"No Need to Pay 26.7 Billion KRW to Elliott"... Samsung C&T Wins Second Trial

[Financial News] The American hedge fund Elliott filed a lawsuit claiming that Samsung C&T should pay delayed damages according to a secret agreement related to the merger of Samsung C&T and Cheil Industries, but it was not accepted in both the first and second trials.
Seoul High Court Civil Division 16 (Presiding Judge Kim In-gyeom) on the 29th upheld the original ruling of the plaintiff's loss in the lawsuit filed by Elliott against Samsung C&T for the return of the agreed sum.
Previously, during the merger process of Samsung C&T and Cheil Industries in 2015, Elliott, which held 7.12% of Samsung C&T shares, opposed the merger and applied to the court for an adjustment of the stock purchase request price. They sought legal judgment claiming that the Samsung C&T shares were evaluated too low at 57,234 KRW per share.
Elliott, who lost in the first trial, appealed, and in the meantime, in a lawsuit filed by other shareholders, the Supreme Court ruled that 57,234 KRW per share was too low and 66,602 KRW was appropriate.
Samsung C&T made a secret agreement with Elliott to withdraw the lawsuit, stating that they would pay the same compensation as other shareholders who exercised the stock purchase request. Accordingly, Elliott withdrew the appeal and disposed of all Samsung C&T shares, and Samsung C&T additionally paid Elliott over 65.9 billion KRW (approximately 72.4 billion KRW including taxes) in 2022.
However, Elliott filed a lawsuit in October 2023, claiming that Samsung C&T should additionally pay 26.7 billion KRW in delayed damages according to the secret agreement. Samsung C&T countered that they had no obligation to pay delayed damages.
The first trial sided with Samsung C&T. The first trial court interpreted that "the amount provided in excess of the presented price per share or value transfer" in the agreement referred to the principal of the stock purchase price, and judged that it was difficult to see it as a provision for including delayed damages.
Furthermore, it stated that "there is a possibility that the end date of delayed damages occurrence may differ for each shareholder, making it difficult to convert into 'price per share'" and "the agreement does not include a definition or calculation method for converting delayed damages into price per share."

jisseo@fnnews.com Minji Seo Reporter