[adhoc]: JoWooD filed lawsuit today
Vienna, Austria, 5 January 2011; Vienna Stock Exchange listed JoWooD Entertainment AG today filed a law suit against KOCH Media GmbH demanding payment of an amount of EUR 2.36 million plus interest.
JoWooD asserts that the accounts receivables, which were contributed by KOCH Media GmbH as an in kind capital contribution in the course of JoWooD's capital increase in January 2006, were overvalued: In that capital increase JoWooD had issued a total of 6.4 million new shares to KOCH Media GmbH for an aggregate issue price of EUR 6.4 million. However, the accounts receivables contributed by KOCH Media GmbH in exchange for those newly issued shares had, according to calculations made by JoWooD and confirmed by an accounting firm, a value of only EUR 4.04 million. In its law suit filed with the Commercial Court Vienna, JoWooD therefore claims an amount of EUR 2.36 million (plus interest) representing the difference between the aggregate issue price of the newly issued shares and the value of the contributed accounts receivables. JoWooD's claim is based on the Austrian corporate law principle according to which any person that contributes assets to a corporation by way of a contribution in kind and receives newly issued shares in exchange therefor shall be liable for any shortfall in the value of the contributed assets irrespective of fault (Differenzhaftung des Sacheinlegers). With a view to JoWooD's strained financial situation and based on corporate law considerations, the company's management board today decided to file the law suit in the company's and its shareholders' interest.
Despite the uncertainties that are always involved when filing a claim in court, JoWooD believes that its claim is justified. JoWooD expects that a final court decision will be rendered only after tedious proceedings that could last for several years. The outcome of the proceedings will not affect the effectiveness of JoWooD's January 2006 capital increase against contribution in kind.
