Tuesday 18th September 2018
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Pyne Gould Corp is trying to litigate its way into a $22 million windfall over money it says it's owed from the 2013 sale of Perpetual Trust.
The investment company has restarted High Court proceedings against Bath Street Capital and its principal Andrew Barnes for what it claims is outstanding from the sale five years ago. Bath Street will vigorously defend the claim and file a counter-suit.
The parties were at odds over the details of potential earn-outs in the event of a listing and appeared to find some common ground in 2016 when they dropped earlier litigation. However, Pyne Gould foreshadowed a return to the courtroom in its annual earnings commentary last month when it said litigation appeared to be likely.
The company has filed proceedings in the Auckland High Court seeking damages of at least $22 million, plus interest and costs. Pyne Gould valued the receivable at $16.6 million as at June 30.
"The amount of the claim represents unpaid consideration in respect of carry rights that were vested in PGC," it said.
Bath Street denies owing Pyne Gould a fee, saying the firm's claim is inconsistent with the agreement. Its counter-claim will exceed Pyne Gould's by a significant margin, it said.
"These proceedings are nothing short of another futile attempt by PGC’s directors to shore up their accounts, and to justify historic statements made to the market which, in our view, were misleading and inaccurate," Bath Street said.
"We take this step reluctantly, as litigation is an expensive waste of time and energy, but the deliberate, repeated actions of PGC and its directors have cost Bath Street and its shareholder Andrew Barnes a significant amount of money over the past few years."
Pyne Gould sold Perpetual Trust for $11.9 million, including assumed debt. It stood to benefit from a further payout when Perpetual was listed and started valuing that potential earnout at $22 million from 2014.
Pyne Gould shares rose 6.3 percent to 34 cents on small volumes. Managing director George Kerr owns about 80 percent of the shares. The company has 1,434 shareholders, down from 2,104 in 2013 when it flagged the Perpetual sale.
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