(Alliance News) - Tanfield Group PLC on Thursday said that its legal proceedings against Snorkel International Holdings LLC in the US have continued, adding that its application for a stay in the UK proceedings have been refused.
The investment firm has a 49% membership interest in Snorkel International. Heavy equipment maker Xtreme Manufacturing LLC holds the remaining stake in the Snorkel joint-venture.
In October, Tanfield said both Snorkel and SKL Holdings LLC - which is an an Xtreme subsidiary - filed a summons and complaint against Tanfield in a US court. The complaint is in relation to SKL exercising a call option in November 2018, to acquire Tanfield's share in the joint-venture. Tanfield took aim at "the validity of the purported call option notice"and claimed to have attempted "to resolve the dispute amicably".
SKL and Snorkel, according to Tanfield, alleged that Tanfield "refused to comply with its contractual obligations in relation to the purported call option correspondence".
Tanfield's Snorkel investment is valued at GBP19.1 million, though the firm noted that the outcome of the US litigation could impact the investment value.
The company added that in March, it filed an application for a stay in the UK proceedings, pending the outcome of the US proceedings. However, the application was refused and a UK trial is expected to take place between July 2021 and October 2021.
"As a result of the UK proceedings continuing to progress, the board is reassessing the company's longer-term funding requirements, in addition to the GBP500,000 loan note currently subscribed to," Tanfield said.
In March, the firm said its shareholders put in place a GBP700,000 loan instrument to help in its legal battle against Snorkel.
Tanfield stated that it has not yet received financial results from Snorkel for the quarter to the end of 2019 or for the quarter to the end of March, but it highlighted its contractual rights to secure the information through legal means.
Tanfield stock closed untraded on Wednesday in London, last quoted at 3.25 pence each.
By Ife Taiwo; ifetaiwo@alliancenews.com
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