CL-2022-000522 - [2025] EWHC 2739 (Comm)

FACTUAL NARRATIVE

Mr Moore and Mr Kirk, on the one hand, and Mr de Stoop and Mr Rodgers, on the other, had developed a working relationship in the years preceding the events giving rise to this dispute. Mr Rodgers had arranged for RMK UK to rent office space within Euronav’s London premises, resulting in regular contact between the parties.

Prior to the Gener8 transaction, Euronav had engaged RMK in connection with two transactions. The first was a capital raise in 2013, in which Euronav sought to raise US$150 million to refinance an expiring convertible bond (the “2013 Capital Raise”). RMK introduced Euronav to two private equity investors and facilitated the potential raising of the full amount sought. Euronav ultimately required only a portion of the capital from one of RMK’s investors, namely US$25 million, Euronav’s shareholders having agreed to invest the majority of the funds needed. However, Euronav nonetheless paid RMK US$1 million for the introductions.

There was some disagreement about the basis on which that fee was paid. Mr Rodgers and Mr de Stoop said in their witness statements that Mr Rodgers negotiated a fixed fee of US$ 3.5 million, which was US$ 1 million less than the 3% percentage fee RMK had proposed (based on raising capital of US$ 150 million); and Mr Rodgers added that he knew that Euronav’s board would not have looked to enter into an agreement to remunerate RMK on a percentage basis. Mr Kirk stated that there had been an engagement letter and agreement for fee of 3% of the capital raised, which would have been US$ 750,000 based on the US$ 25 million its investor ultimately put in, but that Mr Rodgers asked RMK to invoice for US$ 1 million otherwise RMK would have been underpaid.

The documents indicate that RMK had proposed a fee of 3% of capital raised, including in a draft engagement letter sent to Euronav on 16 December 2013. However, no written agreement appears to have been signed. On 2 January 2024 RMK sent Euronav an invoice for US$ 1 million, which Mr de Stoop replied would need to be approved by Mr Rodgers and himself. Mr de Stoop in cross-examination accepted that Euronav agreed to pay that amount. He appeared to say in cross-examination that there had been an agreed fixed fee of US$ 3.5 million for raising US$ 150 million, but that as only US$ 25 million was needed the parties agreed on a reduced fee of US$ 1 million. Mr Rodgers, in the following somewhat unsatisfactory piece of oral evidence, eventually accepted that a US$ 1 million fee had been agreed:-

“Q. Don't worry about comes later. I am asking you this is what was agreed at the turn of the year would be their fee for the capital raised. Isn't that right?

A.

That's what they billed us for.

Q. That is what was agreed by you with them as the fee for the capital raise, isn't that right?

A. That's what they billed.

MR JUSTICE HENSHAW: You're not answering the question.

A. I'm not answering the question, no, because obviously you'll --

MR JUSTICE HENSHAW: No, you have to answer the question. So try again.

A. I'm sorry. That's what's been agreed.”

Euronav’s original evidence about a US$ 3.5 million fixed fee having been agreed was incorrect, and may well have been a confused recollection arising from the fact that, after the Maersk Tankers deal summarised below, Euronav asked RMK retrospectively to allocate fees of US$ 3.5 million in total to the capital raise.

I do not consider that the capital raise episode sheds much, if any, light on the issues to be decided. Contrary to both sides’ original evidence, it shows neither (a) Euronav agreeing to a percentage fee nor (b) Euronav resisting payment of a percentage fee. Exactly how the US$ 1 million figure was arrived at remains unclear.

The second transaction was a capital raise in early 2014 in relation to Euronav’s acquisition of 15 crude oil tankers from Maersk for US$980 million (“the Maersk Tankers Deal”), including assisting in raising debt and equity capital of US$ 550 million. There was no engagement letter, but Euronav agreed to pay RMK US$10 million for its role in the transaction. It appears the fee was agreed after the event. Mr Rodgers on 6 January 2014 emailed Mr de Stoop saying:-

“I was thinking we could pay three fees.

1.

Common equity raised on their connection;

2.

Mezz raised their connection;

3.

Book runner for whole raise excluding their connections;

4.

The rates for each would differ eg 3% for 1, 2% for 2. And 1% for 3.

Let talk it through tomorrow.

Paddy”

Mr Rodgers accepted in cross-examination that, in this email, he was adopting a percentage approach. It is not clear, however, that that reflected anything discussed between the parties, as opposed to an internal rationalisation by Euronav. Mr Rodgers’ evidence was:-

“Q. And that's because it's simply not true that Euronav would not have approached advisory fees or introductory fees only on the basis of a fixed fee. As is common in the market, you would approach them on the basis of percentage fees, isn't that correct?

A. The -- ultimately it's a question of whether you're going to use the percentage for the purposes of your discussion and internal communication and whether or not you're going to fix nominal amounts in terms of the contracts that you sign.”

On 21 January 2014, Mr de Stoop emailed RMK asking them (for invoicing purposes, and seemingly for Euronav’s own book-keeping purposes) retrospectively to allocate US$2.5 million of the Maersk Tankers deal remuneration to the earlier capital raise:-

“If possible I would suggest the following: Pref invoice increased from $1m to $3.5m (can you produce an invoice dated prior to 31/12 for $2.5m?) related to $150m capital increase Maersk equity would then become $7.5m and we are happy to receive only one invoice for that dated after year end but it must be labelled “in relation to $350m capital increase.”

Mr Moore told Mr de Stoop he was happy with this split. On 5 February 2014, RMK’s invoice for the Maersk Tankers deal was issued in the sum of US$7.625 million. (It is unclear why the invoice was for US$7.625 million rather than US$7.5million.)

Mr Rodgers in his witness statement said that, on reflection, he considered the fee excessive, and the board were particularly annoyed at him about it, but that Euronav had been under a lot of time pressure to get the Maersk deal done. However, in cross-examination he accepted that the fee was agreed after the deal was done, hence not under time pressure; that he had been enormously happy with the transaction and Mr Kirk’s role in it; and that he was happy to agree the fee of US$ 10 million, though it was an enormous amount of money to pay to “two people”.

Again, I consider this episode to shed no real light on later events.

In January 2015, following RMK Capital’s registration as a broker-dealer in the US, Euronav arranged for the investment bank managing its Initial Public Offering on the New York Stock Exchange to include RMK as a co-manager. RMK did not perform any work on the IPO and received no fee: its inclusion was a gesture of support.

Between late 2015 and early 2016, RMK, among others, began pitching the Gener8 transaction to Euronav. Gener8 had been formed in 2015 as the result of a merger between General Maritime and Navig8 Tankers, arranged by a group of hedge fund investors. Gener8’s shares traded at a significant discount to its net asset value (NAV). Mr Rodgers and Mr de Stoop said it was well known that its hedge fund shareholders were seeking a quick investment turnaround and would be interested in an opportunity to exit the investment. That meant there was an opportunity for Gener8 to be acquired by one of the other large tanker operators, and Frontline, International Seaways and COSCO showed interest in acquiring or merging with Gener8 prior to Euronav’s successful acquisition.

Euronav was approached by several advisory firms offering help on a potential acquisition of Gener8 by Euronav. For example, Wells Fargo approached Euronav in April 2016 to express interest in advising Euronav on the potential opportunity, saying that Wells Fargo was “putting together of how the financing might work and look forward to sharing that with you”. Analysts from UBS, Morgan Stanley and later Stifel sent Mr de Stoop copies of models that they had prepared for a Euronav acquisition of Gener8.

RMK similarly invested time creating its own model for the potential acquisition in order to pitch for the work, and a dialogue with Euronav began.

On 16 December 2015 Mr Rodgers emailed Mr Kirk, who was then his main point of contact with RMK, requesting information on the shareholders of Gener8, including details of the individuals and companies that held the major investment shareholdings. Later that day, Mr Kirk provided the requested information to Euronav.

On 14 January 2016, RMK sent a strategic presentation to Euronav regarding the potential acquisition, which at that time was known as Project Silverback but later became known as Project Liberate. Mr Kirk provided Mr Rodgers with vessel value prices for Suezmax tankers on 3 February 2016, which were relevant to the share price for the potential purchase of Gener8.

Mr Bryan Guadagno of RMK on 4 February 2016 sent Euronav a presentation (“on the information [Mr Rodgers] requested”), supplemented by supporting documentation, including reasons why RMK proposed that Euronav acquire Gener8 in a cash and stock (shares) transaction, and information about the advantages of the transaction for Euronav. An updated version of this presentation was provided by RMK on 12 February 2016.

On 23/24 March 2016, Mr Kirk met Mr Stoop in New York, where Mr Rodgers had invited Mr Kirk to an industry event, and they discussed the structure of the potential acquisition.

In early April 2016, RMK had discussions with Gener8 shareholders, followed by calls to Euronav. This included a discussion by telephone between Mr Kirk, Mr Guadagno and Mr Andrew Shohet of RMK and Mr Rodgers and Mr de Stoop on 8 April 2016. Also on 8 April 2016, RMK sent Euronav a further updated version of its presentation, showing the relative NAV metrics for Euronav and Gener8, and the companies’ leverage and share performance. Mr Kirk sent a follow up email the same day outlining RMK’s thoughts on the way forward for the acquisition. On 14 April 2016, Mr de Stoop wrote to Mr Kirk saying, “thanks for keeping the pressure on this file”, in addition to discussing the transaction and modelling questions. On 27 April 2016, Mr Kirk emailed Euronav to congratulate it on its Q1 earnings and provided an updated version of the presentation.

On 6 May 2016 Mr Kirk and Mr Moore met Mr Rodgers and Mr de Stoop in London to discuss details of Project Liberate, including whether the acquisition was of interest to Gener8 shareholders, at what price the acquisition should be pitched, and when a formal bid should be made. Mr Kirk followed up with emails and attachments setting out an acquisition proposal on 16 and 26 May 2016. At some stage during this process, Mr de Stoop requested from RMK a model of the economic combination of Gener8 and the pre-merger Euronav.

Following a further discussion in Athens in early June 2016, on 20 June Mr Kirk sent an email to Euronav setting out ideas about the refinancing of Gener8’s debt, and suggesting a further meeting. On 28 June 2016, Mr Moore emailed Mr Rodgers as follows:-

“Further to our cony just now, we look forward to working with you on this. We started revamping the financial model based on our conversation last week with Hugo at MM. We were intending to get a new version out to you quite swiftly but perhaps it makes sense to have a financial working group call when everyone is ready in order to build in any additional sensitivities.

Otherwise, from a practical perspective we await your engagement terms with your proposal on the sums involved. We do not have any issue with this being a working engagement with ongoing payment structure as opposed to it being a broker-type fee. We acknowledge that you probably wish to reduce the built in fees on what is another transformational — $1.7billion deal for Euronav. We had them in at $17.9m, of which only —$14.5mill was attributed to RMK. If you want to reduce those by a further few hundred thousand, yes Mike will be extremely upset, but I will do my best to manage him.”

Mr Rodgers replied on 1 July 2016, saying:-

“Rich following your rather drole email of the other evening, I am now attaching a draft consultancy agreement for the appointment. Let me have your comments and then we can get working.”