Liquidators seek to wind up Moulin amid legal dispute

PUBLISHED : Tuesday, 16 May, 2006, 12:00am
UPDATED : Tuesday, 16 May, 2006, 12:00am

Former in-house lawyer launches court action in US claiming 3pc stake in ECCA

The provisional liquidators of Moulin Global Eyecare Holdings are seeking to wind up the company amid an acrimonious legal dispute with a former in-house lawyer of the eyewear firm.

'Most likely, Moulin will be wound up [next month],' Roderick Sutton, an executive director of restructuring firm Ferrier Hodgson, said yesterday.

Mr Sutton and another Ferrier Hodgson executive director, Desmond Chiong Chung Seng, were appointed by the High Court as Moulin's provisional liquidators a year ago following a request from HSBC, which is leading more than 20 banks in claiming over $2 billion from the company.

Meanwhile, a former in-house lawyer of Moulin, Anthony DiChiara, is suing the company, subsidiary ECCA Holdings and the provisional liquidators in a United States district court, claiming he was legally entitled to 3 per cent of ECCA.

The provisional liquidators estimated the stake would be worth US$8.7 million.

In an email, Mr DiChiara, who now lives in the US, said he led and structured the acquisition of the US optical retailer in March last year.

'As compensation for his hard work, agreed to in advance, Mr DiChiara was lawfully given 3 per cent of ECCA's stock. ECCA conceded Mr DiChiara's ownership of its stock in multiple documents filed with the US Securities and Exchange Commission. Moulin's overzealous and ungrateful liquidators have launched a campaign to unjustly take away Mr DiChiara's stock through bullying tactics and frivolous litigation,' the email said.

Mr Sutton replied: 'This is not an issue to be emotional over. The liquidators were doing their job.'

On May 5, the liquidators filed a motion to dismiss Mr DiChiara's suit, they said in an announcement to the Hong Kong stock exchange.

The US court was scheduled to decide on June 9 whether to continue the case or transfer it to Hong Kong, Mr Sutton said.

He said any agreement to grant Mr DiChiara ECCA stock was invalid because it was never approved by Moulin's board and no ECCA shares were ever transferred to him.

'The important thing in this legal dispute is the issue of corporate governance. Mr DiChiara, the corporate counsel of Moulin at the time of the ECCA acquisition, is claiming 3 per cent of ECCA. The corporate counsel must be independent. Where the corporate counsel is receiving 3 per cent of ECCA stock, Moulin's board should vote on this matter after independent legal advice, otherwise it is a conflict of interest,' he said.

On April 25, the liquidators reached an agreement to sell ECCA for US$305 million in equity value plus US$297 million of debt to US health insurance conglomerate Highmark. Most of the net proceeds of the sale, US$135 million to US$159 million, would be given to Moulin's creditors, Mr Sutton said.