BL-2022-002117 - [2025] EWHC 2794 (Ch)

The Claimants’ pleaded case seeks the sale proceeds that they would have received had the Trilantic Acquisition completed, said to comprise (i) £26,752,979 being the “Net Cash Consideration” as defined in the SPA which would have been immediately received on completion, and (ii) a “lost … chance of converting” £10,271,389 in “roll over loan notes”:

There are discrepancies between the cash sums pleaded and particularised and the sums the Claimants say in a table in their Closing Submissions are disclosed by the SPA. The most significant discrepancy is in respect of Peter Marples where instead of the pleaded sum of £6,379,962.07 being payable on completion, there was Net Cash Consideration of £16,942 with the remaining sums being used to discharge director’s loans or debts agreed as part of the transaction, as well as sums being held on escrow pending audited accounts and in respect of tax liabilities. The terms of these escrow accounts are not clear because the relevant documentation, such as the Tax Covenant, is not available. There is no pleaded claim for these elements of deferred cash consideration and, in circumstances where the company became insolvent in 2018, there is uncertainty as to whether these elements would have benefitted Peter Marples and what value should be placed upon them. There were further significant sums alleged to form part of the cash consideration for Sarah Marples and Lee Marples which have not been pleaded.

In respect of the pleaded claim for the Net Cash Consideration in respect of Peter Marples, the Claimants have only proved on the balance of probabilities that he was expected to receive £16,942 immediately on completion. Of the pleaded claim for Net Cash Consideration of £26,652,979, the Claimants have therefore only proved on the balance of probabilities that the amounts immediately payable on completion would have been £20,289,958.93.

As for the rollover notes the position is even less clear. No rollover loan note documentation is available so as to be able to assess its terms as to what was payable and when. The Trilantic ‘revised offer’ appears to suggest that the total contingent amount payable to the shareholders was to be £12m, and that it was to be subject to a variable contingency based on the Company achieving revenue from non-levy activities of at least £85m in 2017/18 and 2018/19. That target was aggressive, significantly in excess of the non-levy projections in the Trilantic business plan which Trilantic had said were too ambitious and highly unlikely to be achievable. The management team acknowledged the target would be a “significant challenge to meet”. The Company’s actual non-levy revenue was in the event far lower (approximately £21.6m in 2017/18). In their written closing submissions the Claimants tried to extrapolate from a draft fund flow document which had been prepared at the end of November 2016 that the Marples family (excluding Lee Marples) were intended to receive some £9,319,379 in “owners rollover notes” in addition to their share of contingent rollover loan notes with Lee Marples receiving “management roll over” loan notes. The Claimants acknowledge that none of these figures match or reconcile with the SPA, or perhaps more pertinently, the pleaded claim for £10,274,539. While they say the pleaded claim is for these owner or management rollover notes, they continue to face the insurmountable obstacle that there is no evidence at all of the terms of the owners and management roll over notes and in what circumstances they would have paid out. Peter and Lee Marples gave no evidence about them. There is no evidence, for example, that the loan notes would have been paid before the company became insolvent.

The Claimants have failed to prove the pleaded claim to a lost chance to realise loan notes.