TMM held in contempt of court

A US court ruled Mexican transport conglomerate Grupo TMM in contempt of court for its alleged violation of an October 2003 order temporarily upholding its acquisition agreement with the US' Kansas City Southern Group (KSC), the latter announced. TMM attempted to break an acquisition agreement term that stipulates neither KCS nor TMM can make transactions worth more than US$2.5mn without approval of the other party, according to the statement. "What we said [in response to TMM's move] was, 'Oh no you don't,' and went to the Delaware court and got an injunction... that said you cannot do anything that would in any way change the [acquisition agreement's] status quo," KCS spokesperson Bill Galligan told BNamericas. No one at TMM was willing to comment on the matter when contacted by BNamericas. According to the ruling that was made in Delaware state's chancery court, TMM will be held to the agreement's statutes and must pay KCS costs and attorney fees for filing the motion. The same court ruled in October last year that KCS and TMM must preserve the acquisition agreement's status quo until contract disputes are resolved. TMM's shareholders - mostly managing director Jose Serrano and his family - voted overwhelmingly to reject the acquisition deal with KCS in August 2003. The April acquisition agreement would have TMM subsidiary TFM become part of a US-Mexican railroad group, to be known as Nafta Rail, which would include TFM, Tex-Mex Railroad and Kansas City's US operations. TMM was to retain a 20% stake in the merged company. The US$200mn-plus deal had already received approval from Mexico's anti-trust commission CFC and the US Justice Department before TMM shareholders derailed it. The New York-based American Arbitration Association is expected to help KCS and TMM reach a settlement by March this year, though "nobody knows" when the dispute will end, Galligan said.