- February 23, 2012
- Posted by: admin
- Category: Clothing and Textiles
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