Asahi loses access bid

The Federal Court blocked Asahi from accessing privileged documents tied to its purchase of Independent Liquor, preventing the company from trawling through thousands of confidential financial files in its case against Pacific Equity Partners and Unitas Capital.

The ruling is a setback for Asahi because it limits the evidence it can use — Asahi wanted to review large volumes of confidential financial documents to support claims that it overpaid for Independent Liquor.

Asahi alleges the private equity partners lied about Independent Liquor’s earnings when it bought the business in 2011, and it has launched legal action seeking damages for what it says was an overpayment.

Asahi bought Independent Liquor in 2011 for $1.2 billion, and the article reports the difference between allegedly inflated earnings and actual earnings could be as much as $500 million.

PEP and Unitas argue that any loss was due to Asahi’s own failure during the due-diligence process. They say Asahi had access to more than 6,000 financial documents and the opportunity and resources to investigate the business’s earnings before the deal.

Asahi sought thousands of confidential financial documents related to the Independent Liquor deal to back its claim that the company’s earnings were overstated. The court’s decision to block access prevented that review of privileged material.

The parties named in the article are Japanese brewer Asahi, Independent Liquor (the business that was purchased), and the private equity sellers Pacific Equity Partners (PEP) and Unitas Capital.

The case is ongoing. The Federal Court’s ruling restricting Asahi’s access to privileged documents is a significant development, but the legal action has not concluded.