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Italy's RCS says it may win damages in dispute with Blackstone after ruling

27 May 2020, 02:55

Milan's Arbitral Tribunal has judged that the contracts over the sale of Italy's RCS headquarters to Blackstone in 2013 were valid but found that the purchaser's behaviour may entitle the Italian publisher to compensatory damages, RCS said on Tuesday.

MILAN: Milan's Arbitral Tribunal has judged that the contracts over the sale of Italy's RCS headquarters to Blackstone Group Inc in 2013 were valid but found that the purchaser's behaviour may entitle the Italian publisher to compensatory damages, RCS said on Tuesday.

The case centres on the ownership of RCS's historic headquarters in central Milan, which Blackstone bought from RCS for 120 million euros (US$131.71 million).

RCS, owner of newspaper Corriere della Sera, launched arbitration proceedings in Milan in 2018 to nullify the sale, saying Blackstone took control of the headquarters at too low a price, while RCS faced financial difficulties. It asked that the transaction be annulled.

Blackstone in turn has accused RCS of falsely claiming that it still owns the property and of improperly blocking it from selling it to Germany's Allianz SE .

The U.S. investment firm filed two lawsuits in New York, one against RCS and the other directly against RCS's chairman and controlling shareholder, Urbano Cairo. They were put on hold last year pending the outcome of the arbitration in Italy.

The Arbitral Tribunal ordered two expert witnesses to report separately on the condition of RCS in 2013 and on the market value of the property, the Italian company said on Tuesday.

This is a partial and nondefinitive decision and the arbitration proceeding continues, RCS added in its statement.

A Blackstone representative said the company was "pleased that in this ruling, the arbitrators have dismissed the overwhelming majority of RCS’ claims, and have confirmed the validity of the contract in which RCS sold the building in 2013."

The sale followed a year-long, fully transparent auction process, it was approved by RCS’s board and auditors, and was supported by a leading Italian bank, Blackstone said, adding it will continue to seek "compensation for the meaningful and growing damages caused by RCS."

(US$1 = 0.9111 euro)

(Reporting by Claudia Cristoferi in Milan; Editing by Gavin Jones and Matthew Lewis)