IMPALA Platinum (Implats) has been awarded $16m (R218m) by a court in Pennsylvania after it won a case of fraudulent transfer relating to the insolvency of recycler A-1 Specialised Services and Suppliers (A-1) – an important verdict ahead of a possible larger recovery.
The case is the US iteration – required as A-1 is based there – of an earlier verdict about 12 months ago in which by the London Court of International Arbitration ruled in favour of Implats.
The full claim is $200m although it’s considered unlikely that an award of this scale will be made considering the insolvency of A-1 and the fact that Implats is one of several of the US company’s creditors.
“After a challenging and lengthy legal process, we are pleased to recover some of the money that we believe was unlawfully transferred out of A-1 ahead of our claims and we feel vindicated by the outcome of the legal process,” said Brenda Berlin, CFO of Implats.
In terms of the dispute, A-1 failed to meet a contract to supply Impala Refining Services (IRS) with metal. This was following the slide in platinum group metal prices after the world economic crisis in 2008.
In terms of the contract, Implats paid an advance to A-1 for recycled platinum which Implats refined at IRS and then sold into the market. The balance of amounts due to A-1 were paid after revenue was earned by Implats.
However, the decline in metal prices after 2008 meant that Implats began to overpay A-1 in terms of its advances – a situation the sides attempted to remedy by increasing the volume of metal from A-1 to Implats. The problems really began when A-1 failed to deliver more metal into the contract.
At the time, Implats took a R212m initial impairment, but it eventually wrote down the whole contract for about $200m whilst deciding to take the matter to court. The dispute was first filed with the Pennsylvania Eastern District Court in May, 2013.
Implats later opted for arbitration which was then heard in its favour by the London Court of International Arbitration in December, 2015.
