Scully Royalty Ltd. (SRL) yesterday provided an update on its litigation relating to a guarantee committed by the former parent company of the Group. The update surfaced in response to a report recently made public by a third party which the company called an inaccurate report.
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About the litigation process the company updated reiterating that it was also named as defendant among certain of its subsidiaries in the legal action. The litigation was to contest in a claim of approximately EUR 43 million to which former parent organization of the Group has guaranteed. The company is in dispute over the validity of the alleged guarantee and does not consider any merit in the claim related the alleged guarantee to the Group.
A part of the litigation, the plaintiff was initially granted an ex parte freeze order in the Cayman Islands. The order, among other things, imposes a restriction upon company to sell or dispose certain shares in its subsidiaries and other assets. To do so, company has to seek approvals after meeting certain conditions.
The company in its update shared its stance on the matter calling it a non-monetary judgment and said it is just a freeze order which is only applicable in the Cayman Islands. The company has filed an appeal against the decision and a three-judge panel is likely to be hearing the appeal in the second half of 2021.
The company also said that the freeze order is not related to its current daily businesses. And it is in believes that ultimate result of this litigation will have any material impact on company’s financial standings.
The company has simultaneously filed a counterclaim against the plaintiff more than the amount of claim it has filed against the company. And that counterclaim does not cover other potential damage claims which is the company is intending raising in the time ahead.
Given the very initial stages of this litigation, the company does not expect it to be resolving in a short period of time.