Korea’s top asset management firm does not have to buy 15 US hotels
A U.S. court ruled in favor of South Korea’s Mirae Asset Global Investments in a high-profile lawsuit about the collapsed $5.8 billion hotel deal with China’s Anbang Insurance Group.
The Seoul-based asset management company said on Dec. 1 that it was a clean victory _ the Delaware Court of Chancery obliged Anbang to cover all the related expenses.
“The court concluded that the seller is responsible for the failed contract because it could not keep the condition precedent,” a Mirae Asset official said.
“The court also confirmed that Mirae Asset has the right to receive all the costs incurred by litigation and the transaction itself, including the interest cost of our deposit money.”
In September last year, a consortium led by Mirae Asset agreed to buy a portfolio of 15 premium U.S. hotels from beleaguered Angang at $5.8 billion and placed a 10-percent deposit.
But Mirae Asset sent a default notice on April 17, claiming that Anbang did not keep its obligation of maintaining complete ownership of the 15 hotels before finishing the hotel takeover.
As a result, Mirae Asset contended that none of four major title insurance companies _ Fidelity National Financial, First American, Old Republic, and Steward _ agreed to back the deal.
In response, Anbang filed a lawsuit, calling Mirae Asset’s measure as a buyer’s remorse due to the virus pandemic, which led to the crisis of the hotel business. Anbang changed its name to Dajia.
And eventually, the Delaware court sided with Mirae Asset.
The seller can appeal the decision so that the Supreme Court reviews the case.