Litigation escalates about collapsed $5.8 billion U.S. hotel deal
South Korea’s Mirea Asset Global Investments said on May 21 that it had filed a counterclaim with a U.S. court about the collapsed $5.8 billion hotel deal with China’s Anbang Insurance Group.
Denying all allegations, which Anbang raised via its April lawsuit, the Seoul-based asset manager claimed that Anbang is responsible for the failed deal.
“Anbang could not secure title insurance protection by the April 17 deadline, which is in violation of the contract. Hence, we could not close the deal,” a Mirae Asset official said.
“Anbang’s lawsuit with a third-party player caused all the problems. As a result, a total of four underwriters refused to offer comprehensive title insurance to the 15 hotels.”
The official said that Anbang neither addressed the issue nor gave any satisfactory explanations, which prompted Mirae Asset to scrap the takeover.
A consortium headed by Mirae Asset agreed to buy a portfolio of 15 premium hotels from beleaguered Anbang last September at $5.8 billion and placed a 10-percent deposit.
Contending that Anbang did not keep the condition precedent about title insurance, however, Mirae sent a default notice on April 17. Then, Anbang filed a lawsuit with a Delaware court in late April to enforce the agreement.
The Mirae Asset official said that Anbang’s activities are tantamount to a “fraud” because it could not keep its obligation of maintaining complete ownership of the 15 hotels before wrapping up the hotel acquisition.
Mirae Asset claimed that the 10-percent deposit should be returned and Anbang should cover all the legal expenses of Mirae Asset incurred by the litigation.
By contrast, Beijing-headquartered Anbang has argued that it satisfied all conditions of the sales, thus blaming Mirae Asset for cancellation of the takeover.
For the months to come, Mirae Asset and Anbang are expected to focus on the pre-trial ‘discovery’ procedure in which they can obtain evidence from each other in various ways.
Mirae Asset said the hearings would take place during August 24-26. The Delaware Court of Chancery is projected to come up with its verdict in late August or early September at earliest.