Newsletter #001 (View other news stories)
CASCADE MERGER DELAYED PENDING US$25M ENVIRONMENTAL DAMAGES CLAIM
Portland, United States
Friday, 19 Jan 2001
PORTLAND, USA -- Pending environmental damages litigation is delaying the merger of leading attachments manufacturer Cascade Corporation and the Lift Group.
Cascade entered a merger agreement with Lift Technologies Group, TD Capital Group and the Ontario Municipal Employees' Retirement Board in October 2000.
The Lift Group, a company formed by the three buyers, was to assume Cascade as a wholly owned subsidiary. The purchase price was about US$320 million, including outstanding debts.
The proposed completion date was to be January 31, but has been moved to March 31 pending the litigation, initiated by the City of Portland, which is seeking another US$19 million, further to a US$6.6 million environmental damages claim against Cascade and The Boeing Company.
The City of Portland brought a claim against the companies in December 1999, alleging damages to a city-owned water wellfield from groundwater contamination from the companies' Portland plants.
Cascade and Boeing say they are remedying the contamination, and that it has not affected water pumped from the wellfield. But in November the city raised new theories, which it asserts increase its damages claim against the companies by up to US$19 million.
Cascade believes the additional damage claim is without foundation and, in cooperation with the Lift Group, is taking action to minimize any resulting liability risk. Cascade said it had adequate insurance to cover any court order made against it.
A company statement said Cascade and the Lift Group remained committed to the proposed merger, and intended to close it "as expeditiously as possible". The merger is conditional upon obtaining shareholder and regulatory approvals.
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