Jafari-Fini vows to appeal as his attempt to win back Chesterton is rejected by the high court
Mohammed Jafari-Fini has lost a high court bid to take back control of Chesterton.
The former Chesterton chairman had tried to bring a claim on behalf of Phoenix Acquisitions, the vehicle he used to buy the company in April 2003, against Skillglass, the Resurge subsidiary that financed his £12.9m buyout.
Last Friday, Judge Rich QC refused to allow the action, saying that the risk of costs to Phoenix meant it would not be in the company’s “best interests at this stage”.
Jafari-Fini had hoped to bring the derivative action following his removal as Chesterton’s executive chairman last December. He is also bringing a personal claim against the company.
Skillglass took over Phoenix’s 86.9% stake in Chesterton after serving demands in October and December alleging “technical breaches” of the loan facility. Jafari-Fini claimed that demands alleging “technical breaches” were invalid.
But on Friday, Judge Rich QC held that, while the demands were arguably invalid, it did not follow that a later demand by Skillglass for payment of a loan instalment due last January wrongfully terminated the contract, as alleged by Jafari-Fini.
Chesterton chairman Graham Robeson said Skillglass was “pleased, but not surprised” by the judgment. “The court’s findings vindicate the steps Skillglass has taken in the litigation commenced by Mr Jafari-Fini,” he said.
However, Jafari-Fini said the judgment did not vindicate Skillglass’s actions. He said: “The judge held that the October and December notices were invalid.”
Jafari-Fini has vowed to challenge the ruling in the Court of Appeal, and said he will “step up the pressure” to regain control of the firm.
On appeal, he will argue that he “had no chance to make the January payment” because he “was not in control of the company”. He insists Phoenix could have secured funds by taking over the lease of Chesterton’s surplus office at Lily Hill House, Bracknell, in return for a £3m reverse premium.
References: EGi Legal News 23/10/04
