Australia's Co says wins court dispute against JPM

SYDNEY, March 18 (Reuters) - Australia's Consolidated Minerals said on Thursday the Supreme Court of New South Wales has ruled in its favour in a fees dispute with investment bank JPMorgan.

The dispute relates to fees for advising Consolidated Minerals in its A$1.3 billion ($1.20 billion) takeover by Ukranian billionaire Gennadiy Bogolyubov's Palmary Enterprises.

JPMorgan had demanded A$50.8 million in fees but the court awarded it just A$19.25 million, Consolidated said in a statement adding it had already paid the investment bank A$20 million.

(Reporting by Narayanan Somasundaram; Editing by )

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($1=1.083 Australian Dollar) Keywords: JPM/CONSOLIDATED



* Court dismisses JPMorgan claim for A$50.8 mln in fees

* Court says Consolidated only owed A$19.25 million

* Court tells JPMorgan, Consolidated to set final fee



(Adds details)

SYDNEY, March 18 (Reuters) - JPMorgan lost a court dispute over advisory fees relating to a client's A$1.3 billion ($1.2 billion) Australian takeover defence, in an unusual case that exposed what are normally secret investment banking fees.

An Australian court dismissed on Thursday JPMorgan's claim for A$50.8 million in fees from Consolidated Minerals which was taken over by Ukrainian billionaire Gennadiy Bogolyubov's Palmary Enterprises following a three-way battle against Pallinghurst and Territory Resources that drove up its market value by A$840 million.

Justice David Hammerschlag said Consolidated only owed A$19.25 million, which it has already paid, but said the two sides might want to recalculate the final price based on his reasoning.

A JPMorgan spokesman declined to comment on the ruling. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For full court judgement see: http://bit.ly/aipUhd ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

'This is a great decision,' said Consolidated Minerals. 'We can now concentrate on creating value and longevity at the Woodie Woodie manganese mine.'

JPMorgan had demanded the fee for retainer services, base defence fees, incentive fees and expenses for its advisory role in 2006 to 2007.

Under the agreement with Consolidated Minerals, JPMorgan was entitled to an incentive fee equivalent to 3 percent of any increase in offer price, up to 25 percent of the initial offer and 5 percent of any increase in the offer price above that.

The judge backed Consolidated's view that its fee payment should be based on the difference between Palmary's first and final takeover offer.

That was against JP Morgan's view that the incentive fee should be based on the difference between the first takeover offer from Pallinghurst and the final offer from Palmary.

The judge said JPMorgan did not deserve any incentive fees for defending the company against two other competing offers which had helped to drive up the company's share price.

'There was no need for either of them to be repelled or warded off,' the justice said referring to the two losing bids.

The judgement said JPMorgan was entitled to a base defence fee of A$9.56 million, an incentive fee of A$9.53 million and other minor fees, compared to its claims of a base defence fee of A$10.25 million and incentive fee of A$35.79 million.

The trial was closely followed by the investment banking industry, which keeps details of fees very close to its chest and almost at all times resolves such disputes in private.

(Reporting by Narayanan Somasundaram; Editing by Balazs Koranyi)

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