Is BWX Limited (ASX:BWX) getting trapped in legal proceedings by Waterloo Capital Partners LLC?

BWX responded to the legal proceedings which were filed by Waterloo Capital Partners LLC (WCP). The Group updated the market that WCP has filed proceedings against the Company in the Supreme Court of the State of New York and WCP is a business broker that was retained by the Company in early 2017 to identify acquisition opportunities in the USA.  One of the allegation by WCP was that WCP owns a success fee in the sum of approximately US$1.395 million relating to BWX’s acquisitions of the Mineral Fusions business and the Andalou Naturals business in 2017. Other elements of the claim included were not well articulated and WCP was also claiming payment of material damages from BWX, principally on the basis that WCP has not been granted a share of the management incentive pool which might be available to John Humble and Aaron Finlay arising from their partnership with Bain Capital Private Equity, L.P.

On the other hand, BWX does not believe that the success fee is payable to WCP and, in any event, payment of any success fee to WCP in the future will be dependent on a number of factors, including the future performance of the Mineral Fusion and Andalou Naturals businesses. BWX’s Independent Board Committee believes that WCP claim has been filed opportunistically having regard to the Indicative Proposal. The Group will actively defend the legal proceedings by WCP. The stock price fell by 3.2 per cent and was trading at $5.49 as on 10 July 2018; 03:00 PM AEST.


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