The Cronos Group Takes Action to Resolve Litigation
27 Mars 2006 - 10:19PM
Business Wire
The Cronos Group (NASDAQ:CRNS) today announced that it has
purchased all the known creditors' claims against Transocean
Equipment Manufacturing and Trading Limited ("TOEMT"). As a result
of the acquisition of the creditors' claims, Cronos believes that
it will now be able to bring to a conclusion the litigation brought
against Cronos in the U.K. Cronos recognized a charge of
approximately $4.1 million in the fourth quarter of 2005 as a
result of an agreement it entered into with an unrelated party.
Cronos expects to see a significant reduction in litigation
expenses in 2006. The liquidator of TOEMT filed his claims against
Cronos in December 2004, alleging that Cronos wrongfully
participated in the diversion of funds from TOEMT, dating back to
1991. The liquidator has claimed damages against Cronos of "at
least" $41 million, plus interest and costs. Although Cronos
believes that the claims are without merit, the Company also
believes that the time and legal expenses required to defend the
action would be excessive, and detrimental to the day to day
operations of the Company's business. Dennis J. Tietz, Chairman and
CEO of Cronos said, "With the purchase of the claims of the only
known creditors of TOEMT, we intend to exercise our rights as
creditor to bring an end to the litigation brought by the
liquidator against Cronos. Now that we are the real party in
interest in the TOEMT insolvency proceedings, there is no point to
the prosecution of the litigation brought by the liquidator against
Cronos." Mr. Tietz added, "Even though we are confident that the
liquidator's claims are without merit, and we are prepared to
vigorously defend our position, we also felt it was time to take
advantage of the opportunity to purchase the claims of the TOEMT
creditors as a means to spare our shareholders, customers, and
employees the uncertainty and cost of protracted litigation. We
have taken a significant step toward the elimination of the
distraction of this litigation, which will enable us to focus 100%
on our business." Cronos is one of the world's leading lessors of
intermodal containers, owning and managing a fleet of over 446,000
TEU (twenty-foot equivalent units). The diversified Cronos fleet of
dry cargo, refrigerated and other specialized containers is leased
to a customer base of approximately 450 ocean carriers and
transport operators around the world. Cronos provides
container-leasing services through an integrated network of offices
through state-of-the-art information technology. This release
discusses certain forward-looking matters that involve risks and
uncertainties that could cause actual results to vary materially
from estimates. Risks and uncertainties include, among other
things, changes in international operations, exchange rate risks,
changes in market conditions for the Company's container lease
operations and the Company's ability to provide innovative and
cost-effective solutions. For further discussion of the risk
factors attendant to an investment in the Company's common shares,
see the Introductory Note in the Company's Annual Report on Form
10-K that was filed with the SEC on March 22, 2005. This press
release and other information concerning Cronos can be viewed on
Cronos' website at www.cronos.com.
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