Mirae Asset Global Investments, one of South Korea’s largest asset management firms, said on Dec. 1 that it won a US court case against Chinese insurer Anbang Insurance Group over legal disputes involving a $5.8 billion deal to acquire luxury hotels.
The Delaware Court of Chancery rejected Anbang’s demand of Mirae Asset to pay off the rest of the deal, and ordered the Chinese insurer to return $580 million it received from the South Korean company as a deposit of the deal, with interest. It also ordered Anbang to pay $3.68 million of Mirae‘s spending on litigation and other procedures.
Mirae Asset Global Investments’ headquarters in Seoul (Mirae Asset Financial Group)
Mirae signed the landmark deal last year to acquire 15 hotels in the US from Anbang. But the acquisition agreement started faltering as the seller, Anbang, failed to meet certain conditions required to close the deal, Mirae Asset said.
It was unknown, as of press time, whether Anbang was considering appealing the case to a higher court.
Disputes between the two started to flare up in April, with Anbang filing the suit against Mirae for failing to complete payment of the $5.8 billion takeover.
Having refused to pay the money, Mirae Asset claimed the Chinese insurer had failed to meet some necessary conditions to complete the deal by April 17 as set out in the contract. The US court acknowledged that Anbang failed to secure title insurance, a measure that guarantees ownership of a property, for some of the hotels. In addition, Anbang was found to have been involved in litigation over the ownership of the properties in the US, it added.
“The covenant compliance condition and the title insurance condition were not satisfied on the closing date, which relieved the buyer of its obligation to close,” said the Delaware Court of Chancery in its verdict.
“The seller failed to cure its breach of the ordinary course covenant, and the buyer properly terminated the sale agreement,” it added.
The sale deal was initially scheduled to be closed on April 17 if it were to proceed as stipulated.
By Kim Young-won (firstname.lastname@example.org)