(Reuters) – South Korean investment bank Mirae Asset Daewoo Co. Ltd. and subsidiary won a US lawsuit against Anbang Insurance Group, a legal document showed after Mirae scrapped a $ 5.8 billion deal after the pandemic began buying 15 hotels in the US from Anbang.
The case in Delaware, where many companies are registered, could set a precedent for business that has seen valuations fall since the COVID-19 pandemic, as buyers no longer want to buy assets under the terms of
A consortium led by Mirae agreed last year to buy the hotels from Anbang, which sold some of its overseas assets after the Chinese government took control of the troubled insurance company in 2018.
But Mirae did not close the deal on the planned date in April 2020 and said that Anbang's submissions and guarantees were incorrect and that they did not meet the conditions, which led Anbang to file the lawsuit and said that Mirae must fulfill its promised payment, our document showed.
This led to the non-fulfillment of a condition that business would be "conducted in the ordinary course of business" and enabled Mirae to terminate the agreement, the court document said.
Mirae said in a legislative application on Tuesday that depending on whether the plaintiff appeals, it will respond through its legal representative.
Anbang has been liquidated and some of its assets have been placed in a new entity called Dajia Insurance Group. An official from Dajia did not receive an immediate response.
Shares in Mirae Asset closed up 6.5% in Seoul on Tuesday.
"Mirae won because Anbang did not meet the conditions, but it wanted to get out of the deal because investors did not gather," said one analyst, who refused to be identified to protect business relationships.
"The decision removes short-term risk, too. if it can have unforeseen negative effects if Mirae wants to do business in China.