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US giant Lowe’s has accused joint venture partner Woolworths of acting in “bad faith” over failed Masters hardware chain.
Lowe’s has filed an urgent application in the Federal Court of Australia asking them to appoint an independent liquidator to the Masters joint venture company Hydrox Holdings to “oversee the equitable and orderly wind up” of the company.
Speculation is growing that the action may derail Woolworths’ plans to sell off parts of the Masters business to interested parties in three deals, a deal totaling $3 billion.
After suffering a massive financial loss, Woolworths announced earlier this month that the failed Masters chains would be closed by December 11. CEO Brad Banducci said most of the 8,000 employees of Masters will get new opportunities within Woolworths’ other businesses.
Lowe’s stated that “despite every effort to reach a fair resolution with its joint venture partner, Lowe’s has been left with no other option but to seek the guidance of the court to achieve an equitable and orderly wind-up of the Masters business”.
The company further stated that, “Lowe’s also alleges that Woolworths has conducted the affairs of Hydrox in a manner oppressive and unfairly prejudicial to Lowe’s, including by wrongfully and in bad faith seeking to terminate its joint venture agreement and by seeking to exclude Lowe’s from the management of Hydrox”.
Last week Woolworths announced its plans to sell its wholesale Home Timber & Hardware business to Metcash, around 80 Masters sites to a group of property investors and the stock within the Masters’ stores to GA Australia.
However, the planned retreat will only proceed if Lowe’s agrees to the Masters site sales. After finalising the costs incurred in closing the chain, Woolworths hopes to recoup $500 million.
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