The settlement resolves part of a lingering conflict over the deal, which was one of the more bizarre transactions to emerge from China’s recent mania for Hollywood acquisitions. The deal fell apart as the Chinese government sought to impose tighter restrictions on foreign investment. Xinke alleged that Voltage had failed to provide adequate documentation to regulators, which Voltage denied.
Voltage sued Xinke and the Zhong Lun law firm, which acted as the escrow agent in the deal, in January 2017, seeking to recoup a $4 million breakup fee. Voltage later took its dispute against Xinke and its affiliate, Wotaiji Capital Management, to the International Centre for Dispute Resolution, the division of the American Arbitration Association that handles cross-border business conflicts.
According to a court filing, the parties recently reached a settlement through the arbitration process, which is subject to a confidentiality agreement.
The civil case against the Zhong Lun firm had been on hold pending the outcome of the arbitration. A judge on Tuesday ordered a trial date for next January.
Zhong Lun contends that the arbitration settlement — to which it is not a party — should resolve the civil case as well. The firm has strongly denied that it acted inappropriately when it returned the $4 million deposit to Wotaiji upon the cancellation of the deal. Voltage continues to press its case that the firm violated its obligations as an escrow agent by ignoring Voltage’s instructions to hold the deposit.