Boral to fight $700m lawsuit by former Krestmark windows boss
Boral says a $700m lawsuit by the former boss of a US windows business is designed to distract from his own conduct.
Boral will vigorously defend a $US450m ($686m) lawsuit filed by the former boss of a US windows business it acquired and said the "exorbitant damages" claim was designed to distract from his own conduct and Boral's own legal claim against him.
The Australian on Wednesday revealed Billy Robinson, the majority owner of the Krestmark windows business, launched the massive counterclaim against Boral after the Australian building materials giant had filed its own lawsuit alleging the Texas businessman had breached a non-compete clause once the deal had settled.
Boral confirmed it had been in litigation with Mr Robinson since October 2018 but said the counterclaims made by the Texan businessman held no merit.
"We believe he has asserted an exorbitant damages claim in order to gain headlines and distract from his own conduct and Boral's claims," a Boral statement to the ASX said.
"The company vigorously defends Robinson's allegations and is actively defending the Robinson claims and pursuing its claims in court."
Krestmark was bought for $US240m in August 2016 and Boral assumed control of the company three months later after landing a $US2.6bn takeover of Headwaters, which had originally purchased the windows company.
Boral had originally opened talks with Headwaters in July - a month before the Krestmark transaction - leading Mr Robinson to believe he sold his business for less than its fair market value price as part of a "conspiracy" between the two companies that ultimately merged.
Boral said Mr Robinson is seeking to bring claims against Headwaters Incorporated, Boral USA, Boral Industries and Boral Limited despite the fact it had no ownership interests in Headwaters until May 2017.
It noted the court had to date rejected Mr Robinson's attempts to have the Boral case against him dismissed.
The lawsuit represents a further distraction for Boral after a financial scandal stemming from its US windows unit was disclosed in December.
Its long serving boss Mike Kane is due to depart in August and analysts have flagged the possibility of writedowns at its US business.
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