TIDMTAN
RNS Number : 0454A
Tanfield Group PLC
31 January 2022
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement via a Regulatory Information Service ("RIS"), this
inside information is now considered to be in the public domain
Tanfield Group Plc
("Tanfield" or the "Company")
Snorkel Legal Proceedings Update
The Board of Tanfield (the "Board") is pleased to update the
market on its investment in Snorkel International Holdings LLC
("Snorkel"), the aerial work platform business.
Investment Background
-- Tanfield is a 49% shareholder in the equity of Snorkel
following the joint venture between the Company and Xtreme
Manufacturing LLC ("Xtreme") (the "Contemplated Transaction"), a
company owned by Don Ahern of Ahern Rentals Inc, relating to
Snorkel, in October 2013 .
-- The Snorkel investment is valued at GBP19.1m. The outcome of
the US and UK Proceedings referenced below could have an impact on
this valuation.
-- On 22 October 2019, the Company announced that it had
received a Summons and Complaint, filed in Nevada (the "US
Proceedings") by subsidiaries of Xtreme, relating to the
Contemplated Transaction.
-- On 24 October 2019, the Company announced it had become
necessary to issue and serve a claim in the English High Court
against Ward Hadaway (the "UK Proceedings"), the solicitor acting
for the Company at the time of the Contemplated Transaction, in
order to fully protect the Company's rights pending the outcome of
the US Proceedings.
-- On 26 February 2021, Ward Hadaway were granted permission to
join Foulston Siefkin LLP ("Foulston Siefkin"), Tanfield's US based
law firm who were retained in 2013 to draft the documents governed
by US law relating to the Contemplated Transaction, into the UK
Proceedings in order to bring an additional claim for contribution
or indemnity against them.
Highlights
-- Due to the ongoing deficiency in the production of documents
by Snorkel in the US Proceedings still not being fully resolved, it
has once again become necessary to delay the trial. At present, it
is expected that the trial window will not begin until August 2022
at the earliest.
-- As a result of Ward Hadaway joining Foulston Siefkin into the
UK Proceedings the Company, after taking advice, has recently
amended its own claim in the UK Proceedings to include Foulston
Siefkin as a second defendant, in order to ensure its position in
those proceedings are fully protected. This has had no impact on
the trial date for the UK Proceeding which remains set for November
2022.
US Proceedings
On 22 October 2019, the Company announced it had received a
Summons and Complaint in relation to the US Proceedings, regarding
the purported call option notice announced by the Company in
November 2018, in which Snorkel and Xtreme continued in their
attempt to take ownership of Tanfield's 49% investment in Snorkel
for nil consideration, having not paid any consideration to
Tanfield for Xtreme's acquisition of the initial 51% of the joint
venture. It is purported by Snorkel / Xtreme that no consideration
is due to Tanfield before they can compel the Company to transfer
its remaining 49% investment in Snorkel to them. The Board notes
that Snorkel / Xtreme make this claim despite declaring in various
K-1 US tax declarations that Tanfield, via its subsidiary HBWP Inc,
contributed properties with a net fair market value of around
$45.5m to Snorkel International Holdings LLC in October 2013. The
Board continues to believe that the contractual agreements require
that the preferred interest (valued at GBP19.1m) is paid prior to,
or in conjunction with, a call option notice.
On 30 March 2020, the Company announced that despite ongoing
attempts to resolve the dispute amicably, Snorkel and Xtreme filed
a motion in favour of their claims and against claims brought by
Tanfield, without a trial (the "Motion"). The Board vehemently
disagreed with the Motion and believed that it was without merit
and subsequently, on 3 April 2020, the Company announced that the
judge took the Motion under advisement and the court determined
that there appear to be genuine issues of material fact pertaining
to the contract, its terms, and its execution and therefore the
Motion brought by Snorkel and Xtreme was denied.
As announced on 26 January 2021 and 20 May 2021, the parties had
been producing documents as part of the ongoing discovery process
but despite the Board's best efforts to keep procedural matters to
the agreed timetable, there had been delays relating to the
production of documents by Snorkel / Xtreme. Despite receiving
assurances that all requested document productions would be
forthcoming, there remain deficiencies in the production of
documents. Consequently, it has recently became necessary to again
move back the trial window. At present, it is expected that the
trial window will not begin until August 2022 at the earliest.
As announced on 24 August 2021, subpoenas were issued to third
parties in an attempt to obtain some of the missing documents by
other means, which has yielded some success. The Board continue to
press for the remaining deficient document production to be fully
completed so that the parties can proceed without further delay
through the remaining stages of the proceedings. As a result, the
work to investigate historic margins, which includes ensuring all
related party transactions have taken place at an arm's length
basis, as previously reported on 24 August 2021, are ongoing.
UK Proceedings
On 24 October 2019, the Company announced that it had been
necessary to issue and serve a claim against Ward Hadaway (or "the
UK Firm") in order to fully protect the Company's rights pending
the outcome of the US Proceedings and to ensure the Company could
hold Ward Hadaway to account for its role in and/or advice in
relation to the Contemplated Transaction if necessary.
Ward Hadaway was Tanfield's appointed solicitor in 2013 at the
time of the Contemplated Transaction, a position the UK Firm held
from before the Company was listed on to the Alternative Investment
Market ("AIM") in 2000, through to it becoming apparent in 2019
that a dispute between the Company and Ward Hadaway was inevitable.
That dispute, and the subsequent UK Proceedings, was crystalised as
a result of the position taken by Ward Hadaway in opposition to a
proposed standstill agreement that would have fully protected the
Company's rights pending the outcome of the US Proceedings, without
the need for a claim to be brought against the UK Firm at that
time.
On 26 February 2021, Ward Hadaway were granted permission to
join Foulston Siefkin (the "US Firm"), Tanfield's US based law firm
who were retained in 2013 to draft the documents governed by US law
relating to the Contemplated Transaction, into the UK Proceedings
in order to bring an additional claim for contribution and/or
indemnity against them.
Foulston Siefkin was, from at least 2007, Tanfield's US lawyer
until it became apparent in 2018 that a dispute with Snorkel /
Xtreme was going to arise. Unlike Ward Hadaway, Foulston Siefkin
were amenable to agreeing a standstill agreement that fully
protected Tanfield's rights pending the outcome of the US
Proceedings, without the need for a claim to be brought against
them at the time the UK Proceedings commenced.
As the principal contracts in the Contemplated Transaction were
to be governed by the laws of the US state of Nevada, Foulston
Siefkin were retained by the Company in connection with all aspects
of the Contemplated Transaction governed by US law.
It is claimed by Ward Hadaway that, insofar as Tanfield
establish that the Circular was inaccurate, such an inaccuracy
would be the fault of Foulston Siefkin as the firm responsible for
drafting the principal transaction documents and for not ensuring
that the Circular contained an accurate description of those
documents. Also, insofar as Tanfield establish that the terms of
the principal transaction documents did not mirror the instructions
provided by Tanfield, in respect of the intended terms of those
documents, that as the party responsible for taking instructions
from the Company, any fault would be that of Foulston Siefkin.
Furthermore, it is claimed by Ward Hadaway that it was the duty of
Foulston Siefkin, and not Ward Hadaway, to provide adequate advice
to Tanfield in order to ensure that the Company, its shareholders
and its Board were fully informed and understood what the terms of
the Contemplated Transaction were.
As a result of Ward Hadaway joining Foulston Siefkin into the UK
Proceedings, after taking advice, the Company has recently amended
its claim in the UK Proceedings to include Foulston Siefkin as a
second defendant, in order to ensure its position in those
proceedings are fully protected. This has had no impact on the
trial date for the UK Proceeding which remains set for November
2022.
Whilst the Board vehemently deny the claims made by Snorkel and
Xtreme in the US Proceedings, a major part of the UK Proceedings is
premised on the Company being incorrect in relation to its
understanding of the Contemplated Transaction and the position it
has taken in the US Proceedings. If that were the case, the UK
Proceedings are now that, in summary, Ward Hadaway and/or Foulston
Siefkin were retained to advise and assist the Company in
connection with the Contemplated Transaction, in particular the
preparation of the principal transaction documents, the Circular
and the process of obtaining the required Shareholder and Board
approvals before the Contemplated Transaction could be entered
into, and that both firms and/or either firm were in breach of duty
in carrying out that role, the result of which has led to the
Company suffering substantial financial loss.
A future stage of the UK Proceedings will be the preparation of
expert accountancy evidence which seeks to value the Snorkel
division and assets which were contributed to the joint venture as
part of the Contemplated Transaction. The Board note that, in 2014,
an appraisal report of the tangible and intangible assets of
Snorkel at the time of the Contemplated Transaction was prepared
for Xtreme, by an independent expert on a fair value basis, which
the Board understand was the basis for the $45.5m net fair market
value that Snorkel / Xtreme declared was contributed by Tanfield,
via its subsidiary HBWP Inc, to Snorkel International Holdings LLC.
This independent expert report underpins the Board's continued
belief that the value of the Snorkel division at the time of the
Contemplated Transaction was substantial.
The Board remain hopeful that a positive outcome to either/both
the US Proceedings and UK Proceedings is possible and, so far as it
is necessary, the Company will continue to vigorously defend and
advance its position in both proceedings, whilst continuing to seek
advice.
Further updates will be provided to Shareholders as and when
appropriate.
For further information:
Tanfield Group Plc 020 7220 1666
Daryn Robinson
WH Ireland Limited - Nominated Advisor / Broker
James Joyce / Megan Liddell 020 7220 1666
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
STRUWRBRUWUAUAR
(END) Dow Jones Newswires
January 31, 2022 01:59 ET (06:59 GMT)
Tanfield (AQSE:TAN.GB)
Historical Stock Chart
Von Okt 2024 bis Nov 2024
Tanfield (AQSE:TAN.GB)
Historical Stock Chart
Von Nov 2023 bis Nov 2024
