21 Dec 2010

Out-of-court settlement reached over Formica

2:45 pm on 21 December 2010

An out-of-court settlement has been reached between an American private equity firm, Cerberus, and Fletcher Building over the latter's purchase of Formica in 2007.

Fletcher Building had agreed to pay Cerberus nearly $70 million to implement five cost-saving initiatives at the laminates manufacturer.

A dispute arose over the achievements of three of the initiatives, and Fletchers withheld almost $30 million of the money.

As a result of the settlement announced on Monday, $16 million in payments held in escrow for two initiatives will be returned to Fletchers, while Cerberus will receive $8 million.

No further payments will be made by either party and all claims and counter-claims have been terminated.