David RichardsAdministrators to the failed Leisuretech Group, along with the UK Armour group and two other creditors including the Australian Taxation office have accepted an offer to settle with Leisuretech following a new valuation of the Company.
According to Leisuretech CEO Andrew Goldfinch Armour Group has accepted a 15% increase in the valuation of the Company.
Last month ChannelNews exclusively reported that a new valuation had emerged and that the parties were back discussing a settlement.
Last year Leisuretech lost a lengthy legal battle against the Armour Group when the UK High Court ruled that the Leisuretech A-BUS patent was not valid in the UK. Armour is also challenging the Companies European patent.
Shortly afterwards Leisuretech was suddenly placed into administration leaving being two core creditors, the Armour Group and his UK solicitors Allen & Overy and the Australian Tax Office.
Within hours of Leisuretech being placed into administration a new Company emerged also called Leisuretech. The Company that had the same directors as the old Leisuretech also had all the remaining assets of the old Company with the exclusion of close to $2M in liability the Armour Group and his UK solicitors Allen & Overy and the Australian Tax Office.
Central to the argument between Leisuretech and its creditors was a valuation that Goldfinch and his accountant partner Jonathon Rich generated which valued the assets of the old Leisuretech business at $2M.
According to George Dexter, the CEO of the UK Armour Group, who was one of the major creditors of the failed company, the original valuation of Leisuretech, who claim to own the patent to the A-BUS automation system, did not include several assets and the valuation was deliberately engineered by Goldfinch and Rich in an effort to avoid the paying out of creditors.
The valuation was used by Rich and Goldfinch to buy the assets of the old company while dumping $2M in liabilities with two UK Companies. Ironically, the creditors that were needed for the new company to continue trading were paid out by Leisuretech prior to being placed into administration.
Armour claimed the asset value placed on Leisuretech was too low and asked for an independent audit.
According to Goldfinch, the independent audit came in about 15 percent higher than the original audit.
In an interview with CEPro in the USA Goldfinch said “We put forth a proposal to the administrator to resolve the issues and it was accepted by Armour,” says Goldfinch.
It is believed that Goldfinch has been forced to settle for between $1.6 million and $1.9 million.
LTE says the settlement “brings to an end any avenue for litigation relating to the sale of the business or against the directors of the company and any suggestion that regulatory authorities will be called on to reviews Leisuretech’s business or conduct.”