Moby sues asset management firms over ‘unlawful takeover attempt’

Italian shipping company Moby S.p.A. has filed a lawsuit against a group of U.S. and European asset management firms claiming they engaged in a campaign to take over Moby.

The lawsuit was filed on February 22, 2021, by Quinn Emanuel Urquhart & Sullivan, on behalf of Moby, in New York State Court in Manhattan.

 The defendants include New York-based Sound Point Capital Management, as well as UK-based Aptior Capital LLP, BlueBay Asset Management and Cheyne Capital Management (UK).

The lawsuit alleges that over a period of 20 months, the defendants engaged in a campaign aimed at ‘unlawfully assuming control over the nearly 40-year old company’ and filing a ‘baseless petition’ seeking Moby’s involuntary bankruptcy.

The Bankruptcy Court in Milan dismissed the petition as being without merit.

Moby claims that the said companies prevented Moby from consummating a deal with a Danish shipping company that would have netted approximately €75 million in revenues, allowing the Italian ferry owner to substantially reduce its debt.

To remind, in September 2019, DFDS reached an agreement with Moby to acquire two ferries, Moby Wonder and Moby Aki, for deployment on the Amsterdam-Newcastle route.

In turn, Moby was supposed to acquire the two passenger ferries operating on Amsterdam-Newcastle, King Seaways and Princess Seaways.

The agreement was expected to be completed in the second half of October 2019 but Moby was not been able to meet the delivery terms of the agreement. 

“In addition, the defendants have lodged false allegations against Moby and its management (including regarding alleged mismanagement of the company), thereby impugning a storied name in Italian shipping,” the lawsuit claims.

In or around mid-2019, the asset firms and their affiliates bought, together with certain other investors, approximately €125.43 million worth of bonds for approximately €37.6 million, Moby said.

As informed, the group’s bonds were guaranteed by €900 million worth of assets belonging to Moby and Compagnia Italiana di Navigazione S.p.A., Moby’s main subsidiary.

“The defendants’ motivation is clear: to assume control of Moby’s assets, worth over €918 million, for approximately €37.6 million,” Moby said.

As a result of the said developments, Moby was forced to file, in June 2020, a petition for a court-supervised restructuring procedure with the Bankruptcy Court in Milan.

“The defendants continue to prevent Moby’s restructuring, including by repeatedly rejecting proposals that have offered up to a five-fold return on the Ad Hoc Group’s original investment,” the company added.

“Certain defendants traded Moby’s bonds despite being prohibited from doing so because the Ad Hoc Group obtained from Moby confidential, non-public information regarding Moby’s finances and operations.”

Moby said that the said activities were causing its employees, customers and partners added uncertainty.

Through the lawsuit, Moby is seeking to obtain recompense for the hundreds of millions of dollars in losses it has suffered, as well as punitive damages.

Moby and its group of companies own a fleet of passenger and freight vessels which had a market value of approximately €1 billion prior to the pandemic.