English High Court delivers decision on remedies in Otello’s dispute with MFC over Vewd business
As reported to the market on September 14, 2018, Otello was successful in its claim in the High Court of Justice of England and Wales against Moore Frères & Co LLC ("MFC") and Last Lion Holdings Limited (“Last Lion”), arising from the refusal of the Board of Last Lion, which is controlled by appointees of MFC, to approve the sale of Otello’s remaining ownership stake in Last Lion, being approximately 27% in the Vewd Software business. The judge granted Otello the injunction it sought requiring the Board to approve the buyer.
The buyer did not purchase the shares on the terms of the expired Share Purchase Agreement. Otello subsequently restored the proceedings in order to pursue alternative remedies. The High Court has now determined that MFC should be required to purchase Otello’s shares in Last Lion from Otello for the sum of $48 million and that MFC should be required to purchase the Loan Note issued in Otello’s favour by a subsidiary of MFC for $5 million plus accrued interest at the time of purchase (currently $980,000). It is however understood that MFC’s only substantial asset is its shareholding in Last Lion.
In default of compliance by MFC with the order for the purchase of Otello’s shares in Last Lion and the Loan Note, all of the shares in the Company shall be sold to a third party with a receiver appointed with all necessary powers to conduct the sale with the net proceeds of a sale being applied in satisfaction of MFC’s obligation to purchase the shares and the Loan Note. The receiver will be appointed if MFC has not purchased Otello’s shares in Last Lion and the Loan Note by January 8, 2021. A further hearing will take place in the week of January 18, 2021 to determine the identity and terms of appointment of the receiver.
MFC has been ordered to pay Otello’s costs of this part of the proceedings (having previously been ordered to pay and having paid the costs of the liability stage). MFC is required to make a payment to Otello in the amount of £1.25 million by December 31, 2020 on account of Otello’s costs. If the total costs are not agreed, they will be assessed and determined by the Court.
Petter Lade, CFO
Phone: +47 91143878
E-mail: petterl@otellocorp.com
About Otello: Otello holds shares in several different businesses, including (i) AdColony which helps publishers monetize their content through advertising and advertisers reach the audiences that build value for their businesses, capitalizing on a global consumer audience reach that exceeds 2 billion; (ii) Bemobi, a Mobile Media and Entertainment company which integrate people and mobile content through technology and offers a leading subscription-based discovery service for mobile apps in Latin America and beyond; (iii) Skyfire which offers cloud-based network solutions for mobile operators and (iv) Vewd which offers OTT services in the Connected TV space.