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New Hope warns investors over second trip to the High Court

Business

The Wiggins Island Coal Export Terminal continues to dog New Hope Group which has told investors the case is heading to the High Court.

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It’s the second issue heading to the High Court for the company which is also being pursued by activist group Oakey Coal Action Alliance in a case over the controversial Acland coal mine expansion. OCCA  is seeking leave to appeal to the court in a case to be heard next week and New Hope has separately confirmed it is pursuing the group for $700,000 in court costs.

New Hope has previously won court cases in the NSW Supreme Court over whether it is liable for the debt of Colton Coal and Northern Energy in relation to WICET under a deed of cross guarantee. Both Colton and NEC collapsed and went into administration last year with debts to WICET of more than $130 million.

New Hope said yesterday the High Court had advised it that it will hear the special leave applications of WICET and the liquidators of NEC and Colton.

“If special leave is granted and the appeal is successful, the company will be exposed to a liability under the deed of cross guarantee of approximately $155 million,” New Hope told investors yesterday.

“The company has been successful in defending the claim at first instance and on appeal and continues to deny this claim.

“If WICET and the liquidators are unsuccessful in their application for special leave to the High Court or unsuccessful in any appeal to the High Court, the company considers it likely that liquidators may seek to pursue any alleged potential claims against the company or the former directors of NEC and Colton Coal which are the subject of their current investigations.

“The liquidators have continued their investigations into NEC and Colton Coal to determine whether there are potential claims that exist against the company or the former directors of NEC and Colton Coal, including whether NEC and Colton Coal were trading whilst insolvent.

“The liquidators allege that the value of the potential claims may be in the range of $150.2 to $168.3 million.

“No proceedings have been commenced with respect to these potential claims and limited information has been provided to the company for it to assess the basis for the Liquidators to make these potential claims.”

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