(Sharecast News) - Clear Leisure announced on Friday that its subsidiary, Clear Leisure 2017, has entered into a binding agreement with Sosushi Company to buy the €1.03m legal action against former Sosushi directors, as originally announced in March.
The AIM-traded firm is a 99.3% shareholder of Sosushi.
It said the completion of the acquisition meant that CL2017 was now the owner of all the material Italian legal claims representing the historical assets of the company, being Fallimento Mediapolis Srl, Sipiem SpA in liquidation, and Sosushi).
That structure would be more effective for ring-fencing the litigations in one single vehicle in the UK legal jurisdiction.
The legal action originated when Sosushi's liquidator filed a claim against Sosushi's previous executive management team for fraud and mismanagement, with the first court hearing held at the Bologna Court on 4 July.
Under the terms of the agreement, CL2017 paid €10,000 to Sosushi by reducing part of its current shareholder loan of £130,000.
CL2017 would bear all future legal costs, which were currently estimated by the directors to be €20,000, and would receive 90% of any monies recovered should the ruling go in favour of the plaintiff.
The law firm acting on behalf of CL2017 would receive a small contingency fee, based on funds received from the defendants, to be paid on a successful outcome.
Sosushi would receive 10% of any funds awarded, which would allow Sosushi to repay the majority of its loan due to Clear Leisure.
"The potential net return to Clear Leisure of this claim is in the region of €900,000 which, when added to the potential return of 70% from the Sipiem claim, as announced on 10 September, totals more than €8m," said Clear Leisure chairman and chief executive Francesco Gardin.
"With this in mind together with the expected payment to CL2017 from Mediapolis land auction proceeds of just below €1.9 million, Clear Leisure 2017 Limited has a potential recoverable total of nearly €10m under the best-case scenario."
22 Oct 2013 15:18
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