clear from the conversation that is the nature of the concerns 

about transferring cash out of America CVSG by using the cash to invest in an affiliate –

apparently America-CV Network.

23 The evidence at Trial, primarily through the testimony of Jorge Salas, is that America CVSG 

was not an operating company, although it did have vendors.

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doesn’t apply because you will not become insolvent. You have an asset that is 

the ownership percentage in the LLC.” 

Of course, ultimately there was no “purchase” or “investment” by America 

CVSG in America-CV Network. Mr. Salas testified that Mr. Vasallo instructed 

him to wire the funds from America CVSG to Mediaset, and he did so. Mr. Salas 

testified that Mr. Vasallo told Mr. Salas it was a loan and so that is how it was 

listed. However, Mr. Salas also acknowledged an email from the accountant for 

the Broadcast Businesses, Mr. Pastor, in which Mr. Pastor advised that, for tax 

purposes, his tax department advised that the $10,000,000.00 should be treated 

as a loan to Pegaso from Caribevision rather than a dividend, because any 

dividend would require a distribution to the Romay Parties as well (since at the 

time the Romay Parties still held interests in America CVSG). Mr. Felipe testified 

at Trial that the booking of the Transfer as a loan was used as a placeholder 

while negotiations between the shareholders of Caribevision on how to allocate 

their interests were ongoing.

Although after the Transfer America CVSG continued in its business until 

the bankruptcy cases were filed, Mr. Felipe acknowledged that once the Transfer 

occurred, America CVSG did not have enough money to pay the Romay Parties 

a $5 million settlement. Mr. Felipe also acknowledged that after the Transfer it 

would have been harder for the Romay Parties to collect any judgment if they 

prevailed in the Second Romay State Court Litigation.

Mediaset argues that the evidence at Trial makes clear that America CVSG 

and its agents believed that there were sufficient assets to pay the Romay 

Contingency (at least in the amount they estimated was at risk) after the 

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Transfer, including approximately $2.9 million in cash, the value of the Puerto 

Rico stations (albeit subject to the acknowledged claims to the latter by the 

Romay Parties), as well as the assets of other defendants in the Second Romay 

State Court Litigation.

24 Indeed, when questioned about the WhatsApp 

conversation and in connection with his question in that conversation about a 

fraudulent transfer, Mr. Calles testified “to be a fraudulent transfer is when you 

become insolvent, and here clearly the company was not insolvent, in the sense 

that it had the licenses, the building, equipment, et cetera, et cetera, et cetera, 

all of those assets right there. So just because of that reason the company had 

value. . . So none of these transactions, even if you take out all of the, all of the

money or cash, which was not taken out of it, but if you take out the cash of the 

company, you still had in the company all of these other assets, which had a lot 

of value.”

Mediaset also argues that there is no evidence that the Transfer was made 

for the purpose of making it more difficult for the Romay Parties to collect any 

ultimate judgment they might obtain, even though that might be the effect. But 

Mr. Felipe’s statement in the WhatsApp conversation directly contradicts that 

argument; there is no question that Mr. Felipe recognized, and shared with Mr. 

Calles, that transferring the cash in America CVSG into another type of tangible 

asset would make it more difficult to collect by a creditor.25

24 As the Court has previously stated, the Court does not put any weight on the affidavits 

regarding insolvency prepared in connection with the Romay Settlement of the Romay Claim in 

the bankruptcy cases.

25 Since, as the Court already found, America CVSG was paying what minor expenses it had as 

a holding company when and as those obligations became due, presumably the creditors about 

which Mr. Felipe was most concerned were the Romay Parties.

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In reviewing the totality of the circumstances surrounding the Transfer, 

including consideration of the non-exclusive list of the badges of fraud outlined 

by the Eleventh Circuit in XYZ Options, the Court finds that the Plaintiff has not 

satisfied his burden of proof to demonstrate there was an actual intent to defraud 

creditors at the time of the Transfer. 

There is no question that at the time of the Transfer America CVSG had 

been threatened with a lawsuit, indeed, it (along with other defendants) had 

already been sued and the Second Romay State Court Litigation was pending. 

There is also no question that, while Mediaset’s sale of its Shares in Pegaso predated the Transfer, the Transfer was being considered in connection with that 

sale. Finally, there is no question that the intent of the Transfer was to make it 

harder for creditors to collect any judgment against America CVSG. However, 

there is also no question that the Transfer was not the only source of payment 

for any potential judgment that the Romay Parties might obtain in the Second 

Romay State Court Litigation, at least in the amount that the Caribevision 

Defendants estimated at that time. The Second Romay State Court Litigation, 

as well as the Romay Claim filed by the Romay Parties in the bankruptcy cases, 

asserted claims, jointly and severally, against America CVSG and two of the 

Affiliated Debtors – Caribevision and Caribevision Network. If the Romay Parties 

were ultimately successful, the assets of all the Caribevision Defendants would 

be subject to execution to satisfy any successful claim against the Caribevision 

Defendants. Those assets included equity of $4 to $5 million in the real estate 

and headquarters building held by Orly, which was wholly owned by Caribevision 

Network, the ongoing Broadcast Businesses and broadcast equipment, the 

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studios, and the FCC licenses. While the assets of these defendants might have 

been more difficult to liquidate, the nature of those assets was unchanged up 

through the time of the bankruptcy filings.

While the Court has already found that America CVSG did not receive 

reasonably equivalent value for the Transfer, the Court has also determined 

America CVSG was solvent at the time of the Transfer, that America CVSG did 

not become insolvent shortly after the Transfer was made, and that the Transfer 

did not leave America CVSG with unreasonably small capital to pay its 

obligations. The Transfer was not a transfer of substantially all of America 

CVSG’s assets – it still owned five broadcast stations at the time of the Transfer, 

the values of which have already been addressed in this opinion, and held $2.9 

million in cash. Moreover, the Court finds that the Transfer was not to an insider 

of America CVSG. The Bankruptcy Code defines “insider” in 11 U.S.C. §101(31), 

and Mediaset does not meet that description. 

The other “badges” on which the Plaintiff relies all occurred at or near the 

time of the bankruptcy petitions being filed, a time in which all potential 

fraudulent transfers are being considered. Regardless of this Court’s ruling, 

there is no question that the Transfer is one that the Debtor’s and Affiliated 

Debtors’ attorneys would have looked at at the time of filing. Moreover, the 

evidence (letters, billing entries, and emails) is, at best, ambiguous with respect 

to whether the Transfer was the focus of the discussions or emails, or was just 

one of several possible sources of Chapter V recoveries considered with counsel.

The evidence does not support a finding of actual intent to hinder, delay 

or defraud a creditor. The only “badge” of fraud this Court finds to be present is

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that the movement of cash out of America CVSG, however it was accomplished, 

was being considered as a way to make collection of any debt of America CVSG 

more challenging. But the presence of that one “badge” does not satisfy the 

Eleventh Circuit test for finding actual intent. Accordingly, Plaintiff did not meet 

his burden of demonstrating the Transfer was actually fraudulent by a 

preponderance of the evidence. 

Recovery of Transfer

Because the Plaintiff has failed to show that the Transfer was avoidable, 

the Plaintiff cannot recover the Transfer from Mediaset under section 550.

CONCLUSION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

ORDERED and ADJUDGED as follows:

1. Defendant Mediaset is entitled to judgment in its favor as to all three 

counts of the Adversary Complaint (ECF #1). 

2. Defendant’s counsel shall upload for entry a separate final judgment 

consistent with this memorandum opinion pursuant to Rule 9021 of the Federal 

Rules of Bankruptcy Procedure.

3. The Court reserves jurisdiction to consider an application for 

attorneys’ fees and costs, if any.

###

Copies to:

Patricia A. Redmond, Esq. 

Monique D. Hayes, Esq. 

Attorney Redmond is directed to serve a copy of this Order on interested parties 

who do not receive service by CM/ECF, and file a proof of such service within two (2) 

business days from entry of the Order.

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