Think confirms legal proceedings commenced against vendor of purchased centre

Think Childcare Ltd have today confirmed that a wholly owned subsidiary has issued legal proceedings in the Supreme Court of Victoria against the vendor of a child care service acquired by the company in August 2017. 

 

The vendor concerned is not one of Think’s current incubator partners. 

 

In the proceedings LEA Childcare Services Pty Ltd (LEA), the wholly owned subsidiary of Think Childcare, has alleged that, among other things, the owner of the service to be sold breached warranties including in relation to projected occupancy levels. 

 

A warranty is a key element of a business sale agreement and acts as a type of promise the seller of an item makes to the buyer. Should the “promise” prove to be false the buyer has grounds to sue for breach of contract. 

 

Think has included in the proceedings as defendants the sole centre director and an employee of the vendor. 

 

Think also acknowledges that the reduction in value of the service that has accrued since acquisition has been fully provided for in Think’s audited and reviewed financial statements. 

 

The company will make no further comment on the proceedings until they have concluded.