(Alliance News) - Tanfield Group PLC's share price dropped as US proceedings in its trial over its shares of Snorkel International Holdings LLC have been delayed until August "at the earliest".
Tanfield's share price dropped 10% to 2.02 pence each in London at midday on Monday.
The investment firm headquartered in Newcastle Upon Tyne is a 49% equity shareholder of aerial work platform business, Snorkel, a joint venture with Xtreme Manufacturing LLC which owns the remaining 51%, via its subsidiary SKL Holdings LLC.
Tanfield's equity stake is the subject of legal proceedings in the US, after SKL filed a complaint against the company in court, alleging it refused to comply with contractual obligations when SKL exercised a call-option to acquire Tanfield's shares in the JV.
Tanfield disputed this, and said it had made attempts to resolve the issue "amicably".
All parties have been producing documents for the discovery process at trial, but Tanfield said there have been delays and deficiencies on the documents produced by Snorkel and SKL. These continued delays have caused the trial window to be pushed back again, the company said.
Tanfield is also in legal proceedings with its former UK law firm, Ward Hadaway, who oversaw the transfer of the JV, over a breach of legal duty. The law firm contested that it would have been under the remit of Foulston Siefkin, Tanfield's former US firm, and were granted permission to join them into the legal proceedings in February. Accordingly, Tanfield said on Monday it has recently added Foulston Siefkin as a secondary defendant in the case.
The UK trial will still commence in November.
"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," the investment firm said.
The value of Tanfield's share in Snorkel is GBP19.1 million, but the company notes this could change depending on the outcome of both legal proceedings.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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Tanfield (TAN)