SCOTRAIL, franchise owner National Express, which has been building its school bus interests in the US, has paid an out-of-court settlement of #15.6m to settle a two-year-old dispute relating to its first purchase in that country.
The payment, which is equal to $24.5m, will be made to Atlantic Express Transportation of New York. The deal, which leaves National Express accepting ''no admission of liability'', circumvents the possibility of a payout of $75m (#50m) or more to Atlantic.
After takeover talks between National Express and Atlantic failed, the UK operator went on to purchase Missouri-based Crabtree-Harmon in the first part of 1998.
Atlantic, which had also been considering a takeover of Crabtree-Harmon, filed suit against National Express in June of that year.
Atlantic maintained National Express used confidential information it supplied during due diligence with National Express as a springboard to acquire Crabtree-Harmon. National Express still contests this assertion, even though it has agreed to the out-of-court settlement.
''While we strongly say we've done nothing wrong, it can be more difficult to prove you've done nothing wrong,'' National Express chief executive Phil White said.
''We had identified Crabtree-Harmon even before we talked to Atlantic, but certain information was made available by Atlantic during the discovery process. They say we used that, and even though we did not, that could be a difficult thing to prove.''
The trial, which was due to begin within the next few weeks, would have been held before a jury in New York. Given the uncertainties of litigation and damages awards, particularly in front of US juries, White said the total payment to Atlantic could have been more than $75m.
''We were playing away from home, so we took the view that it was time to put this behind us and draw a line under it,'' White said. ''We took a review of the situation and decided we didn't want to take a gamble with $75m of shareholders' money.''
The #15.6m payment will be taken as an exceptional charge against the company's results for the six months to June 30. White, whose company has spent #400m on eight US acquisitions, said operations there were performing up to expectations.
Shares in National Express closed 13p higher yesterday at 675p.
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