The collapse of a CHF3.4 billion (€2 billion:) property deal in Europe has turned nasty with a Swiss retail holding company beginning legal proceedings against the consortium of buyers.
Swiss company Jelmoli Holding said in a statement published on its website that it has commenced legal proceedings to “enforce its right for specific performance of the purchase agreement of July 31, 2007 relating to its real estate portfolio.”
In the statement, the Swiss company claims a decision by Blenheim Properties, Delek Global Real Estate and Delek Belron International to withdraw from the contract is “without basis in the purchase agreement” and alleges breach of contract.
“Based on legal advice from various jurisdictions, Jelmoli Holding has instructed its lawyers to commence legal proceedings against the purchaser consortium. The preparations will be completed shortly,” it said.
The legal action comes after the Israeli –led consortium pulled out of a deal to acquire a package of Jelmoli-owned properties in October. At the time, the purchasers issued a statement blaming “the change in, and continuing uncertainty of the global commercial property market.”
But Jelmoli has now reacted to that decision by suing the consortium for the entire headline price plus interest due under the purchase agreement.
“The purchasers’ refusal to close marks an event of abuse that is unheard of in Switzerland,” said Jelmoli.
A spokesperson for the consortium said it was aware of the statement on Jelmoli’s website but added: “The consortium has not received any notification of legal proceedings from Jelmoli and when we do we will respond accordingly.”