Sugar and building products business CSR Ltd
(ASX:CSR) yesterday began its battle to try and convince the Federal Court that it will still be able to meet its asbestos liabilities if the demerger of its sugar and renewable energy business goes ahead.
In February the Federal Court ruled against CSR’s proposed shareholder meeting to vote on the proposed demerger.
In a Fairfax report this morning CSR’s lawyers have apparently told the Federal Court that not even a breach of its banking covenants could prevent the company from honouring its asbestos commitments if it split its operations.
The concern that covenants may be breached was raised by the Asbestos Injuries Compensation Fund in pre-trial submissions.
In another blow to the company there are reports that CSR is being accused of running an alleged blood-plasma cartel by US Mayo Clinic who claims to have lost millions of dollars.
The Age newspaper says Mayo Clinic has lodged a complaint with the US District Court alleging that a secret conspiracy existed to force down supply, inflate prices and eliminate competition.
CSR posted a loss of $326.5 million for the year to March 30, 2009.
