Mirae Asset wins U.S. lawsuit against China’s Anbang on scrapped $5.8 billion hotel deal

South Korean investment bank Mirae Asset Daewoo Co Ltd and affiliates won a U.S. court case against Anbang Insurance Group, a court document showed, after Mirae scrapped a $5.8 billion deal after the start of the pandemic to buy 15 U.S. hotels from Anbang.

The case in Delaware, where many companies are registered, could set a precedent for deals that have seen valuations drop since the COVID-19 pandemic, as buyers no longer want to buy assets under the terms of agreements reached before.

A consortium led by Mirae agreed last year to buy the hotels from Anbang, which had been selling some of its overseas assets after the Chinese government took control of the troubled insurer in 2018.

But Mirae did not close the deal on the scheduled April 2020 date, saying that Anbang’s representations and warranties were inaccurate and failed to satisfy conditions, which led Anbang to file the suit saying Mirae must fulfil its promised payment, the court document showed.

The Delaware Court of Chancery, presided by Vice Chancellor Travis Laster, found that the Anbang company that owns the hotels made extensive changes to its business because of COVID-19, such as employee layoffs, furloughs and closing amenities.

This led to a failure to meet a condition that business be “conducted in the ordinary course of business” and allowed Mirae to terminate the agreement, the court document said.

Mirae said in a regulatory filing on Tuesday that depending on whether the plaintiff appeals, it will respond through its legal representative.