A £100m lawsuit between former partners in the Gadget Shop high street chain has been thrown out of court.
The High Court dismissed a Companies Act petition brought by Peter Wilkinson against his former partners, Scottish businessmen Sir Tom Hunter and Chris Gorman.
Mr Wilkinson claimed that he and another partner, Jon Wood, had been unlawfully cut out of a deal to buy greetings card company Birthdays.
Gadget Shop collapsed and its shares are worthless, and Birthdays was eventually sold on at a loss.
But Mr Wilkinson demanded that Mr Gorman and Sir Tom’s company West Coast Capital (WCC) should now be ordered to purchase his Gadget Shop shares at their August 2003 value, when Birthdays was purchased by WCC.
He also argued that the share price should be based upon what the value of the shares would have been at that time had Birthdays been purchased by Gadget Shop – creating a combined business – rather than being purchased by Sir Tom and Mr Gorman through WCC.
However, Warren J said that Mr Wilkinson had rejected an out-of-court settlement offer that would have given him “everything that he could have hoped to achieve”.
Therefore, even if Mr Wilkinson had established the allegations that he made against his former partners by showing them to be in serious breach of fiduciary duty in court, his petition would still have failed.
The judge said: “The rejection of the offer eliminated whatever prejudice there might have been.
“Even if that is to go too far, it removes any reason that there might be to adopt a valuation date in August 2003 rather than a current valuation – were it appropriate to make a share purchase order.”
References: EGi Legal News 21/12/05
