The West Australian:
Indian group Lanco Infratech has escaped a $200m payment linked to its disastrous purchase of the Griffin coal mine as part of a confidential settlement of one of [Western Australia’s] biggest commercial court cases.
The settlement late last year coincided with insolvency firm KordaMentha flagging a final distribution of about $80m to creditors of the mine’s former owner, Griffin Energy.
Lanco sued KordaMentha and its Griffin administrators in the WA Supreme Court in 2015, alleging deceptive and misleading conduct over the 2010 sale of the Collie mine and seeking up to $700m in damages. KordaMentha denied the claims and counter-sued for breach of agreement, chasing $150m plus interest outstanding on the $740m sale.
While the terms of the settlement between Lanco and KordaMentha were meant to remain confidential, a senior Lanco executive has told Indian media that the agreement included the cancellation of the $200m debt and provided for KordaMentha to pick up Lanco’s $10m of legal expenses.
During the trial of its lawsuit early last year, Lanco claimed that KordaMentha withheld an unfavourable geological review from the mine sale data room that indicated Griffin had less coal than first thought. The company argued that had it been aware of the reports, it would have paid no more than $220m for the mine, one of the biggest employers in WA’s South West.
The coal producer has been a horror investment for Lanco, incurring a reported $300m in accumulated losses.