11 November, 2009 | By Katherine Rushton (BroadcastNow)

BBC Worldwide has triumphed over Woolworths’ liquidators in an appeal case over the value of DVD publishing business 2Entertain.

Deloitte tried to overturn a judgment, handed down from the High Court in August, that allows BBCW to buy Woolworths’ 40% share for a knockdown price instead of the £100m it was prepared to pay before the retailer went under.

The dispute centred on whether the collapse last November ended a licensing agreement between BBCW and 2Entertain, and on BBCW’s right to buy Woolworths’stake in the company.

BBCW, which holds a 60% stake in 2Entertain, argued that Woolworths’ insolvency triggered a contractual clause reverting all rights in 2Entertain’s BBC content back to BBCW, and, because only BBCW is able to exploit the rights, the stake is worth little to any other buyer.

It also argued that it has first right to buy the shares, with the property valued on this basis.

The judge ruled in favour of BBCW on both points in August and the court of appeal upheld the original judgment on 6 November.

A BBCW spokesman hailed the judgment as a “comprehensive and unequivocal validation” of its rights, which were negotiated to protect the BBC’s intellectual property.

“This latest judgment fully upholds the position we have maintained from the outset, and we now look forward to being able to move ahead with taking full ownership of 2Entertain,” he said.

“Our focus has always been on getting the best deal for licence fee payers by ensuring we assess and pay the correct amount for the 2Entertain stake, taking into account the deal we did with Woolworths and a landscape which has changed considerably.”

BBCW also argued that the value of the shares in 2Entertain had been hit by the collapse of Woolworths, which played a vital role in impulse purchases of DVDs, and by the collapse of its distribution arm, EUK, which owed 2Entertain “tens of millions” of pounds.

2Entertain also had to absorb pension liabilities for staff who were members of the Woolworths pension scheme.


Source:
http://www.broadcastnow.co.uk/news/bbcw-wins-2entertain-appeal/5008059.article