Belgian shipowner CMB’s US lawyer is alleging abuse of the court system by New York investment fund FourWorld Capital Management as it seeks to halt the Saverys family company’s takeover of tanker owner Euronav.
The fund started proceedings in the US last week, but a parallel suit was revealed by Euronav on Monday in Belgium.
In a letter to Judge Jessica Clarke at the District Court of the Southern District of New York, CMB’s lawyer Michael Keats of Fried Frank said CMB only learned of this legal action over the weekend.
He claimed FourWorld stated in these European proceedings that it intended to use confidential and proprietary documents produced by CMB in the US action.
Keats said the fund has refused to sign a customary confidentiality order, and the law firm now wants the US court to bar these documents from being used in Belgium.
“We attempted to meet and confer over the weekend with plaintiffs concerning whether plaintiffs would voluntarily agree to discontinue the action and thus avoid burdening the court with further unnecessary litigation over a moot lawsuit,” Keats wrote in a letter filed to the court.
“Plaintiffs, however, have refused to withdraw their preliminary injunction motion or discontinue this action,” he added.
FourWorld is seeking to force CMB to increase the tender offer price months after the deal was announced, the lawyer said.
“It appears that plaintiffs commenced this [US] litigation not to vindicate any sincerely held beliefs concerning the sufficiency of the disclosures [in the takeover], but rather to obtain proprietary documents from CMB and non-party Euronav, which are not otherwise readily available to plaintiffs in the Belgian proceeding,” Keats wrote.
All this “strongly suggests that plaintiffs are abusing the US litigation process solely to obtain documents not readily available to them in Belgium”, the lawyer claimed.
‘Baseless’ case
He added that the documents will in no way change the result in Belgium “as plaintiffs’ claims are baseless”.
An attempt to contact FourWorld by email was rejected because TradeWinds was not on the company’s approved senders list.
No phone numbers for its New York or Munich offices are published on its website.
Euronav said on Monday: “The complaint seeks mainly for CMB to adjust the bid price, taking into account alleged special benefits that would have been granted to Frontline on top of the cash purchase price paid by CMB for its shares of the company.”
CMB said the second suit had been filed at the Market Court in Belgium.
“The request does not indicate what this higher price should be,” CMB added.
“CMB reiterates that the proceeding is without merit and intends to vigorously defend against it,” the company said.
CMB launched a mandatory bid for the remaining shares in VLCC and suezmax specialist Euronav earlier in February, following the acquisition of Frontline’s stake, which lifted CMB’s ownership of Euronav to 57%.
Since that deal, FourWorld increased its own stake in Euronav from just under 1% to 2.41% by acquiring at least 3.13m shares for a total price of $55.8m.
According to CMB, FourWorld’s representative had every opportunity to raise any objections at Euronav’s recent shareholder meetings, during which the supervisory board provided detailed responses.
