Oak considers council compensation claim

OAK Holdings could pursue a compensation claim against Rotherham Metropolitan Borough Council following the loss of a management contract.

Rotherham Council pulled the plug on the short term lease and associated management agreement under which an Oak Holdings subsidiary operated Rother Valley Country Park in October.

Oak, whose shares on AIM were suspended following the contract loss, said it had taken legal advice about whether it might be entitled to compensation from the Council over the issue.

The amount of the claim for the loss of the contract, which was Oak’s primary source of revenue, is not yet certain.

The termination of the Rother Valley contract was the second time the Council had made a decision affecting the company, following the collapse of Oak Holdings’s plans for the YES! Project, which would have seen Europe’s largest leisure and convention resorts built in South Yorkshire.

Meanwhile, Oak today said it had secured loans from a group of lenders as it was not generating enough working capital to meet its ongoing liabilities.

In total, Oak has borrowed more than £240,000 from the group of lenders, led by Yorke & Harte, which is still outstanding.

Oak said it was “exploring opportunities to stabilise the company and to provide the company with a new strategic direction including the acquisition of additional business interests.”

It said it was currently considering two potential opportunities. Oak’s shares are to remain suspended.