Bank Restaurant Group plc, owner of restaurant chain Fish! and fashionable London restaurants Bank and Zander, is suing solicitor Pinsents for damages of more than £600,000.
BRG claims that when the company was floated on the AIM of the London Stock Exchange, the law firm negligently failed to warn that the agreements did not allow it to buy the assets of companies that owned restaurants free of debt. To the contrary, the group became responsible for ongoing and future debts under finance agreements.
The claimant also contends that Pinsents failed to warn that the agreements were inconsistent with the share prospectus, and that the purchase price of Bank, Bank Birmingham and Zander restaurants was £550,000 more than the expected £10.25m.
BRG was established on 29 June 2000, following a decision by directors that the Bank restaurants could be better exploited in an independent company. It was intended that the group would acquire the assets of Bank, Bank Birmingham and Zander, as well as develop the Fish! restaurant chain. The purchase was to be funded by the sale of 49,499,480 shares on the AIM, at a total cost of around £8.5m, together with a £3m overdraft.
Pinsents, then known as Pinsent Curtis Biddle, was retained as solicitor to advise on the purchase of the restaurants and the sale of the shares. The firm also advised on the prospectus for the placing of shares on the AIM.
The group maintains that, as a result of the firm’s negligence, it has suffered losses of £90,097.62, the balance outstanding after the application of accruals and prepayments in accordance with the prospectus, and £556,985.31, the instalments due under the terms of finance agreements. It believes that the solicitor’s negligence also resulted in the prospectus overstating BRG’s assets, and is seeking an indemnity against any claims that might arise from this.
References: PLS News 13/5/03
