That is not to say that the whole idea of Inbursa being a lender isn’t a cause Televisa to stop and wonder but it is hardly the immediate catastrophe Televisa suggests.

Apart from the first call to Philips, JPM’s dialogue with Televisa seems to be well documented and it is not at all clear that Televisa was in a panic about confidential information. They were clearly aware of the dialogue with Inbursa and curiously seem to have been negotiating directly with Inbursa themselves. And Salvi Foch also thought the loan was an attractive buy.

Interestingly no one, including you, has commented on the 22% stake in Cablevision that Inbursa holds. First, what information and board representation do they already get because of that? Second if the deeply discounted loan was attractive to Televisa as majority owner, why would it not be to Inbursa? Apart from their own ownership stake, Inbursa would have benefited from the implicit support of Televisa (Televisa probably has cross defaults and accelerations in it loan and bond agreements tied to its subs).

Inbursa is well known for making large, aggressive credit plays in situations where it can arbitrage the international bank practices vs its own strong credit views and more flexible credit allocation practice. In this case they could get a local big name credit cheap because capital restrictions made foreign banks less able to invest in asset plays rather than relationship lending. Also many banks cant hold that kind of large bilateral term loan; their internal rules require syndication. So JPM probably had to firesale the loan and Inbursa saw a deal yielding much more than other Cablebision and Televisa debt.

Separately, amending a standard participation agreement is not prima facie grounds for assuming skulduggery. Most large financial outfits have standard templates for contracts which then get negotiated; some things cannot be changed and others can. No surprise Inbursa wanted to get as many lender rights as it could, and that JPM stuck on the items which would break the loan agreement.

Hard to be sure until both sides get to argue fully in court but there is at least a case here that Televisa reacted only when it lost out to Inbursa, or when someone very senior above Foch learnt about this and had a cow about the Slim link. Either way it would seem that you have taken the easy approach of taking the fashionable bank attack route rather than dig a bit and look at the possibility that there is a more cpmplex but equally juicy story which might still trip up some people at JPM but also at Televisa.

P.S. Your dismissal of the JPM document as “narrowly legalistic” is hyperbole. What else would it be? JPM is making a legal case, not writing an article. And it is pretty standard for this type of submission just as Rakoff’s admittedly racy ruling is standard. There is a lot of information that you simply ignore which is pretty sloppy because it raises lots of unanswered questions which would have made your article more interesting.

“Since JPMorgan moved for summary judgment pursuant to Fed. R. Civ. P. 56, they, like Televisa, were entitled to submit affidavits in support of their position, and it appears they submitted declarations from “Sheldon L. Pollock” and “Jaquelina Truzzell.” Both declarations have been unsealed by Judge Rakoff’s order, but neither is on the docket.

I doubt the declarations say much; JPMorgan’s memorandum of law primarily references the Pollock and Truzzell declarations when discussing side matters, like telephone calls and Televisa’s motives for opposing the assignment / participation. Truzzell apparently affirms there are “no side agreements” with Inbursa and that JPMorgan would not release “confidential” information, but that’s it. There’s nothing about how JPMorgan came to participation terms with Inbursa that, at least on their face, entitle Inbursa to a treasure trove of information about Televisa, far more than provided by JPMorgan’s standard participation agreement.

Which I find telling. Though the standard response of most defendants is — for tactical reasons like avoiding getting pinned down to a particular version of events — to “deny and delay” rather than to come forth with an affirmative opposition, under the facts here, JPMorgan really needed to make a better showing. …

Such silence could be, in part, an attempt by JPMorgan to protect Inbursa’s confidences, which arguably would have been appropriate. (I say “arguably” because the totality of the circumstances here — primarily Inbursa’s attempt to negotiate terms more favorable than those typically provided by a participation agreement — imply that Inbursa has waived its right to keep those discussions confidential from Televisa.) But there’s nothing on the docket reflecting an attempt to have Judge Rakoff review any pertinent materials in camera, and so there’s no reason for us to speculate that JPMorgan’s silence was a product of confidentiality.”

I’ve thought for a long time that the collapse and ‘rescue’ of Bear Stearns and WaMu pay have had more to do with rescuing JPM…..

I noticed re-reading the alphaville article about the Morgan Stanley Pinnacle Notes scam that the h/t went to ‘Felix Salmon’. How about a retrospective expose Felix? There was a second set of notes from Morgan Stanley that went bust too, recently, with an even cuter set of kids of the prospectus, wasn’t there? I remember reading a blog about it, but I couldn’t find the link.

If you ask me what Morgan Stanley did was far worse than the stuff that Goldman Sach’s has been being raked over the coals for, and yet for some incomprehensible reason they don’t seem to have received any negative publicity about the matter at all.

It makes me mad every time I think about it. They advertised it with a picture of a little kid hugging a teddy bear. If you read the advertisement, the only risk is that one of “three gold-plated sovereigns, a massive telco or one of the world’s largest sovereign wealth funds” would go bankrupt – ie, very low risk indeed. But buried in the fine print is the information that you also lose all of your money if one of the lowest tranches of a CDO goes belly up that insures THESE clients:

“MBIA. RBS. Barclays. Freddie Mac. Fannie Mae. Kaupthing. AIG. Bear Stearns. Landsbanki. HBOS. Lehman Brothers. Wachovia. XL Capital. The Republic of Iceland.”

The worst of the worst.

Here’s the links if anyone else wants to get outraged too:

http://ftalphaville.ft.com/blog/2008/11/ 17/18324/from-pinnacle-to-nadir/

http://josh.sg/2008/11/a_pig_in_a_poke.h tml

Why would Dan Jester and Ken Wilson sell out the US taxpayer to help Goldman? Besides being unpatriotic, why mar your reputations like that? Well, if most of your future earnings will rely on your Goldman relationships, it is hard to rationalize taking a hard line against them.

This kind of conduct is endemic to Wall St. It is why bank boards get horrible advice from pay consultants and executive comp lawyers. Giving away the keys to the candy store is their job so they get picked for the next assignment. Fiduciary duty to shareholders? Duty of loyalty? Hah! Quaint little concepts better left to law school exams. The show must go on!

Corporations must not be allowed to continue as citizens. And this type of behavior is exactly why. All they do is cover it up at little better when they do it state side. Even now corporate interests sell off the rights and protections of the citizenry. This is something that needs serious consideration.

2. Doesn’t Slim already have access to many of Cablevision’s secrets through his equity ownership? He may not get as much info as he would get through these ridiculous covenants, but I would think Televisa would have a hard time arguing that some things were trade secrets if Slim already had access to that info as an equityholder (albeit in the subsidiary, but the subsidiary that actually competes with Slim’s company).