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BUSINESSDESK: Renaissance Corp, which once had a monopoly on New Zealand sales of Apple products, will take legal action against Exeed over unresolved details of the sale of its IT distribution division.
In July, Renaissance shareholders voted to sell its IT distribution division to Exeed, halving the size of its balance sheet.
Exeed took over the supply of Apple, Fuji, Cygnet, Belkin and Ozaki, and acquired all the company's stock, valued at about $2.5 million, goodwill of $2.3 million and $570,000 for fixed assets.
Renaissance will take legal action against Exeed after it withheld $837,373.
The two companies are disputing $400,000 concerning the alleged breach of warranties by Renaissance, sick leave/long service leave, business records and fixed assets.
The funds have been placed in a solicitor's trust account until a resolution is reached.
"Since that time management on both sides have engaged with goodwill," Renaissance chairman Colin Giffney says. "On several occasions we were advised that management had agreed but on each occasion the agreement was refuted."
"Regrettably, Renaissance has today instructed its solicitors to commence legal proceedings against Exeed," he says.
Renaissance shares are unchanged at 12 cents and are up about 26% this year.