Opinion ID: 211884
Heading Depth: 3
Heading Rank: 4

Heading: Acquisition and financing cost from Ariadne

Text: 44 The trial court awarded Westfed $22.1 million in transaction costs associated with the issuance of debentures and preferred stock to finance the acquisition of Old Western. The government contends that Westfed did not pay $17.5 million of that amount because a foreign investor group, Ariadne, was the actual source of those funds. Ariadne had advanced $14 million to help finance Westfed's acquisition of Old Western, but then failed to honor its commitment to pay the remaining amount owed. After Westfed refused to return the monies advanced, the parties reached a settlement agreement in which Westfed retained the advance plus interest, totaling $17.5 million, which Westfed then applied to the purchase of Old Western. 45 The trial court acknowledged that Ariadne had agreed to finance Westfed's acquisition of Old Western but had to withdraw because of its financial problems. Westfed II, 55 Fed.Cl. at 559. The trial court stated that [t]he evidence presented at trial supports [Westfed's] contention that the $17.5 million from Ariadne is not appropriate as an offset against plaintiff's reliance damages because the money was given to Westfed as part of a separate transaction, in consideration for Ariadne's release from Westfed's breach of contract claim. Id. The government points to no persuasive evidence to undercut the trial court's factual determination here, and therefore we find insufficient reason to conclude it was clearly erroneous. The trial court's judgment refusing to deduct $17.5 million from the award to Westfed is affirmed.