Broking house Findlay Securities its taking its former client Fairstar Resources to court over the non-payment of a $4.5 million fee that Findlays argues it is owed from the controversial takeover attempt of Golden West Resources.
The action in the WA Supreme Court is an important one for Findlays, now under control of Otto Buttula. The broking firm reported a net loss of $3.3 million for the last financial year, and revenue from its corporate advisory activities was just $2.3 million after it threw all its resources into the Fairstar bid.
Findlays was working on a base fee of $25,000 and a success fee of around $4.6 million, according to the original bid documents, if it got its client to 90 per cent of its target.
Fairstar failed to gain control of Golden West, but Findlays is believed to be arguing that because the bid was declared unconditional then it is still deserving of the success fee.
Fairstar denies it has any liability to Findlays at all.
FAS Price at posting:
11.5¢ Sentiment: Sell Disclosure: Not Held
