The High Court in Hong Kong has issued an order dismissing various claims made by East Asia Satellite Television against New Cotai and other parties over the Macao Studio City project. East Asia is a joint-venture company through which eSun Holdings and Singapore’s CapitaLand have invested in Macao Studio City. New Cotai became an investor in Macao Studio City in December 2006. The company is owned by former Las Vegas Sands executive David Friedman and two United States investment firms, Silver Point Capital and Oaktree Capital Management. The High Court found that derivative claims made by East Asia on behalf of the Macao Studio City joint-venture companies and the personal claims made on its own behalf against the directors of New Cotai were untenable. The amount sought was understood to be about US$2,385 million (HK$19.1 billion). However, the court said there was “a good arguable case” regarding a separate US$88.6 million claim against Oaktree and Silver Point “for inducing New Cotai to breach” the share-purchase agreement. Claim, counter-claim East Asia sued joint-venture partner New Cotai and connected parties for allegedly failing to cooperate and progress the Macau Studio City project. The suit followed the US investors’ offer to buy out eSun at HK$1,200 a square foot in July 2008, according to sources quoted by the Wall Street Journal. Late last year, eSun counter-offered to buy out the US group at HK$400 a square foot. “We are pleased that the High Court dismissed so many of East Asia’s claims at this early stage of the proceedings. We will vigorously defend the remaining claims,” said David Friedman, New Cotai’s chief executive. “New Cotai remains fully committed to Macao Studio City and wants to see the project completed as soon as possible. To date, we have made exhaustive attempts to resolve our differences with East Asia and have refrained from filing our claims in an effort to come to an amicable resolution that will allow the project to move forward expeditiously. “However, if this cannot be accomplished, then we will have no choice but to assert the substantial claims for damages we have suffered.” eSun has stressed that legal proceedings against New Cotai and others “are continuing”. The continuing proceedings “include claims for damages against New Cotai for breach of contract, and against New Cotai’s shareholders, Silver Point Capital, L.P. and Oaktree Capital Management, L.P., for inducing breaches of contract. “East Asia also claims that it has suffered unfair prejudicial conduct concerning the operation of Cyber One Agents Limited, as the joint venture entity, through which the project is being conducted, in respect of which East Asia seeks an order that New Cotai be required to sell its shares to East Asia at a valuation to be determined by the court.”
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