Mishcon de Reya's Insolvency Team and Sports Group obtained a significant victory on behalf of Geoff Rowley and Jason Baker (the Former Joint Administrators of the Force India Formula One Team (in liquidation).
A multi-million pound claim was brought against the Former Joint Administrators by PJSC Uralkali, an unsuccessful bidder who accused our clients of running a biased bidding process, not running a level playing field and allegedly disclosing confidential information (amongst other things).
This Firm had previously acted for the administrators of Force India on the sale of the business and assets of Force India to Racing Point (UK) Limited for £90million and various regulatory and commercial matters concerning the sport's regulators (including the Fédération Internationale de l'Automobile), commercial rights owners (including Formula One Management), team sponsors and drivers. Given this Firm's involvement in the administration process itself, in the litigation, our clients took the unusual step of waiving legal professional privilege in respect of a defined scope of waiver.
The judgment (available here) was emphatic in its findings in favour of our client who the court found was 'an experienced insolvency professional' with 'a good reputation to protect'. Every aspect of Uralkali's claims against our clients was comprehensively dismissed. Mishcon de Reya were described in the judgment as 'a team of experienced and reputable lawyers of high reputation'.
The judgment was particularly interesting in its finding that a duty of care towards potential bidders in an administration should not be imposed on administrators personally and that doing so would be inimical to the single-minded duty placed on administrators to act in the interests of the company’s creditors.
The decision will provide a useful line of defence to office holders faced with litigation or the threat of litigation from third parties (i.e. parties who are neither creditors nor shareholders) whether the third party be a disgruntled bidder or otherwise. More generally, the judgment provides helpful commentary on the scope of the duties owed by office holders and the statutory objectives of an administration.
The Mishcon de Reya team included David Leibowitz, Laura Edwards, Miten Vaghela, Jocelyn Contato, Tom Murray, Natalie Shaw and Matthew Scola.