Who's suing whom: Writs against Geest claim pounds 48m damages

GEEST, the British frozen food distributor, says it will "vigorously" contest two writs it received last week which demand pounds 48.2 million in damages, and which allege it misrepresented the value of its Caribbean banana businesses it sold 21/2 years ago.

The writs were issued by the purchasers, a joint venture between Dublin- based Fyffes and the Windward Islands Banana Development and Exporting Company (Wibdeco) via their solicitors S J Berwin.

Geest claimed that the writs may be a response to its own legal action it launched against Fyffes last December concerning the same deal.

Geest's lawyers are Baker & Mackenzie.

The latest lawsuits represent an escalation in the dispute between Geest and Fyffes over the pounds 147.5m sale in January 1996 of Geest's banana interests and two transport ships to the joint venture. Fyffes subsequently sold the main part of Geest's former banana business, a 2,800 hectare farm in Costa Rica, for $14m.

Carl McCann, deputy chairman of Fyffes, and Bernard Cornibert, managing director of Wibdeco in the UK, issued a joint statement last Thursday along with their writs: "This has been a considered decision, following a detailed review of information which was not available to us at the time of the acquisition, and which revealed a couple of skeletons".

The first writ demands pounds 33.7m in damages. The writ alleges that Geest had not disclosed the existence of soil surveys showing that the Costa Rican Banana Farm could not sustain its rate of production. The writ also claims that Geest had not carried the consequences of these surveys through into its balance sheet.

"Accordingly, the value of the Farm was significantly over-stated - by US$56.5 million - in Geest's accounts; we have been advised that this was in breach of company law and accountancy practice," the writ claims.

Secondly, Fyffes and Wibdeco allege that Geest and its financial advisers, Morgan Grenfell, had told them that "another purchaser was in the frame at a comparable price. They had maintained that representation even when specifically challenged."

This price had effectively set the eventual sale price, the joint venture parties said. "In fact, as Geest's lawyers have effectively admitted in correspondence, the competing offer was in headline terms pounds 14.5 million lower", they added.

Geest hit back with its own statement on Thursday. Geest said it had launched its own writ against the joint venture last December over a financing agreement for the two transport ships which had formed part of the 1996 deal.

The financing agreement required that Fyffes made certain payments into an escrow account, and Geest claimed the joint venture had ceased to do so. Geets's legal claim is due to be heard in court on 23 September.

Ian Menzies-Gow, Geest's chairman, commented: "We have made a valid claim against Fyffes for reneging on an earlier agreement with regard to payments into an escrow account. Given Fyffes had already made payments into this account, it is odd that they have now made a U-turn."

"Indeed, not only have they U-turned, but we have received claims relating to a deal with took place some 21/2years ago. Why have they only now found problems with this deal?"

Mr Menzies-Gow continued: "Whatever their reasons, they can expect a vigorous response to their claims which are mischievous at best and ill- conceived at worst."

Geest made a number of other points in its statement. The company said that "the joint venture's claim in July 1997 was received two days before the warranty period ran out on a transaction that took place 18 months before."

Also, "Fyffes disposed of the banana plantation assets on 1 March 1996, within two months of acquiring the business, but only made a claim relating to this business some 16 months after the dipsosal."

The staement added: "In December 1996, on settlement of an outstanding issue relating to working capital, Fyffes's deputy chairman specifically stated that, excepting the ships, there were no other issues to be resolved with Geest."

The statement concluded that "the audited accounts for the newly-purchased banana business were approved and signed-off by the directors of the joint venture in April 1997, including the now disputed values for the plantation assets. Geest's request nearly a year ago for further information to support the joint venture's claim remains unanswered."

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Homeless Veterans appeal: Former soldiers pay their respects to a friend who also served

Homeless Veterans appeal

Former soldiers pay their respects to a friend who also served
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

The Locked Room Mysteries

As a new collection of the genre’s best is published, its editor explains the rules of engagement
Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

How I made myself Keane

Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Parting view of Ofcom chief... we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
A look back at fashion in 2014: Wear in review

Wear in review

A look back at fashion in 2014
Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

Ian Herbert: My 10 hopes for sport in 2015

Might just one of them happen?
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?