You are using an older browser version. Please use a supported version for the best MSN experience.

Legal action over Woolworths' Masters exit

AAP logoAAP 29/08/2016 Petrina Berry

Woolworths says it became aware today that its US partner in the failed Masters hardware business had gone to court seeking orders to change how the business will be wound up.

US retailer Lowe's has begun Federal Court action against Woolworths over Masters, lodging a motion accusing the supermarket giant of wrongfully attempting to terminate the joint venture (JV) formed by the pair in 2009.

"Woolworths has engaged in oppressive conduct, including by invalidly and in bad faith attempting to terminate the JV," a statement from Lowe's said on Monday.

Lowes is asking the court to appoint a liquidator to oversee the wind-up of Masters.

The statement said Lowe's was left with no option but to take the matter to court "to achieve an equitable and orderly wind-up" of Masters.

Woolworths, in a statement on Monday afternoon, said it became aware today of an action brought by Lowe's but had not yet been served with any documents on the case.

Lowe's owns one-third, Hydrox Holdings, the company created with Woolworths to run the Masters joint venture.

It also accused Woolworths of seeking to exclude Lowe's from the management of Hydrox.

Woolworths announced on Wednesday that it will shut all Masters stores by December 11, a day before it posted a $1.2 billion full-year loss that was driven by heavy writedowns on its disastrous foray into hardware.

It said Home Consortium, which includes the companies behind retailers Spotlight and Chemist Warehouse, had bought 61 stores and 21 development sites with plans to convert the Masters buildings into shopping centres.

Woolworths said the transactions, including the sale of its Home Timber and Hardware business to Metcash and clearance of Masters' inventory by another company "are proceeding as announced'.

Lowe's is listed on the New York stock exchange and owns home improvement chains in the US, Canada and Mexico.

image beaconimage beaconimage beacon