Aerospace firm Hampson Industries has been handed a New Year financial boost after it settled a long-running dispute with the former owners of two American firms it bought.
The Brierley Hill-based firm has agreed a settlement with Randal and Kimberly Bellestri of almost £1.7 million after claiming the pair, who sold their stakes in two companies to Hampson, were engaged in “misappropriating and treating as their own private property” the assets and funds of the firms after the deal went through.
The dispute surrounded Michigan-based aerospace tooling firms Odyssey and GTS and goes back to 2008, when the deal was first reached.
The deal comes at the end of a tough year for Hampson, which has seen profits fall and was itself forced to pay £1.5 million in a legal settlement after a judge deemed a £3.1 million deal to sell ailing car parts firm Erlson Precision Holdings was “fraudulent”.
Hampson said it was satisfied with the agreement reached with the Bellestris and the Randal Bellestri Revocable Living Trust, which begins with an immediate cash payout, after an out-of-court agreement was struck.
In a statement, the group said: “The Bellestris have agreed to pay to certain Hampson subsidiaries an immediate cash amount of $2.6 million, apply future rent reductions on properties leased by the Bellestris to Hampson and to withdraw all outstanding counterclaims against the company.”
Hampson bought Odyssey and GTS in May 2008 from the Bellestri family in a deal which saw it become the largest independent manufacturer of tooling systems for composite aero structures in the world.
The writ filed in Michigan detailed claims that the Bellestris exploited their positions of authority at the companies to “misappropriate” millions of dollars of the assets as well as engaging in unapproved “self-dealing” transactions at the companies’ expense.
These include allegations that Mr Bellestri misappropriated more than $1 million from Odyssey’s scrap metal sales by taking payment for it in cash and keeping it for his personal use.
The writ also claims that the Bellestris used around $500,000 of Odyssey and GTS’s money to pay for their own personal expenditure, alleging that staff paid through the companies’ payroll carried out domestic work such as housekeeping, childcare and gardening.
It claims staff working for the Bellestris were treated as Odyssey employees, with some clocking in and out using a machine at the Bellestris’ home.
After the acquisitions by Hampson, the two continued as senior employees at the firm until July 2009, and the allegations relate to time when they were still employed by Hampson.
Hampson said the settlement would not have a material impact on profits, but would help to reduce its debt pile.
It comes less than six months after the firm paid £1.5 million to Erlson Precision Holdings, and agreed to contribute to its legal costs, after it was found guilty of deceiving Erlson in the High Court in London earlier this year.
Hampson’s former chief executive Kim Ward kept quiet about a key customer being on the brink of deserting subsidiary Hampson Precision Automotive before selling to the group of investors led by Midland industrial heavyweight David Grove in 2010.
In a very rare step, the judge opened the way for Erlson to hand back the Lancashire-based firm to Hampson and claim their money back, with interest.
The group saw adjusted pre-tax profits fall to £400,000 in the six months to September 30, compared to £1 million in the first half of last year, and made a pre-tax loss of £31 million on a statutory basis, before taking into account restructuring and rationalisation charges.
Revenue fell by more than 13 per cent over the period, to £76.7 million but chief executive Norman Jordan – who replaced Mr Ward – said the group was well-placed.