Treatt PLC Update on Earthoil earn-out dispute (5281E)
July 19 2016 - 1:00AM
UK Regulatory
TIDMTET
RNS Number : 5281E
Treatt PLC
19 July 2016
19 July 2016
TREATT PLC
("Treatt" or "the Company")
Update on Earthoil Earn-out Dispute
It was announced on 6 December 2012 that the sellers of the
Earthoil Group ('Sellers'), which was acquired by Treatt in April
2008, had filed a claim against the Company in the Chancery
Division of the High Court. The claim relates to various matters in
respect of the Earn-out, being the deferred consideration payable
to the Sellers in respect of the acquisition of the Earthoil
Group.
Following rulings by the High Court and Court of Appeal on
issues of contractual interpretation, it was announced on 11
February 2015 that the matter was being referred to Expert
Determination for resolution of the substantive claim, being the
quantum of the Earn-out.
That Expert Determination process has now concluded and the
value of the Earn-out has been put at GBP970,648. Whilst we are
pleased that the expert has awarded significantly less than the
Sellers claimed, having taken legal and professional advice
throughout, including Counsel's opinion, the Board is extremely
disappointed with this outcome. The Earn-out is subject to
deductions of GBP250,000 in respect of a cash advance made on
completion of the purchase in April 2008 and GBP318,000 in respect
of a settled claim under the warranties provided by the Sellers in
April 2008.
It was also determined that a contribution of GBP11,730 be made
towards the Sellers' fees for the Expert Determination process,
which are to be split 45%:55% in their favour. This leaves a
balancing payment of GBP414,378 due, which will be made to the
Sellers in due course.
Whilst this resolves the majority of the claim issued by the
Sellers, there remain some outstanding issues, which are to be
determined by the Court. The Sellers outstanding claims, the value
of which is GBP693,888, relate to alleged breaches of contract,
which are strenuously denied. Consequently, final resolution of
this matter and judgment in respect of the costs of this
litigation, is unlikely to be before 2017.
Speaking today Daemmon Reeve, CEO said "This outcome is
extremely disappointing. We have received consistent legal advice
throughout this process in respect of our position. Nonetheless,
this issue has been hanging over the company for some years and
this is a significant step to putting this matter behind us and
moving on."
Earthoil was acquired in 2008 and is now a business of
appreciating value. Profits have grown consistently from a
loss-making position in 2008 to a pre-tax profit of almost GBP1m in
the year to September 2015.
Contact details
Anita Steer
Company Secretary
++ 44 1284 770028
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCDVLFFQDFEBBZ
(END) Dow Jones Newswires
July 19, 2016 02:00 ET (06:00 GMT)
Treatt (LSE:TET)
Historical Stock Chart
From Apr 2024 to May 2024
Treatt (LSE:TET)
Historical Stock Chart
From May 2023 to May 2024