Meikles faces lawsuit over debt
Meikles Limited is facing a lawsuit after it failed to finalize a court-sanctioned debt settlement plan with Core Solutions, a consultancy firm the diversified listed company engaged to recover-on the behalf-the money it was owed by the Government.
Core Solutions, which was embroiled in a protracted legal battle with Meikle’s overpayment of consultancy fees since 2015, got a reprieve after the High Court dismissed an appeal by the hospitality giant challenging the sale of some its assets.
Meikles had lodged an appeal against the auctioning of its assets in December last year, arguing the $2,8 million realized from the sale did not reflect its true value.
The auctioned assets included shares owned by the group in TM Supermarkets, Tanganda Tea Co, Tanganda Packers, Thomas Meikles Properties and Meikles Hospitality. The money owed to Core Solutions amounted to about $1,5 million, excluding legal fees.
While Meikles paid the bulk of the $1,5 million owed to Core Solutions, this paper has it on authority that the group is yet to settle outstanding legal fees despite having agreed to do so.
“Meikles is still to pay over $280 000 in legal fees outstanding,” said one source. “While the interbank rate was not available at the time Meikles settled the initial balance, it is arguable that Core Solutions might cite as the term of reference for the claim.”
While no official comment could be obtained from Core Solutions, their lawyers on Monday wrote to Meikles legal representatives, Tendai Biti Law expressing concerns over delays in settling the debt, saying the value continued to erode by inflation.
“We note with great concern that in spite of your client’s undertaking to pay costs of the suit due to ours, payment remains in excess of six months. May we implore you to prevail over your client in ensuring that the matter is brought to finality as soon as possible,” reads part of the letter written by Core Solutions legal counsel.
The payment for consultancy, in terms of the agreement between Meikles and Core Solutions, was due on December 6, 2015, but the later did not pay, leading to arbitration.
Meikles lost and was directed to pay $1,5 million. The decision was upheld by the High Court, Supreme Court, and Constitutional Courts after Meikles challenged the arbitration award.
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