Tanfield Group raises more funds to fight legal battle for control of Snorkel

The Tanfield Group could raise a further £2m for legal battles at home and in the US in which it vies to retain control of its stake in cherry picking company Snorkel.

The group told the London Stock Exchange it had issued a new loan note of up to £2m which attracted subscriptions of £950,000, including £700,000 from its investors OTK Holding A/S and Zoar Invest Aps.

Lenders will see 10% interest which is repayable either once Tanfield is successful in its US and UK court cases over its £19.1million stake in Washington-based Snorkel, or by the end of February 2025.

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Tanfield has already raised up to £1.57m through previous loan notes and this latest loan comes as the company warned of delays in legal proceedings and said a trial window in the United States would now begin in February 2023, while his legal case in the United Kingdom progresses towards a trial in November. .

The dispute centers on a step acquisition deal in 2013, in which Tanfield sold a 51% stake in loss-making Snorkel to Xtreme Manufacturing LLC, in order to save it.

Prior to trial, expert accounting evidence will be prepared to assess Snorkel at the time of the deal between Tanfield and Xtreme, which included performance-related conditions that would allow Tanfield to sell its remaining shares to Xtreme.

However, Xtreme claims that these goals have not been met and that it now has the right to acquire Tanfield’s 49% stake in Snorkel for free.

In January, Tanfield announced that it had amended its claim in the UK proceedings to include US law firm Foulston Siefkin as a second defendant in addition to Newcastle law firm Ward Hadaway.

An update from Tanfield said: “The board believes further underwriting of the third loan may be necessary to ensure the company continues to protect its investment in Snorkel.

“Following discussions with existing shareholders, should further subscriptions be required, the Board of Directors is of the opinion that additional funding will be made available.”

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