South Korean investment bank Mirae Asset Daewoo won a U.S. court case against Anbang Insurance Group, after Mirae scrapped a $5.8 billion deal after the start of the pandemic to buy 15 U.S. hotels from Anbang, Reuters reported.
- Backdrop: Mirae did not close the deal on the scheduled April 2020 date, saying that Anbang’s representations were inaccurate and failed to satisfy conditions, which led Anbang to file the suit saying Mirae must fulfill its promised payment. The Delaware Court of Chancery found that the Anbang company that owns the hotels made extensive changes to its business because of COVID-19, such as employee layoffs, furloughs, and closing amenities.
- Why it matters: The case in Delaware, where many companies are registered, could set a precedent for deals that have seen valuations drop since the COVID-19 pandemic, as buyers no longer want to buy assets under the terms of agreements reached before. [Reuters]