High Court rules against East Asia on Macao Studio City project

The High Court in Hong Kong issued an order last Friday (July 17) dismissing various claims made by East Asia Satellite Television (Holdings) Limited against New Cotai, LLC and other parties in regard to the Macao Studio City project. East Asia is a joint venture company through which eSun Holdings Limited and CapitaLand Limited have invested in Macao Studio City. New Cotai, owned by Silver Point, Oaktree and former Las Vegas Sands Corp. executive David Friedman, became an investor in Macao Studio City in December 2006. East Asia initiated legal proceedings against New Cotai in October 2009. The High Court found that derivative claims made by East Asia purportedly on behalf of the Macao Studio City joint venture companies and personal claims made on its own behalf against the directors of New Cotai LLC, were untenable. Hence, these claims, purportedly for damages of approximately US$2,385 billion (HK$18.6 billion) were dismissed in their entirety. However, the court stated there is "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. East Asia sued joint-venture partner New Cotai, LCC and parties interested in that company, for allegedly failing to co-operate and progress the Macau Studio City project. The suit followed the U.S. investors’ offer to buy out eSun at HK$1,200 a square foot in July 2008, according to some people familiar with the matter, quoted by the Wall Street Journal. Late last year, they say, eSun offered to buy out the U.S. group at HK$400 a square foot for the project. "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, CEO of New Cotai. "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," added Mr Friedman.