19 Oct 2020 Cases

Tribunal Rules in Favor of Compass Lexecon’s Client and Dismisses $100 Million Tax Claim

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Compass Lexecon’s experts Marcelo Schoeters, Gustavo De Marco, and Alan Rozenberg successfully assisted the Republic of Guatemala (Respondent) to dismiss a tax claim over $100 million raised by IC Power Asia Development Ltd (Claimant).

The Claimant owned two power distribution companies in Guatemala (DEOCSA and DEORSA, collectively known as Energuate), acquired in January 2016 and sold in December 2017. IC Power claimed Energuate’s past and future tax savings related to the deduction of interest expenses and amortization of goodwill arising from a leveraged buy-out of Energuate performed by the previous owner in 2011. Compass Lexecon’s experts provided an opinion on characteristics of leveraged buy-out transactions, the reasonability of goodwill estimations, the tax due diligence of Claimant’s acquisition of Energuate, and its implication on the alleged damages’ assessment. The Tribunal dismissed all claims and ordered IC Power to pay for two-thirds of Respondent’s costs.

Compass Lexecon’s experts were supported by Pedro Legris and Carla Calá in the Buenos Aires office. Compass Lexecon worked with a legal team led by Eduardo Silva Romero, José Manuel García Represa, and Juan Felipe Merizalde Urdaneta of Dechert LLP.

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