Bloomberg — The owners of the Mexican funeral services chain Gayosso hijacked local courts in an “extortion attempt” to extract more money from Advent International Corp., the private equity firm said in a court filing.
Advent claims Servicios Funerarios GG SA had hired “notorious” lawyers who used close connections to Mexican officials to obtain arrest warrants for current and former Advent executives. It said fraud allegations made by Servicios Funerarios GG SA in a March 29 suit were unfounded and the private equity firm filed counterclaims seeking unspecified damages, claiming its reputation was tarnished.
“This case involves calculated extortion arising out of a plain-vanilla private equity transaction,” Advent said in the April 24 filing in Boston federal court. “Already having engaged in the flagrant abuse of the Mexican justice system, Servicios Funerarios’ complaint is just the latest step in an escalating scheme.”
Following a series of Mexican legal maneuvers since last year, Servicios Funerarios sued Advent in Boston in late March, claiming the Boston-based private equity firm fraudulently understated the cost of pre-sold funeral packages when Advent funds offloaded the Gayosso chain to it in 2021 for almost $225 million.
High-profile lawyer David Boies, who is representing Gayosso’s owners, said in a statement that Advent had not responded with any defense to the evidence of fraud and other misconduct that had been alleged in the suit.
“Advent seeks to distract attention and avoid addressing the merits by attacking the victim,” Boies said. “Advent’s allegations are as baseless as they are irrelevant. We look forward to resolving this matter in court as promptly as possible.”
Advent said in its counterclaim that Servicios Funerarios had turned to obtaining arrest warrants and an embargo on unrelated Advent assets after a civil court had rejected a bid to freeze its assets. A second Mexican court confirmed that ruling, it said. Advent called the fraud allegations “frivolous,” adding that the buyer had access to Gayosso’s books and management for 17 months.
The case is Servicios Funerarios GG SA v. Advent International Corp., 23-cv-10684, US District Court, District of Massachusetts (Boston).