Judge Baister, Lee Manning and Peter Bertram join the Manolete Board of Directors
We are delighted to confirm that on IPO, Judge Stephen Baister moved up to become a Non-Executive Director on the Manolete Board. Stephen started working with Manolete in September 2017. Stephen offers a unique degree of expertise on insolvency law and his contribution to Manolete is extremely valuable. (See Stephen’s article ‘Reading The Law’ below).
Lee Manning joined the board at the same time as Stephen in November. As a past- President of R3 and a former Partner of Deloitte in London, Lee is well-known to most in the TRI community. Lee and Stephen’s presence on the board ensures that we are constantly kept informed of developments in, and the requirements of, our solicitor, barrister and Insolvency Practitioner stakeholder partners.
Peter Bertram joined Manolete in November 2018 as independent Non-Executive Chairman. Peter has held a variety of senior non-executive positions in public companies in security, IT and media. Peter is a Fellow of the Institute of Chartered Accountants and a Companion of the Chartered Management Institute.
Summary of Reported Case Funded by Manolete for RSM UK
(Brewer & Wilson (as Joint Liquidators of ARY Digital UK Ltd) v Iqbal 
EWHC 182 (C)
On 11 February 2019 Chief ICC Judge Briggs handed down judgment in this matter where the successful Applicant joint liquidators were funded by Manolete Partners Plc.
The liquidators claimed that the Respondent, Mr Iqbal, had been negligent or acted in breach of his equitable duty of care or otherwise acted in breach of duty to obtain the best price for assets of ARY Digital UK Ltd (the “Company”) when acting as administrator.
The Company carried on business as a broadcaster, operating 3 channels. To facilitate the broadcasts, the Company acquired Electronic Programming Guides (“EPGs”) by agreement with British Sky Broadcasting Ltd. By April 2011 the Company was insolvent, Mr Iqbal was introduced to the Company in mid to late April 2011 and these discussions led him to believe that the Company would file for administration. Mr Iqbal contacted Edward Symonns about valuing and selling the Company’s assets on or about 19 April 2011 and was appointed as advisor to the Company in or around 6 May 2011. On 19 May 2011 Mr Iqbal filed a notice of intention to appoint administrator on behalf of the Company. On 20 May 2011 Mr Iqbal instructed Edward Symonns to sell the Company’s assets, made a reference to £40,000 agreed with the current management in respect of the EPGs, and stated that if no interest was shown by any third party he would like to conclude the sale on or before 27 May 2011. An advertisement was posted on Edward Symmons website on 20 May 2011 under the heading “Machinery Sales”. The Company’s assets were sold to a connected company, ARY Network Ltd, on 27 May 2011 for £57,000 plus VAT and the sum of £40,000 plus VAT was attributed to the EPGs.
The Judge held that Mr Iqbal had placed too much reliance on the directors to provide a value for the EPGs, approval of the marketing and the timing of the sale and that he had failed to exercise reasonable care and skill in the following respects:
- Failure to obtain a proper valuation prior to sale
- Failure to understand the nature of the asset, the true value of the EPGs and the potential to negotiate with a specialist purchaser which led to the misplacement of an advertisement.
- Taking into account the interests of the connected company, ARY Network Ltd and failing to take account of exposing the assets to a specialist market for a reasonable period.
- Failing to make proper enquiries into the market for EPGs or ignoring such enquiries
- Failing to take specialist advice for a personal in the EPG industry, to advertise in publications or websites to attract purchasers of EPGs (and not plant and machinery) for a reasonable period of time.
In terms of Mr Iqbal’s fiduciary duties, the Judge expanded on v) above and further referred to Mr Iqbal’s admitted failure to act with “single minded” loyalty to the Company as he was also acting in the interests of ARY Network Ltd. The Judge held that Mr Iqbal failed to take account of matters he should have when deciding on the sale of the EPGs, namely the interests of creditors and took account of matters he should not have.
The Judge found that Mr Iqbal failed in his duty of care and was in breach of his fiduciary duties. The liquidators elected to seek a remedy resulting from breach of fiduciary duty, and common law principles of foreseeability and remoteness do not apply to equitable compensation. As the remedy for a breach of fiduciary duty is usually one of an account, the loss is assessed at the date of judgment rather than the date of breach. The Judge assessed the current value of the EPGs and, taking into account an appropriate discount for relevant factors, concluded that £743,750 represents equitable compensation for the breaches of equitable duty. An order was made for payment of £743,750 plus costs.
It is unusual for Manolete to support a claim against an IP, but the conduct in this case was such that compensation to the estate was appropriate and, absent Manolete funding, the legal costs and the costs of both IP and valuation expert witnesses could not have been met. It was not a case of inviting the Court to interfere with commercial decisions with the benefit of hindsight, but the sale of company assets to a connected party without taking the necessary advice on valuation and marketing.
Head of Legal, Manolete Partners PLC