International Real Estate (IRE), formerly Criterion Properties, and ex-managing director Aubrey Glaser have “amicably” settled their lengthy dispute over the validity of a “poison pill” arrangement, intended to protect Criterion from takeover,
In a Stock Exchange announcement, Aim-listed IRE said that the out-of-court settlement would have “no negative impact on the results for the year”.
Rolf Nordstrom, IRE chairman, said: “I am pleased that the litigation has now come to an end and I am looking forward to progressing the company’s activities in Germany, where we have been active for the past year and see good opportunity for growth.”
Criterion entered into a partnership with Stratford UK Properties, a subsidiary of US investment adviser Oaktree Capital Management, in January 1998, for the purpose of investing in real estate within the UK.
In March 2000, the companies entered into the “poison-pill” arrangement, which conferred on Stratford a put option to require Criterion to purchase Stratford’s partnership interest.
Managing director Aubrey Glaser signed on Criterion’s behalf.
When the company’s board members learnt of the arrangement, they summarily dismissed Glaser.
Stratford then sought to exercise the put option, calculating the value of its share in the joint venture at more than £4m.
However, IRE claimed that its former managing director had signed the agreement in breach of his duties.
In June 2004, the case, which was launched in 2001, went before the House of Lords but was dismissed owing to insufficient evidence.
References: EGi Legal News 31/05/06