Hellas Liquidators Say TPG, Apax Left Company Insolvent

Hellas Telecommunications (Luxembourg) II SCA’s liquidators sued TPG Capital Management LP and Apax Partners LLP for more than $1.3 billion, saying the private-equity firms left the wireless company insolvent.

The suit seeks “redress for one of the very worst abuses of the private equity industry,” Andrew Hosking and Simon Bonney, the liquidators, said in a complaint filed today in U.S. Bankruptcy Court in Manhattan, where the company sought protection from creditors in February 2012.

Hellas was one of Greece’s first two wireless operators. Apax and TPG in 2005 acquired the company, then called TIM Hellas, from Telecom Italia SpA for about 1.6 billion euros ($2.2 billion), London-based Apax’s first investment in Greece.

The liquidators said the firms used Hellas “to carry out the highly leveraged acquisition of a pair of Greek businesses” and caused the company to borrow more than 1 billion euros in additional funds that were “immediately siphoned out of the company without consideration.”

Less than two months later, TPG and Apax disposed of Hellas and its affiliates, “pocketing a windfall and leaving behind an insolvent company staggering towards bankruptcy,” according to the filing.

“The lawsuit is totally without merit,” Owen Blicksilver, a spokesman for TPG, said in an e-mail.

‘Ill-Founded Claims’

Sarah Rajani, Apax’s director of communications, called the lawsuit “a rehash of the ill-founded claims filed in prior cases going back to 2011.”

“Apax and TPG sold Hellas to a third party for 3.4 billion euros at virtually the same time the plaintiffs claim that Hellas was insolvent,” she said in an e-mailed statement. “It was not until approximately three years later that the Hellas notes went into default.”

Apax, led by Andrew Sillitoe and Mitch Truwit, oversees more than $40 billion. The private-equity firm owns stakes in retailers Rue21 Inc. and Cole Haan Inc., among other companies in the consumer, health-care and technology industries.

TPG, based in Fort Worth, Texas, has more than $59 billion in assets under management. Founded by David Bonderman and Jim Coulter, the firm’s most recent buyout funds were raised in 2006 and 2008 and have struggled with investments including Energy Future Holdings Corp., the Texas utility that’s preparing for bankruptcy.

The case is Hosking v. TPG Capital Management LP, 14-01848, U.S. Bankruptcy Court, Southern District of New York (Manhattan) The bankruptcy is In re Hellas Telecommunications Luxembourg II SCA, 12-10631, in the same court.

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