AIM-listed company Engel East Europe has had to halt plans to sell its non-core operations in Canada and Germany after a lawsuit was filed by a local property company over the disposal.
The board of Engel East said in a statement this morning that it was ‘keen to clarify that the assets in Canada are currently subject to litigation, which has been brought by a local real estate development and management company and one of its shareholders against certain companies connected to Engel East and Lehman Brothers, its partner in Canada.
‘The Court adjudicating on this matter has imposed certain safeguard orders against the Company's Canadian assets, as a consequence of which the Company is forbidden from disposing of these assets without the approval of the Court so to do.
'At this stage, the Company is unable to comment on any of the likely outcome of the litigation or its duration, or the likelihood of obtaining Court approval to dispose of the assets.’
Engel East Europe is not a defendant.
In January this year Engel East Europe said it planned to discontinue its operations there and sell the assets which are valued at €2.2m (£1.7m).
It said it still intends to sell the assets after obtaining the relevant Court approval.