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SEARDEL – BURYING THE HATCHET – CLAIM SETTLEMENT

Settlement has apparently been reached in a long- standing legal claim against former directors of  clothing and textile company Seardel, including the  late Aaron Searll, its founder and former CEO.

 

The FM understands, though, that the original claim  of R300m by Seardel has been negotiated down to a  markedly lower settlement — purportedly R120m.

This would be equivalent to roughly  15c/share before assuming costs  associated with the action.

Last Friday Seardel issued a standard  cautionary notice with no additional  detail. CEO Stuart Queen told the FM he  was unable to respond to queries  regarding litigation at this point.

The legal claim against former Seardel  directors — mainly the Searll estate —  first came to light in 2009, just after empowerment  group Hosken Consolidated Investments (HCI) rode to  the rescue of the debt-laden company by  underwriting a R300m rights issue.

The claims apparently revolve around personal  property transactions undertaken by Searll. Seardel  argues the benefits of these transactions should have  accrued to the company.

The terms of the lower settlement will be  fascinating to gauge, especially since the Searll family  is still a significant minority shareholder in Seardel.

Initial speculation was that Seardel  would settle for a return of the  properties in question. That seems  unlikely now.

But a R120m settlement does cover  an outstanding unsecured loan of  R100m that the Searll family — through  Grawood Investments — still has  outstanding at Seardel.

Source: Financial Mail – Marc Hasenfuss