(Alliance News) - Tanfield Group PLC on Thursday said it would "vigorously" defend itself from claims brought about by Snorkel International Holdings LLC and SKL Holdings LLC.
Tanfield has a 49% stake in Snorkel under its joint venture with Xtreme Manufacturing LLC, which owns SKL and is itself owned by Don Ahern of Ahern Rental Inc.
In November 2018, SKL exercised a call option for Tanfiel's Snorkel interest at an option price of nothing. SKL also claimed it did not have to pay the priority amount and preferred return on the Snorkel stake.
Tanfield on Thursday was updating investors over legal proceedings that have recently been served on its former solicitor Ward Hadaway, in relation to its role in the transfer of Tanfield's Powered Access division to Snorkel International.
Earlier this week, Tanfield said Snorkel and SKL filed a summons and complaint in the US against the company in Nevada.
SKL and Snorkel, according to Tanfield, allege that Tanfield "has refused to comply with its contractual obligations relating to a purported call option which sought to acquire the company's membership interest in Snorkel for an option price of USD0 as well as purporting that payment of the priority amount and preferred return is not required".
Tanfield said it did not agree with the claims "and rejects the validity of the purported call option notice".
As a result of issues arising from the US litigation, Tanfield said it may need to hold Ward Hadaway to account for its role in and advice it gave to Tanfield in relation to the joint venture transfer. Moreover, Tanfield said it became necessary to issue and serve a claim against Ward Hadaway in the English High Court in order to ensure that the company's rights were fully protected pending the outcome of the US Litigation.
Tanfield said its intention is to seek a stay of the claim, pending the outcome of the US Litigation, as the outcome of this "will have a direct and material impact on the Company's claim, including the quantum of the claim".
Tanfield added that at this stage it is unknown if and when a stay will be obtained, but continues to seek advice and will "vigorously protect its position".
The stock closed up 19% at 4.00 pence a share in London on Thursday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Tanfield (TAN)