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

The draft provided for total potential fees of US$ 500,000 structured as follows:-

“4.1

… the Company shall pay to the Consultant a fixed fee as follows:

(i)

USD 50,000 upon delivery of the model in its current iteration;

(ii)

USD 50,000 upon completion of the model and formulation of the first draft bid document;

(iii)

USD 50,000 upon submission of the bid;

(iv)

USD 100,000 upon acceptance of the bid by the shareholders of Gener8 Maritime Inc.

4.2

The Company may, at its own discretion and in the event of a successful completion of the contemplated transaction, pay a success bonus to the Consultant in the amount of USD 250,000.”

Mr Moore replied by email on 3 July 2016 indicating that the proposal was not attractive to RMK:-

“The proposal as you have presented is not of interest to us. Effectively you have requested 3rd party excel support. This is not what we do. The value of our work as you know and as you have seen is greater than that. There are plenty of out-of-work bankers you could hire to work up a financial model — although given its required level of complication and detail they will not do it for the price you've proposed even if they can get up to speed.

I would actually ask you to have a re-think of what is happening here. The proposed purchase is not a s&p deal buying a bunch of vessels. You know that and, as you said to me last month, there is a lot to do here and a lot of personalities to deal with, sensitivities and plates to spin with the funds as well as with the likes of Peter G and the Navig8 guys who are definitely not going to just roll over — bear in mind we know Nick Busch and his team well. So we're lost as to why you propose to engage us on such a basic basis.

The volume of work here is huge, we can help there, but aside from that remember that whilst some of these funds are in your company RMK deal with them almost every day. We know they are not always going to want to talk to you or Hugo, so whether you like it or not, they will call us and will want to sound out with us and work on points with us they probably find difficult to articulate directly to you. That's the point of an intermediary who knows the market and why people hire advisors on deals 10x smaller than this, let alone this as a $2.6 bill deal.

It's not my place to say it but Management and the Board do have a fiduciary responsibility to shareholders, particularly given the size and scope of this Transaction. I assume that draining management time over what could easily be a 6 month process is not an efficient use of internal resources, considering your day-to-day is running the largest tanker company in the world.

Using RMK as a proper advisor under whatever engagement we end up on, the cost is back-ended on success only and is negligible compared to the overall size and the results. So fundamentally with the build-up work we have done and the information we have been exchanging with the funds to help bring them up to speed, the comfort they have with us and the back-ended nature of the cost, we would assume that you, the Board and shareholders would welcome the hiring of RMK and make use of our full scope of abilities.”

Mr Rodgers responded on 4 July 2016 saying:-

“This draft agreement was not sent to you out of the blue but only after what I thought was a reasonably long conversation with Richard. Let me restate some of those points.

Your comment about fiduciary duty is a[p]posite. Unlike the transaction we previously did, Euronav now has no back stop vote in an EGM to approve a transaction. This will not be OK'ed by Peter and Marc. A fair value opinion will have to be given to the board, which they will refer to in recommending the transaction to shareholders. This cannot with any credibility be provided by RMK. It will necessitate a major US bank. This is even without any equity placement by Euronav.

Debt may be a necessary feature as will be negotiation with certain banks so an advisor with debt issuance capacity will probably be needed. Citi, Calyon, DNB or SEB all have capability and very good connections in Korea and China.

Valuations of vessels have already proven an issue as you requested us to obtain desk top valuations from a credible ship broker rather than VV, but who, Clarksons Platou? Mcquilling Jones? Arrow Seaport, Platou, Fearnleys. I am sure you get my point yours is becoming a crowded space.

All of these organisations starting with the bulge bracket firms, through the debt providers down to the brokers, believe that they can offer the skills to close a transaction like this on their own. Nearly all of them have pitched this deal and provided valuation metrics and fleet value comparisons. To some extent they may be right and if we choose one we will pay once. We believe a more selective approach may be to put a team together using several firms, but not paying several times!

We have worked well together in the past and think you can add value. I think our dialogue would be more constructive if you take the time to look at the a[g]reement sent to you and mark it up with changes you would like and then we can see how far apart we are.”

On the same day, Mr Rodgers explained to Mr Kirk in an email that he saw the scope of the services (listed in quoted subparagraphs (i) to (iv) above) as follows:-

“This to my mind involves you in the planning and where relevant in the discussion around the combined business value. Where directed explaining it to shareholders of Gener8. The individuals are known to all of us and may need to be approached by different people on a case by case basis. This is something we would decide on an ad hoc basis.

I think the most effective way forward is of you to set out what you think you can add to this and that we have a conference call with Hugo Brian and Egied on wednesday. If you are happy with this approach let me know when you might be available.”

In his witness statement, Mr Rodger said:-

“Between the back and forth of the advisory agreement negotiations, I could sense that Richard was deeply offended by the draft agreement. However, given our previous conversations, I struggled to understand why. It was obvious at this point that Euronav were not going to expand the express services in the agreement. I thought RMK were pushing their luck, and Hugo and I considered taking the work elsewhere. From our point of view, we already had an internal team at Euronav providing a lot of the background services. The plan was to always build a transaction team of several firms, as and when it became necessary to bring them in throughout the transaction period, to build on our internal one. We simply did not need RMK to carry out any additional services.

I therefore turned to Michael and Richard to ask what value they thought RMK could bring to the transaction, beyond Euronav’s initial proposal. Richard tried to expand their services to include advising on the capital structure analysis, various security options and the offer form (tender or merger / acquisition), to name a few. I knew that the figures in the acquisition model would be key to advising on these matters, particularly the capital structure analysis, so I did not necessarily see these as “new” services beyond those included in the draft agreement. Richard, again, asked to be a “full advisor” on the transaction.”

RMK submits that Mr Rodger therefore must have made clear to Mr Kirk and Mr Moore that they were being required to perform very limited modelling work, and that Mr Rodger did not deny that in cross-examination. However, in my view Mr Rodger’s oral was more nuanced, and cuts somewhat against the view that Euronav envisaged a narrow role for RMK:-

“ A. Well look, it -- the point that you're emphasising is that to underplay the significance of the model and the fact that as a financial advisor presenting -- preparing that model it is axiomatic that you will then present it, explain it and that that will be part of a process of determining value between the business entities.

…

The work is very important, but I think what you – what we're not trying to suggest here is that they simply worked in a back room on a model and nobody ever saw them. It was very clear from the agreement and it is very clear from the way that we work in understanding value that the person who had prepared and done all the modelling work would have to demonstrate that value to the people that were going to rely on it. Those people wouldn't just be Euronav, they would be outsiders who we would list it as a possibility and had stated would be a possibility because that's the critical part of going through a common understanding of value that will allow a business combination to take place.” (Day 4/58-59)

Also on 4 July 2016, Mr de Stoop sent an internal email to Mr Rodger, saying among other things that “[t]he value of the "model" is indeed limited. Mike wanted to send it to us in the past on a number of occasions. I always refuse on the basis that it would have committed us to them further”; and outlining various services he envisaged Euronav might seek from other advisers in relation to deal structuring, legal and accounting work for US and Belgian filings, a fair value opinion, possibly debt refinancing, and negotiation. Mr de Stoop accepted in cross-examination that he did not that this stage have in mind that RMK would be ‘going into bat’ to negotiated net asset values with Gener8’s M&A advisor, though he said he did not have a discussion with Mr Kirk or Mr Moore about this, and also made the point that “it depends on the context, it depends on the conversation, it depends on where it’s going” (Day 5/69).

Mr Kirk responded on 5 July 2016:-

“The 4 points you list make sense however there are other services not explicitly stated below that are natural to the Transaction and that intrinsically form part of any services we provide. Carving them out is difficult to impossible and certainly detracts from the overall value RMK can provide to Eurona[v]. Some of the more important of these not mentioned would be pro-forma capital structure analysis, input and advisory on the offer form (tender or merger/acquisition), due diligence both pre and post announcement, structuring advice and recommendations, advisory on any new securities, identifying and managing any new participants into the capital structure, etc.

The normal advisor compensation for a deal of this size would be 50 bps or more on the total Transaction size. This excludes any potential capital raise or new securities issue for the Transaction. RMK believes that we are the right firm to be Euronav's advisor on this Transaction. We would hope that our track-record with Euronav has earned us this belief, but for the sake of good order I would like to add that I advised on the largest public-to-public M&A deal (at least prior to this one) where Excel purchased Quintana maritime in a $2.5 billion cash and stock deal while at Dahlman Rose. Furthermore, in addition to many other M&A deals outside of shipping, while I was with DVB I was seconded to FR8's offices in London for 2.5 months to work with Nic Busch and Gary Brocklesby as they sold their 50% stake in FR8 to Projector.

In our view, Euronav will be best suited to utilize RMK as a full-advisor on the Transaction. This means you get our top priority and focus from now until the Transaction closes. You also know that you are working with a firm that has no competing interests and has an active and mutually respectful relationship with the key investors involved. We will perform all of the heavy lifting to support management, help with the nuances of public-to-public M&A and be able to deal with curve-balls as they come up during the process (and they will).

We understand your focus on paying below market for fees so to accommodate for this we would ask for a one-off work fee of $250,000 and a success fee of 25bps of the fully-delivered enterprise value of Gener8 based on the Transaction price at closing. On this basis we will not charge any additional amount for any new securities required for the Transaction even in the event that RMK places new securities directly with a new investor(s). We believe this offers a substantial discount to market price for advisory services and gives plenty of fat for Euronav to bring in a lending bank in the later stages as an advisor if required and cover any other incidental costs such as third party legal and accounting costs and broker valuations.

We've marked up the document to this effect, but are happy to have a conference call Wednesday anytime from 7am EST on.”

As indicated in his last paragraph, Mr Kirk attached an amended draft of the Advisory Agreement with changes tracked. The changes were:-

There was then a conference call, about which Mr Rodger said this in his witness statement:-

“37.

To get around this debate regarding additional services, Michael Kirk suggested to include a “catch all” provision in the Advisory Agreement for RMK to be able to carry out “other advisory related work that would be deemed appropriate for the transaction” [PR1/19-24] as and when it may become necessary to Euronav. My view on this at the time was that, if RMK wanted to demonstrate their ability to deliver additional services, we were happy to listen and take them on board, if the[y] were of any use to the transaction. However, I was aware that any such services would still be covered under the agreement, and therefore, come under the same fee. I thought that this was part of RMK’s agenda to pitch additional services to Euronav, with the aim of eventually being awarded further remuneration down the line.

38.

I organised a conference call with myself, Hugo, Brian Gallager (Euronav), Egied Verbeeck (Euronav) and RMK in an attempt to agree the outstanding points of the agreement. I was becoming frustrated by the negotiations between Euronav and RMK and was ready to take the work elsewhere. I made RMK aware that it would be entirely unrealistic for them to expect Euronav to negotiate this simple agreement further. By the end of the call, RMK understood their specific role in the deal and knew it was a ‘take it or leave it’ decision for them.

39.

I felt that RMK started to understand where Euronav were coming from at this point and were being more realistic in terms of what services they could reasonably deliver to the transaction [PR1/25]. However, as Euronav rejected RMK’s pitch to be a “full advisor” on the transaction, Richard requested that RMK still be named as an “advisor” instead of a “consultant” in the agreement, in order to obtain recognition as a main adviser on the transaction. This seemed trivial to me, so I accepted.”

Asked about this in cross-examination, Mr Rodgers agreed that he had felt frustrated because RMK kept on saying they wanted to be a ‘full advisor’ and Euronav kept on saying no. In response to the suggestion that RMK’s “specific role” was to develop the model and an offer, Mr Rodger said “It was to be the financial advisor who created the model. … And then of course explained it to other people and went to meetings at our request as we set out in our agreement.”

After the conference call, Mr Rodgers on 8 July 2016 wrote:-

“Following our good conversation of wednesday, we would like to propose to work together on project Liberate in the following way.

Initially we would like to work exclusively with you and build up the basis of an offer that would create value for Euronav in making an offer to merge with the target (by way of Euronav taking over GNRT and paying mostly with shares).

It is also important to note the following:

- At the moment both companies trade at a discount to NAV but the discount differential create an opportunity for Euronav to make the deal accretive to Euronav shareholders.

- It is important to recognise from day 1 that a merger NAV to NAV would not create enough value to make it worthwhile for EURN !

- Whilst some of the debt of the target may present an attractive feature in terms of margin, it is difficult to recognise any substantial value for EURN. Even if our goal would be to retain the Kexim and the Cexim financing at an initial stage. The main issue with those pieces of debt are the profile as well as lack of flexibility (selling vessel, changing flags or shipmanagement, etc...).

- The value of the older assets is hardly worth more than scrap.

- few synergies can be found in shipping as you know and we doubt that we will find a lot of cost savings by merging the two companies.

We highlight those points simply because if we were to work with you on a transaction, you would become exclusive to us and even if part of the compensation would be linked to a successful merger, at no point should we feel that you are working to make the deal happen no matter what the conditions are. in other words, you will have to wear a EURN hat and not an RMK one. The first hurdle is Euronav board agreement and for Euronav no merger may also be a good outcome.

The conditions set out to merge with the target will be the following — this is important as it reflects core values set in our investor messaging since IPO in January 2015:

- Combined business Leverage not to exceed 50%

- Break even (cash and P&L) not to exceed current B/E of Euronav

- Liquidity levels (cash, cash equivalent and credit lines or revolvers) to be the same than at present for EURN: namely 2 years of bad market liquidity

Fee proposal:

- a signing on fee of $100k

- upon EURN making a formal written offer: $150k

- upon acceptance of the offer by Bluemountain, Avenue, Oaktree & Navig8: $ 250k After that step we are likely to bring in some other banks

- upon acceptance of the offer by the board of GNRT with a break up fee: $1M

- upon completion of the transaction (after acceptance by EURN shareholders): $500k

We hope that this represent[s] a fair proposal knowing that we still need to room to accommodate bigger street names who can provide debt, fair value assessment for the board and EURN shareholders, increased exposure (retail & institutional) for shareholders in Euronav and potentially assist us with IFRS, auditors, FSMA, SEC compliance,...

We would of course be happy to publicly support and highlight RMK as key advisors on this deal from inception to completion.”

RMK suggests that the opening paragraph, referring to Euronav “initially” working exclusively with RMK and building up the basis of an offer meant that the only role being offered to RMK was building up the basis of an offer. That is not, however, the natural meaning of the message. Rather, it indicates that Euronav envisaged acting exclusively with RMK initially, to build up the basis of an offer, and potentially non-exclusively thereafter i.e. potentially alongside other advisers. Mr Rodgers in cross-examination also did not accept the interpretation suggested, saying “Well, again, I just refer you to the contract. We very specifically set out all the different aspects of what they would be expected to do.” It is true that Mr Rodger accepted in cross-examination that, in this email, he was rejecting “the full adviser role”. However, that is an ambiguous concept. On one view, a full M&A advisory role might include several important services, described in § 60 of Mr de Stoop’s first witness statement, that RMK were never going to provide, such as debt financing, fair value opinion and an official analyst role publishing market research pieces to institutional investors. In any event, it is (if anything) the contents of the email itself that matter. The only types of service which the email specifically indicated might require the engagement of other firms were those mentioned in the penultimate paragraph. It does not follow that RMK was being offered only the very limited role to which it now says the Advisory Agreement is confined.

Mr Moore replied the same day:-

“We certainly recognise Euronav wanting to stick to the core message given to investors since IPO and we appreciate the goal of value creation here. All your comments make sense and the way you want to approach this transaction is well understood by us.

In respect to the fees we have just two queries:

- upon acceptance of the offer by Bluemountain, Avenue, Oaktree & Navig8: $ 250k

We are ok with this conceptually, but it may be difficult to document. Let us know what you have in mind in terms of their acceptance?

- upon completion of the transaction (after acceptance by EURN shareholders): $500k

In general we are ok with your proposal but it is the end result under the right terms that is also important. I think it's reasonable to ask to increase that $500k to $1.5m, thereby increasing the potential total from $2m to $3m, which is an amenable compromise from our last and importantly is only on the back-end. We hope this adjustment is acceptable and we can then concentrate on the task in hand.”

On 11 July 2016, Mr Rodgers told Mr Kirk and Mr Moore that Euronav would not increase its 8 July fee proposal. RMK responded the same day suggesting that the final success fee be amended to include a discretionary element if Euronav deemed RMK’s services to merit it. Mr Rodgers expressed the concern internally that a discretionary fee would result in RMK “want[ing] to demonstrate along the way why they are doing a good job so that they can point to what they have done to support their claim for a discretionary bonus greater than 500K” and “setting ourselves up for aggravation and histrionics later on”. In the event, no such discretionary element was agreed, and the fee structure remained in substance as proposed by Euronav on 8 July.

Mr Rodgers sent a slightly revised version of the draft Advisory Agreement to Mr Kirk and Mr Moore on 12 July 2016, asking them to fill in the missing information about RMK then sign and return. On 14 July Mr Kirk returned a marked-up version, explaining that RMK “have not changed any of the commercial terms (other than in your favor!)”. One of the proposed changes was to alter clause 1.1(v) as follows:-

“Other Advisory related work that would be deemed appropriate for the ProjectTransaction.”

RMK signed the Advisory Agreement on 20 July 2016, and Euronav executed it on 25 July 2016. It terms were materially as follows:-

“This Advisory Agreement (the “Agreement”) is entered into:

BETWEEN: (1) EURONAV NV …

hereafter referred to as the “Company”

AND: (2) RMK Maritime (Europe) Ltd …

hereafter referred to as the “Advisor”

…

WHEREAS:

(A)

The Company is studying a possible acquisition of Gener8 Maritime Inc., a company listed on the NYSE (the “Project”);

(B)

The Company wishes to use the services of the Advisor as an independent contractor for the development of an offer document for the Project as further defined hereunder;

(C)

The Parties wish to specify the terms and conditions of the performance of the Services by the Advisor.

IT HAS BEEN AGREED AS FOLLOWS:

1.

Subject

1.1.

The Advisor shall perform and/or provide, or cause to be performed and/or provide the following main services (hereinafter the “Services”):

(i)

Develop an Acquisition Model for the project in cooperation with the Company;

(ii)

Attend all meetings related to the Project by phone or in person, if so requested by the Company;

(iii)

Keep the Company informed and the model updated to the extent relevant with any information to which it becomes privy in relation to Gener8 Maritime Inc., the Company, the Project or possible competition;

(iv)

If so requested by the Company, approach specifically named individuals to explain the Project model and to advise Euronav of the outcome of such meetings;

(v)

Other Advisory related work that would be deemed appropriate for the Project.

The above list is not exhaustive and subject to change as agreed upon in writing by both Parties.

If so requested by the Company, the Advisor will develop the model directly on the Euronav server through a remote connection specifically installed for the purposes of this Agreement. The use of a remote secured connection will also allow for exchange of information required for the development of the model.

The Advisor shall provide the Services in accordance with industry standards. The scope of the Services may be revised from time to time by written mutual consent of the Parties.”

1.2.

The Company agrees that the Advisor’s affiliate, RMK Maritime Capital, LLC (“Capital”), a broker-dealer registered with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, Inc., will perform certain of the Services if, in the Advisor’s reasonable determination, such Services should be performed by a U.S.-registered broker-dealer under the laws of the United States. The Advisor agrees to notify the Company if the Advisor determines that Capital should perform certain of the Services, and agrees to inform the Company of the Services to be performed. The Company agrees that any Services performed by Capital are for the benefit of the Company, and that the Company will pay Capital directly for the provision of the Services that Capital performs. The Advisor acknowledges that any amounts paid to Capital for the performance of the Services will not increase the total fees to be paid by the Company for the Services under Article 4 of this Agreement.”

2.

Duration and termination

2.1.

This Agreement is entered into for an initial period of three months, commencing on 20 July 2016. Upon the expiration of the initial three-month term, the Agreement shall automatically renew for the term necessary to complete the Project, unless the Parties otherwise agree in writing.

2.2.

This Agreement will terminate upon the completion of the Project, if such completion occurs before expiration of the Agreement. The Agreement will also terminate upon the Company's written notice to the Advisor stating that the Company has determined not to proceed with the Project, if such determination occurs before expiration of the Agreement.

2.3.

Either Party may, by written notice, terminate this Agreement in the event of a material breach by the other Party, provided that the terminating Party is not also in material breach, and provided further that the breaching Party shall have right to cure any such breach, if curable, within five (5) business days of receipt of such notice. The Agreement will terminate upon the breaching Party's receipt of such notice, if any such breach is not curable, and upon the expiration of the five (5)-day cure period if such breach is curable, but has not been cured on or before such expiration. Any notice pursuant to this article 2.3 shall specify the breach(es) upon which such termination is based. Advisor shall be entitled to any upaid [sic] fee under Article 4 for Services performed.

2.4.

Notwithstanding the aforementioned articles 2.2 and 2.3, article 5 will survive the expiry or a termination of this Agreement.

[…]

4.

Fee and expenses

4.1.

Without prejudice to article 2.3, the Company shall pay to the Advisor the following fee:

(i)

USD 100,000 within 5 business days of the execution of this Advisory Agreement;

(ii)

USD 150,000 upon the Company making a formal written offer to Gener8 Maritime Inc.;

(iii)

USD 250,000 upon receipt by the Company of a written undertaking made by each of Bluemountain, Avenue, Oaktree and Navig8 to approve such formal offer at any general shareholders meeting of Gener8 Maritime Inc.;

(iv)

USD 1,000,000 upon acceptance of the formal offer with break up fee by the board of directors of Gener8 Maritime Inc. and the agreement to recommend the offer to the shareholders of Gener8 Maritime Inc. in a general meeting of such shareholders;

(v)

USD 500,000 upon completion of the Transaction, including approval by the shareholders' meeting of Euronav; and

(vi)

if the fee under (iii) would not have been paid for lack of a written undertaking by each of Bluemountain, Avenue, Oaktree and Navig8 to approve the formal offer at any general shareholders meeting, but the Transaction would nevertheless be completed, the USD 250,000 fee shall be paid together with the fee payable under (v) above.

4.2.

Reasonable out of pocket expenses incurred by the Advisor as a result of the performance of the Services, such as international travel and lodging, shall be reimbursed by the Company subject to the prior approval of the Company and the Advisor's submission of appropriate supporting documentation.

…

12 Prior agreements — Modifications

12.1

This Agreement contains the entire agreement between the Patties with respect to its subject matter.

12.2

It replaces and annuls all prior agreements, oral or written, exchanged or concluded between the Parties relating to the same subject matter.

12.3

No amendment of this Agreement shall be effective unless it is made in writing and signed by duly authorised representatives of all Parties.”

While the discussions concerning the proposed terms of the Advisory Agreement took place, RMK continued to communicate with Euronav about financial information for the preparation of a model. On 14 July 2016, Mr Kirk asked Euronav for charter information; the book value of Euronav’s vessels; Euronav’s drydocking costs; its operating expenditure for its Very Large Crude Carriers (VLCCs), Suezmax vessels, and Floating Storage and Offlading units (FSOs); the estimated spot rates for the VLCC and Suezmax vessels for the third quarter of 2016; Euronav’s forecasted general and administrative costs; and the detail of Euronav’s debt position. Mr de Stoop sent RMK most of that information on 15 July 2016.

On 19 July 2016, Mr Kirk sent Mr de Stoop and his colleague in Euronav’s financial department, Mr Timothy Melis, his model of Gener8’s financial position (“the GNRT Model”). He indicated that there would be two further models: a model of Euronav’s position (“the EURN Model”) and a model of the financial position of the post-merger entity (“the Combined Model”).

Mr Kirk sent the EURN Model to Euronav on 20 July 2016, noting that he needed some assistance in respect of certain issues, including the accounting of a joint venture between Euronav and International Seaways. Following further information from Euronav, RMK made changes to the GNRT and EURN Models and sent final versions to Euronav on 22 July 2016. Mr Kirk proposed that he and Euronav discuss the Models, and that Euronav inform him if anything needed to be adjusted or added.

On 25 July 2016, which was the day on which Euronav executed the Advisory Agreement, Mr Kirk sent Euronav a copy of “the full Project Liberate Model”, i.e. the Combined Model, indicating that it was “in Final Draft Form” and welcoming any comments and suggestions. Mr Kirk noted among other things that:-

The following day, 26 July 2016, Mr Kirk said he had dug deeper into the accretion analysis on the proposed merger, and concluded that even in a scenario where the charter rates were low, the “Transaction is EPS accretive (in fact, it is the difference between positive and negative EPS in 2017)”.

On the same day, Mr Kirk said “I’ll take a first crack at a Board book” and that he had “some specific feedback that I wanted to share on the structure of an acquisition, so maybe I could give you that before the end of the week”. The Board Book was a separate document from the acquisition model, designed to explain Project Liberate to Euronav’s Board of Directors and enable them to decide whether the proposed transaction was worth recommending to Euronav’s shareholders.

Mr de Stoop commented on the models on 29 July 2016, finding them to be robust and detailed. He noted, however, that he would like to start from a different angle and run another scenario. He suggested some adjustments, including adding to the Combination Model NAV calculations using ship valuations provided by the subscription website, vesselsvalue.com (minus 10% for some of Gener8’s vessels). Mr Kirk sent an updated Combination Model on 11 August 2016 taking into account those suggestions, and also reflecting a fall in the vesselsvalue.com valuations and a change in estimated charter spot rates.

On 16 August 2016, after a discussion with Mr de Stoop, Mr Kirk sent an outline of the proposed Board Book to Euronav. The next day, Ms Motyka sent Mr Kirk a first draft of the Board Book, comprising about 45 Powerpoint slides, subject to a few slides whose contents were to follow. A day later, 18 August 2016, Mr Kirk sent Euronav a ‘first cut’ of the Board Book, inviting Euronav’s feedback as to what could be added to improve the presentation. The draft Board Book envisaged ‘deal fees’ totalling about US$ 21.8 million. Much of the content of the Board Book was drawn from the model, sometimes presented in a different form, though it also included some additional material such as the market profile of the proposed combined company by reference to capitalisation, number of vessels and vessel values, as compared with publicly listed companies; a list of Gener8’s top 15 shareholders and their projected post-merger holdings; and an illustration of Euronav’s and Gener8’s share prices. The additional material was largely referenced to public sources, such as Bloomberg, shareholder filings, vesselvalues.com or Clarksons, or provided by Euronav.

On 30 August 2016, Mr de Stoop wrote to Mr Kirk saying “I went through the board book which is a very good start and have a few comments/suggestions/questions” and suggesting a discussion. Apparently following discussion, on 6 September 2016 Mr de Stoop wrote:-

“I am not too sure where we left things after the last phone call but I was under the impression that you were going to work on an update board deck.

In the meantime we have had our own thoughts and would like to simplify the presentation as much as possible to fill the important information during the limited attention span people will have and once they are hooked develop further in annexe.

Once I receive your presentation in ppt I will re-arrange it but in the meantime could you produce the following simple figures/tables: …”

The requested figures/tables related to various asset and liability metrics and different financial permutations for the combined post-merger entity.

Mr Kirk provided an updated version of the Board Book on 8 September 2016, reflecting the share price on 7 September 2016. A Euronav Board Meeting was due to take place on 13 September 2016, and in the preceding days Mr Kirk, in discussion with Mr de Stoop, made a number of further adjustments to the Board Book, culminating in a final version sent on 12 September 2016.

At the Board Meeting on 13 September 2016, Euronav’s management was given “the blessing of the board to go further” (as Mr de Stoop communicated it to Mr Kirk). Mr de Stoop said there were a few things he wanted to work on before setting a strategy on how to approach the Gener8 shareholders, including:

In response, Mr Kirk noted the robustness of the model but also explained that he would need some time to make and sense check the various adjustments required by Mr de Stoop. He expected to able to get the updated version to Mr de Stoop by the end of the following week. In addition, Mr Kirk set out his thoughts on how Euronav might plug the liquidity gap post-merger – suggesting a perpetual preferred bond that would never mature and convert into common equity (or a “straight preferred” as Mr Kirk referred to it). The market for such a product was said to be “on-fire (so pricing is attractive to issuers)”, and Mr Kirk noted that he would be happy to make any introductions to Euronav if required.

On 18 September 2016, Mr Kirk provided an updated Combination Model to take account of Mr de Stoop’s comments of 14 September 2016. Updated versions of the Board Book were provided on 18 and 30 September 2016.

Mr de Stoop on 20 October 2016 sent a detailed email to RMK indicating that Euronav continued internally to “struggle” largely over (a) ensuring the company’s post-merger liquidity leverage and average break-even, (b) mitigating the risks associated with the execution of any proposed transaction, and (c) post-transaction integration. Mr de Stoop said Euronav had been thinking around the structure, currently envisaged as involving an offer to pay in shares and take over the liabilities, raising further equity in the market and selling non-core assets. Mr de Stoop described a different potential way of structuring the transaction, involving acquiring assets and existing bank financing, setting out the advantages he thought that approach would have. He suggested a call to discuss. Mr Kirk provided his views by way of written commentary inserted into a copy of Mr de Stoop’s email, and a subsequent call.

Over the next couple of days, it was decided that Euronav would pursue an approach whereby (a) it paid for some of Gener8’s shares in cash and the remainder in common equity shares, and (b) it would raise the necessary capital to pay the cash element of the acquisition, as well as to plug the post-merger liquidity gap, by carrying out a private placement of convertible preferred bonds. On 22 October 2016, Mr Kirk sent a two-page email starting “I think that Friday's call was extremely productive and I really like the updated concept of pre-raising the capital via a private placement”, and proceeding to set out further commentary about the new proposed transaction structure. Mr Kirk ended by saying he would “finish up the updated model, based on this structure above over the weekend”.

On 25 October 2016, Mr Kirk circulated an updated Combination Model and Board Book reflecting “the capital structure that I outlined yesterday”, i.e. his most recent thoughts on how the acquisition and capital raise could be structured.

RMK updated the Models from time to time due to movements in Euronav’s and Gener8’s share prices and financial positions, for example after the announcement of Euronav’s Q3 2016 results at the end of October 2016. By December 2016, the Board Book had been through 20 or more iterations.

During a meeting between Euronav and RMK in London on 3 November 2016, Euronav requested a Pitch Book, also known as a “9-Pager” or “15-Pager” depending on its length. This would be a summary document explaining the benefits of the proposed acquisition of Gener8 to Euronav’s Board, including two scenarios: the “offer case”, i.e. the deal ratio and price that would be offered to Gener8, and the “worst case” or “limit case”, i.e. the highest deal ratio and price that Euronav might contemplate paying.

Mr Kirk provided on the evening of 5 November 2016 a three-page “Transaction Overview” which, in summary, set out that:-

On 8 November 2016, Mr Kirk emailed Mr de Stoop setting out comments on the ‘worst case’ and ‘best case’ scenarios for the proposed acquisition, on which he invited Mr de Stoop’s comments before sending the analysis to everyone. Mr de Stoop replied affirmatively, adding “Don’t forget the idea is to launch (test the waters) with the best case and know our absolute limit at which we would walk away".

Following a conversation with Mr de Stoop, Mr Kirk made some adjustments to the assumptions, and on 15 November 2016 sent Euronav a 9-page document setting out the ‘worst case’ scenario for the transaction. This was an adjusted and expanded version of the 3-page Transaction Overview, also including analyses of NAV, loan to value, shareholder value accretion, fleet operating days and liquidity. That was shortly followed by the ‘offer case’ version. Those documents together constituted the Pitch Book.

The Pitch Book, as revised from time to time, include textual analysis of proposed structures, their effects on the transaction and financial data regarding NAV, financing and the impact on existing debt. This narrative was new as compared to the model. At the same time, the contents of the Pitch Book were and remained closely linked to the model as it stood from time to time. For example, in a WhatsApp dated 11 December 2016, Ms Motyka confirmed that 90% of the 9-Pager was done and there were limited figures that she could not link to the model. A WhatsApp from Mr Kirk’s at 18:46hrs on 4 January 2017 asked Ms Motyka if she could do the ‘offer case’ and ‘limit case’ 9-pagers that evening, if he saved the model, saying “I will paste in all the appropriate graphs so you just need to do the words”. Ms Motyka replied, “I think I’ll be able to finish it quickly enough”. The 9-Pager was sent over to Euronav the following morning together with the latest model. To similar effect, [E19/292] confirms that the 15 pager (a longer version of the 9 pager) uses cut and pastes from the model.

Returning to mid November 2016, Mr de Stoop provided comments on the Transaction Overview documents, and some additional financial information to factor into the assumptions underpinning the analysis, on 16 November 2016.

On 18 November 2016, Mr Kirk “took a first cut at an action plan for the next 6 weeks” which envisaged a formal offer being made by Euronav to the Geenr8’s board in the week of 5 December 2016, the transaction being approved by Gener8’s board in the week of 12 December 2016, and the announcement of the tender offer being announced in the week of 18 December 2016. By Mr Kirk’s own admission, the timeline was ambitious, at least insofar as it related to the acceptance of the formal offer by Gener8’s board within a week from having been made by Euronav.

On 22 and 23 November 2016, Mr Kirk provided updated 9-Pagers (Pitch Book) taking into account Mr de Stoop’s comments on (a) the worst or ‘limit’ case scenario and (b) the ‘offer case’ scenario.

The 9-Pagers (Pitch Book) included figures for (a) deal fees and expenses, and (b) the costs of consolidation, and on 12 December 2016, Mr de Stoop requested the detail of the fees and expenses included in those figures. Mr Kirk provided the detail for the consolidation costs on the same day – explaining that it included Gener8 personnel related costs, including US$8.325 million in compensation upon termination of the senior management personnel, and US$10 million for non-management redundancies and transition costs. The detail of the estimated deal fees was explained by Mr Kirk on 19 December 2016 as including, on the Euronav side, “US$18.0 million to investment banks for advisory and capital raise”.

During this period, it was agreed that Euronav and RMK would have weekly calls. The Combination Model and the 9-Pagers (Pitch Book) were updated by RMK ahead of each meeting to reflect any changes in the financial positions of the parties.

In addition, Euronav’s Head of Investor Relations, Mr Brian Gallagher, began work on a ‘pitch deck’: a presentation that Euronav would use to ‘sell’ to Gener8’s current shareholders on the idea of Euronav’s acquisition of Gener8. Mr Gallagher on 16 December 2016 sent a draft of the pitch deck to the Euronav team as well as Mr Kirk for discussion. Mr Kirk replied that RMK had already “started a draft on our side, so we will plan on combining and circulating something in the coming days”.

In an email to Euronav shareholders around this time, dated 20 December 2016, Mr Rodgers said “Attached are the Data Table and transaction overview prepared on a weekly basis by RMK, our adviser for the evaluation phase of the transaction”. Asked about this in cross-examination, Mr Rodgers said that the email was written during the evaluation phase of the transaction, so his description of RMK was not significant. On one view, Mr Rodgers was in fact going further and was referring to RMK’s role in general. However, RMK’s role was in no sense the focus or subject-matter of the email: the reference to RMK was merely a short way of identifying the source of the information, in a message written some months after the Advisory Agreement was signed. I do not regard it as having any real significance.

Euronav had meetings with some of Gener8’s key shareholders, as well as representatives of funds who might be interested in financing the transaction through convertible preferred bonds – in particular, GSO Capital and Golden Tree. Mr de Stoop suggested that both funds contact Mr Kirk to discuss the financial model that he had built, and noted that Euronav would like to be in a position to make an offer for Gener8 during the second or third week of January 2017. The funds contacted Mr Kirk, who provided the combination model to them, and additional detail and explanation where required. RMK’s evidence (which I have no reason to doubt) is that it had pre-existing relationships with these funds.

In the meantime, Mr Gallagher began work on a draft of the offer letter to Gener8’s board.

On or around 21 December 2016, Euronav instructed its US lawyers, Seward & Kissel LLP (“SewKis”) to commence ‘due diligence’ review of publicly available information relating to Gener8, including Gener8’s ‘Form 10K’ filing with the US Securities and Exchange Commission, material agreements, loan agreements, employment agreements, for key change of control/merger provisions. Some of that work had already been done by Mr Kirk in order to obtain the financial information for his Models, and SewKis requested and obtained some of RMK’s work product.

On 6 January 2017, GSO Capital provided a term sheet setting out the terms on which it would be willing to finance the proposed merger with Gener8 through convertible preferred bonds and common equity. The offer was unattractive to Euronav, and after discussions internally within Euronav and with Mr Kirk’s input, Euronav provided GSO with comments setting out its position on 20 January 2017. As part of this process, Mr Kirk on 7 January 2017 provided Euronav with a comparison of various deal structures in the light of the preliminary feedback from GSO, and some commentary. Mr de Stoop in response sent Mr Kirk GSO’s term sheet, and requested a call later that day.

In the meantime, further updates and adjustments were made to Mr Kirk’s Models and 9-Pagers (Pitch Book). Euronav carried out an analysis of Gener8’s fleet and made adjustments to the vesselsvalue.com valuations for each of the vessels to take into account the quality of the ship and illiquidity in the market which would make the sale of certain Gener8’s ships difficult. This process began with an email from Mr de Stoop to Mr Kirk of 19 January 2017 asking RMK to produce a complete fleet list with year built, yard and current vessel value, and saying “We will analyse it and adapt it accordingly”. Mr Kirk provided a list of Gener8 fleet values the following day, derived from the subscriber service vv.com, following which Mr de Stoop proposed adjustments to the vessel values and invited comments from Euronav management. A copy was sent to Mr Kirk, who requested details of Euronav vessels so that he could make a comparison for relative NAV purposes. On 26 January 2017, Mr de Stoop sent a list of fleet values to Mr Kirk saying:

“see attached.

we really went through the fleet into details and can probably justify every discount or reduction of value applied.

It is as we mentioned either because the ships necessitate repairs for their structural problems well known in the market or because they are not ships that we want to keep (wrong size or wrong segment) or too old for us to trade.

can you plug that in and see what it does to the NAV

As far as EURN is concerned i have adjusted our N-class and nothing else because our older vessels are on TC [time charter].”

Mr Kirk used the revised vessel values to update the model.

GSO Capital’s response to Euronav’s comments on 25 January 2017 effectively repeated the terms of its original offer, albeit showing some limited flexibility.

Around the same time, Euronav began to arrange to meet with some of Gener8’s shareholders to ‘sell’ the idea of a merger – in particular, Blue Mountain and Blackrock, both of whom agreed to sign Non-Disclosure Agreements.

At the end of January and the beginning of February 2017, Euronav (in particular, Mr de Stoop and Mr Gallagher) began to work in earnest on pitch decks for the purposes of presentation to Gener8 shareholders as well as to potential investors in Euronav, with the input of SewKis and Mr Kirk. On 30 January 2017, Mr Gallaher sent a draft of the pitch deck to Mr Kirk with a request for a call “to get this document into shape for use later this week”. Mr de Stoop emailed Mr Kirk on 1 February 2017 saying, “As mentioned a minute ago on the phone, could you take the presentation and populate it with what you can and send it back to us overnight...Good luck and good work!”. As part of that email, Mr de Stoop provided details comments on adjustments to NAV, specifically in relation to fleet valuation matters. Mr Kirk provided RMK’s comments on the slides on 2 February, at the same time saying “RMK is happy to take ‘ownership’ of the presentation, which clearly means that we will be responsible for keeping the presentation up-to-date, error-free, consistent and ready to go at all times – given that much of the presentation will ideally be linked to the final model, this is probably the most efficient way forward”. RMK provided Euronav with a near final version of the presentation for Gener8’ shareholders on 3 February 2017. The final pitch decks were provided to Blue Mountain in advance of a discussion between Euronav and Blue Mountain on 6 February 2017.

Mr Kirk gave evidence that he had a telephone conversation with Mr de Stoop in February 2017 about fees. This is the first of a series of contacts on which RMK rely as showing a joint understanding that RMK was providing services that Euronav would have to pay for (over and above the fees provided for in the Advisory Agreement). I consider these contacts individually and, later, in their totality.

In his witness statement, Mr Kirk said:-

“… I recall clearly having the conversation with Mr de Stoop in February 2017. It was a phone call from my old office in Manhattan. While it is fair to say that no actual figure was discussed, we did discuss the fact that RMK had initially been employed by Euronav on a limited advisory basis and the work that was now being done, and that would be required to be done going forward, was in excess of and far and beyond the scope of the Advisory Agreement. I have no doubt in my own mind that he said something along the lines that we were not to worry and that Euronav would take care of RMK and they would make sure RMK was paid properly. Mr de Stoop acknowledged during that conversation the work that RMK had done was in excess of the work under the Advisory Agreement.” (§ 32)

“Indeed, having conducted the significant amount of work that we had during this period, it was in February 2017 when we had our first conversation with Mr de Stoop to advise that we needed more by way of fees for the work that was being done on behalf of Euronav. My very clear recollection is that his response was positive and that Euronav would pay an appropriate fee. As I have stated above, at the request of Euronav we were carrying out work beyond the scope of the Advisory Agreement, i.e. far and beyond the ‘study’ of a potential deal, to an actual transaction. Therefore, we did not want to be in a position where we were working for a fee below that to be expected for the level of work we were doing. I would consider this to be the same in any business. As a result, I raised this with Mr de Stoop in February 2017 and, as a result of that conversation, I had no reason to believe that Euronav would not pay a fee commensurate to the work being done given our working relationship and previous deals.” (§ 61)

There is no contemporaneous record of the conversation on either side, except that it is alluded to a text message Mr Kirk sent to Mr de Stoop on 18 June 2018 saying:-

“Hugo, I'm glad we spoke today and I hope you understand where we are coming from. Going back to the last bullet of your presentation, we're asking for Euronav's respect. We put the same blood, sweat and tears into this Transaction that you did and we feel like we were a steady pair of hands the entire way through. We want to continue to add value to Euronav which we consider to have (and this is regardless of this outcome) the best Management team in shipping. That said, we feel like we have and continue to do a great job for Euronav and effectively ask for you to respect RMK. We didn't shy away from having this fee discussion and brought up at least 5 times starting in Feb 2017.

We continually agreed to defer the fee conversation because we believed that Euronav would properly value our contribution. We didn’t do this naively, we believed this because the last time we helped you complete a Transformative deal, the compensation was fair and reasonable. …”

Mr de Stoop replied, “I just sent you a long email explaining our position and more importantly the referencing fees taken with 2 banks for similar transactions.” His email, sent during the evening of 18 June 2018, set out why he and Mr Rodgers felt the parties were a long way apart as to fee levels, ending with the sentence “On that basis, I am afraid our positions are irreconcilable (unless you tell me otherwise) and if that is the case, I wonder what's in it for Euronav to move away from the contract....”.

In cross-examination, Mr Kirk gave this evidence:-

“Q. …Mr Kirk, what I would suggest to you is that you do use different terms -- "commensurately", "properly", "appropriate" and you being taken care of. What is your recollection of the words actually used at that time in that conversation?

A. My Lord, I don't remember the exact quotes from Hugo. What I can say for certain is that he acknowledged that we were working beyond the scope and told me that we would be paid appropriately.

Q. Mr Kirk, I suggest that your recollection in your witness statement is inaccurate and you have no recollection of that being said at all.

A. I disagree with that. I have a strong recollection of what was said by Hugo De Stoop. I don't remember the exact words used though.

Mr de Stoop in his witness statements gave evidence in general terms about post-Advisory Agreement fee discussions, which he originally seemed to recollect began later in 2017. He said in his first statement:-

“ As I recall, RMK became aware of UBS’ fee for the transaction from Gener8 on review of the expenses listed in the NAV calculations from around August 2017. I remember that this was the point that RMK started raising the issue of additional compensation for RMK’s work on the transaction. It seemed to be that once they became aware of UBS’ fee, RMK became further disappointed with the agreement that they negotiated with Euronav and sought the same remuneration as UBS.” (§ 64)

In cross-examination, the alleged discussion in February 2017 was not specifically put to Mr de Stoop as an individual discussion. Nor was it ever put to him that he acknowledged that RMK was working beyond the scope of the Advisory Agreement. The main exchanges in this part of Mr de Stoop’s cross-examination were as follows:-

“16 Q. Do you agree that any work that RMK did for you in that period was outside the scope of the advisory agreement, not part of what you had engaged them to do?

A. No, because at the end of the day, when -- when you look at the model and when you look at acquiring a certain set of assets or acquiring a company, this is just another scenario. So you're not going to rebuild an entirely -- an entirely new model for that scenario. I mean, at the end of the day, if you look at the transaction, that's a little bit what we did, so we acquired the entire fee [sc. fleet] but we sell out -- sell out was still the same model that we were using but it was running another scenario.” (Day 5/84-85)

and:-

“I want to move on then to the discussions that took place from February 27 onwards in relation to RMK's fee. It's right, isn't it, that from February 2017 onwards, RMK, Mr Kirk and Mr Moore, regularly pointed out that the transaction was taking much longer than anticipated. Isn't that correct?

A. Yes.

Q. And they regularly said that they were doing work which went far beyond the scope of the advisory agreement. Is that right?

A. They said that.

Q. And they said that accordingly, they thought that they were entitled to an additional fee commensurate to the work that they were doing. Is that correct?

A. Yes, well, the definition of commensurate is obviously not very precise, but yes, they said that.

Q. Yes. They thought that they were entitled to a fair fee or a reasonable fee for the extra work that they were doing, as they saw it?

A. They said that, yes.

Q. Yes. And they said it a lot of times, didn't they?

A. Well, I think that over the course of six months, maybe three or four times, yes, so a lot of times. And believe me when my wife is telling me something a lot of times it's more than that!

Q. And Mr Rodgers said yesterday, Mr Rodgers told us yesterday, that he told Mr Moore and Mr Kirk that Euronav would take care of RMK. And you said similar things to Mr Moore and Mr Kirk, didn't you?

A. It's not an expression that I use so I doubt I ever said that. But I may have used a different expression.

…

MR RUSSELL: It was Mr Kirk who spoke to you about the fee in the way in which I've described; yes?

A. Yes.

Q. And you say that you might not have used the expression that Euronav would take care of RMK because that doesn't sound like your words. But you said words to similar effect to Mr Kirk. Is that correct?

A. I think that every time we had a conversation around fees, I think that we were probably each of us thinking about something that was completely different. So, you know, on our side we, myself and Paddy, we were discussing that we were thinking about a discretionary bonus and a reasonable amount of money. And on their side until they came up with the eight digit figure they were probably thinking about a large sum -- a large amount of money. And it's true that the conversation was sort of intensified when they saw what UBS was getting.

Q. So you think that you probably had different ideas in mind as to the amount of additional fee that --

A. The amount, yes.

Q. Yes. But when Mr Kirk told you that he thought that the transaction was taking much longer than anticipated and that they were doing work far beyond the scope of the advisory agreement, and that he thought that they were entitled to an additional fee, you did not say to him, did you, "You are not entitled to an additional fee, you are only entitled to the two million in the contract"?

A. That's probably correct. What I have said is that we will discuss that at the end of the transaction.

Q. Yes, you would discuss the number at the end of the transaction was what you meant?

A. We will have a discussion and whether there's a number or not we will have a discussion and -- depending on the outcome of the discussion, it might be a number or not.

Q. Yes. But you did not say to Mr Kirk that he would only receive the two million, did you?

A. I didn't say or I didn't -- or I -- you know, either way that was not part of the conversation. So I didn't say you are only going to receive two million or you're not only going to receive two million.

Q. And you did not say that any additional payment would be purely in Euronav's discretion, did you?

A. Oh I think that was mentioned on several occasions.

Q. I suggest to you that what you said was what you have just said that you said, which was that the discussion about additional fee would take place at the end?

A. Yes.

Q. That's what you said?

A. At the end or later. I mean certainly not at the point where they wanted to in the conversation.

Q. Yes. And Mr Kirk was saying to you that they needed an additional fee, they felt they were entitled to an additional fee. Yes?

A. I don't think what he said they needed, because if he would have said I need an additional fee, that means that otherwise he's going to stop working, which was never part of the conversation. And I believe it was never part of the conversation because under the contract they were not allowed to stop working.

…

Q. No, I'm asking you what he conveyed to you. He conveyed to you that you understood from what he was saying that he wanted reassurance that there would be an additional fee?

A. I think he wanted reassurance that we would discuss it and it wouldn't be strictly speaking only the fee of the contract.

Q. Yes. He wanted reassurance that he would get more than the fee of the contract?

A. Cannot get less, right?

Q. He wanted reassurance that he would get more than the fee of the contract, that's right, isn't it?

A. Reassurance is a feeling so I cannot speak on his behalf.

Q. And I suggest to you that -- you may say that you can't comment on this -- but I suggest to you that he would have had no reassurance if you had said any additional payment will be entirely in our discretion. That must be right, mustn't it?

A. No, I completely disagree with you because in these transactions there is a lot of time a discretionary fee, I mean from time to time it's even in the contract itself so it's foreseen and I think that a lot of people take a great deal of comfort that a discretionary fee is going to take place --

…

So I sincerely disagree with you.” (Day 5/151-157)

The questions then moved on to the emails of July 2017 about fees.

In these circumstances, I do not consider that it would fair to conclude that Mr de Stoop acknowledged to Mr Kirk or agreed that RMK was working beyond the scope of the contract. That suggestion was never put to him in terms, either in relation to the February 2017 conversation or at all. In any event, on the evidence given I would not, and do not, find that he did say that. I am satisfied that both Mr Kirk and Mr de Stoop’s evidence about this alleged conversation was honestly given. I consider it more likely than not, bearing in mind Mr Kirk’s recollection and the later text message quoted above, that a conversation about fees did take place in February 2017. I also consider it plausible that Mr Kirk said during that conversation – as Mr de Stoop accepted he had said several times – that Mr Kirk considered RMK’s work to be going beyond the scope of the Advisory Agreement.

However, I do not believe that Mr de Stoop himself indicated that he agreed with that view, nor that he said anything suggesting that RMK was entitled to, or would necessarily, receive further payment. It is evident from his evidence as a whole that he did not consider RMK to be working beyond the scope of the Advisory Agreement or to have an entitlement to further payment (see, for example, the passage of his oral evidence quoted in § 230 below), and it would have been surprising if he had said either of those things to RMK. Further, Mr de Stoop is unlikely to have regarded himself as having authority to agree that RMK was working beyond the scope of the Advisory Agreement and would be entitled to additional payment: he was the CFO, not the CEO, and made clear in his oral evidence that he regarded Mr Rodgers as his ‘boss’ and as having the ‘last word’ on such things. The gist of Mr de Stoop’s evidence quoted above was, rather, that it was mentioned on several occasions that any additional payment would be discretionary, and that he spoke to RMK in terms of there being a ‘discussion’ about whether there would be a further payment and, if so, in what amount. I accept that evidence.

In addition, and even accepting Mr Kirk’s evidence that there was a high degree of trust between the parties at the time, I consider it unlikely that no record would have been made on either side if Mr de Stoop had accepted that RMK was doing work beyond the scope of the Advisory Agreement, or that RMK would in due course be entitled to additional payment over and above the fees stated in that agreement. Even if Mr Kirk had felt inhibited about sending a confirmation to Euronav direct, he or Mr Moore (with whom Mr Kirk said he was sure he would have reported the conversation) would have been very likely to record or mention it in a contemporaneous email, text or other message. As it is, Mr Moore did not refer to this conversation in his witness statements at all.

In all the circumstances, I do not consider this conversation to be a reliable basis on which to conclude that the parties had a joint understanding of the kind RMK allege.

The exercise of assessing Gener8’s fleet in order to adjust the vesselsvalue.com valuations had led Mr Rodgers to begin to consider whether a full merger of Gener8 was actually the best outcome for Euronav. On 2 February 2017, he raised with Mr de Stoop the prospect of Euronav simply purchasing Gener8’s fleet of modern Korean-built vessels, which he thought could be beneficial for both Euronav and Gener8. Mr de Stoop thought it was a good idea (subject to modelling what Euronav would look like with those vessels added) but indicated that if he were the CFO of Gener8, he would likely never advise the shareholders to take the deal.

Mr de Stoop informed Mr Kirk of the proposed new approach, and on 23 February 2017 Mr Kirk shared with Euronav an analysis he had carried out comparing Euronav’s financial position (a) as it stood at the time, (b) if it carried out a full acquisition of Gener8, and (c) if it acquired Gener8’s 13 2015, 2016 and 2017 Korean-built vessels. The result of this comparison was that “Assuming this is a viable option, [the acquisition of the 13 Korean-built vessels] seems to make the most sense for EURN”.

By a letter dated 20 March 2017, Euronav made an offer to Gener8 to purchase the vessels for US$1,009,000,000, to be paid by (a) Euronav assuming Gener8’s debt to a syndicate organised by Nordea, the Export–Import Bank of Korea (“KEXIM”) and Korean Trade Insurance Company (“K-Sure”), estimated to be US$696 million and secured against the 13 vessels, and (b) Euronav paying the balance of the US$1.009bn in cash. The offer was stated to expire at 5pm on 24 March 2017. KEXIM and K-Sure are Korean export credit agencies who had financed Gener8’s Korean-built vessels.

In view of the vessels-only offer, on 23 March 2017 RMK invoiced Euronav for US$ 150,000 pursuant to Clause 4.1(ii) of the Advisory Agreement, on the basis that it had met the milestone of Euronav submitting a formal offer to Gener8’s board. Mr de Stoop approved the payment on 31 March 2017, having specifically considered the terms of the Advisory Agreement.

On 27 March 2017, Mr Rodgers updated the Euronav Board about the vessels-only offer. He explained that he had spoken with Gener8’s Chairman, Mr Georgiopoulos and other members of the Gener8 board, from whom he understood that they: (a) had appointed an advisor to evaluate different alternatives, (b) were not currently inclined to accept the vessel-only offer, which they considered a raid on Gener8’s ‘crown jewels’ at the bottom of the market, (c) would, however, like an extension of the expiry date until 3 or 4 April 2017 when the Board would meet to review the offer formally (which Mr Rodgers had essentially agreed to), and (d) would prefer a merger, or a similar offer to the vessels-only offer but on a smaller scale.

On 17 March 2017 Mr Kirk set out his views on a share for share merger, in the light of the apparent wish of the Gener8 shareholders for a full merger. On 15 May 2017 Mr Kirk gave his views on the relative merits of a stock-for-stock merger vs cash tender on 15 May 2017. The latter email was forwarded to Euronav, who asked SewKis to discuss the issues it raised with Euronav’s Belgian lawyers.

Over the ensuing months, RMK liaised with private equity investors. RMK also further updated the Board Book, Acquisition Model, and 9-Pagers(Pitch Book), focussing on understanding the valuations of Euronav and Gener8, including by reference to Gener8’s debt and vessel earnings, to help Euronav assess the financial health of Gener8 and to assist with eventual negotiations.

In view of the feedback from the Gener8 board, for a short period beginning on 5 April 2017 Euronav’s attention shifted towards an attempt to purchase Gener8’s assets as part of a potential joint bid with another large tanker operator, Frontline. The idea was that Euronav would purchase six of the Korean-built vessels from Gener8 for US$ 447,500,000, and Frontline would merge with the post-transaction Gener8. However, this concept was not pursued to the stage of making an offer to Gener8’s board, and by 14 April 2017 it was apparent that the Gener8’s existing shareholders, including Blackrock and Blue Mountain, would only be interested in a share-for-share merger.

Gener8 had not formally responded to Euronav’s vessels-only offer, and on 18 April 2017 Mr Kirk wrote to Mr Rodgers and Mr de Stoop suggesting that “it would make sense for you to give your authorization for me to have a meeting with Peter G[eorgiopoulos] to discuss the EURN approach for vessels. It may be easier for him to speak openly to an intermediary and it seems that at a minimum we should be able to get some idea of his preference”. In response, Mr Rodgers asked Mr Kirk to “Do nothing at the moment” and indicated that he would speak to Mr Georgopoulos in due course.

Gener8 wrote to Euronav on 25 April 2017 with its own merger offer. The Gener8 offer was for a share-for-share deal on the basis of a merger of equals, whereby the Euronav shareholders would hold 53.7% of the combined company and Gener8 shareholders would hold 46.3%. The offer was premised on Gener8 having obtained a new and unnamed investor who was said to be willing to invest US$500 million in new equity concurrently with the merger. The letter noted that Gener8’s Board of Directors had formed a committee of disinterested directors, chaired by Mr Steve Smith, to engage with Euronav and Gener8’s stakeholders, and that the committee was being advised by UBS.

It appears that Euronav did not immediately inform Mr Kirk of the Gener8 offer, and in early May 2017 Mr Kirk was looking for ways to “make sure that RMK is being helpful where needed and is being proactive on any analysis”. He seems to have been updated on the position in a telephone call with Mr de Stoop on 9 May 2017.

RMK carried out some analysis of what a merger could look like, and (with the assistance of SewKis) considered how such a deal for Gener8 could be structured – either as a share-for-share deal or a cash tender. In addition, at the request and with the input of Mr de Stoop, Mr Kirk updated the ‘offer case’ 9-Pager (part of the Pitch Book) (a) to reflect the changes in Euronav and Gener8’s respective financial positions since it had been last updated, and (b) to assess what the transaction would look like if it were done by way of either a share-for-share merger or a cash tender.

Euronav continued to consider alternative options, including a form of acquisition of some of Gener8’s vessels rather than the entire company. It became apparent that Frontline was seeking to acquire Gener8 on its own, and Euronav and Frontline reached an understanding whereby Euronav would assist with funding Frontline’s acquisition of Gener8 by buying a block of ships from Frontline post-merger. However, negotiations between Frontline and Gener8 reached an impasse, due in particular to Frontline’s falling share price, and it became apparent by 8 June 2017 that Frontline had retreated from its attempt to purchase Gener8.

On 20 June 2017, Mr Kirk provided Mr de Stoop with brief commentary on other listed potential “suitors”, other than Frontline, who might be interested in acquiring and merging with Gener8 in conjunction with Euronav.

In late June 2017, it transpired that another large tanker operator, International Seaways, was also attempting to acquire Gener8. As with the Frontline proposal, Euronav raised the idea of a joint bid whereby it would take Gener8’s 12 modern Korean-built vessels (one of the original 13 having been sold). On 26 June 2017, pursuant to a request from Mr de Stoop, Mr Kirk provided Euronav with analysis of a joint bid for Gener8 by Euronav and International Seaways. In the event, International Seaways was not interested in the proposal.

Following a call between Euronav, RMK and Blackrock on 30 June 2017, the potential for a share-for-share merger between Euronav and Gener8 was revived. It was agreed that Euronav would engage with Gener8’s independent committee, and “UBS and RMK will compare notes as far as NAV is concerned going line by line (value of each ship)”. In the meantime, Euronav would work with RMK to go through each of Euronav and Gener8’s fleet to assess NAV before RMK discussed it with UBS.

Accordingly, Mr Kirk contacted the chair of the independent committee, Steve Smith, on 30 June 2017, explaining that “[i]t would be helpful for EURN to better understand GNR’'s NAV methodology”, and requesting that UBS “send over their vessel value / NAV spreadsheet” or, given that Mr Kirk was based in New York, sit down with them the following week to discuss. Steve Smith informed Mr Kirk that he should feel free to contact the committee’s advisor at UBS, Mr Simon Smith, who had been forewarned of UBS and RMK needing to consider UBS’s NAV calculations. Mr Kirk made his first contact with UBS on 1 July 2017, seeking to arrange a meeting where he and UBS could go through Gener8’s NAV. On 2 July Mr Kirk forwarded UBS’s NAV analysis to Euronav, proposing a call with Euronav, and said he would do some analysis of it.

On 4 July 2017, Mr Kirk reported the “great news” that UBS were using very realistic vessel values, identifying only four principal areas of difference. On 5 July 2017, following a meeting with UBS, Mr Kirk confirmed “BIG PICTURE, we are A LOT closer on values than we anticipated” and identified a small number of issues and questions. On 6 July 2017, Mr Kirk identified the limited questions he planned to ask UBS and told Mr de Stoop that “I view the meeting [with UBS] as fact-finding and then we can circle up and go back to them with our thoughts on NAV’s for both Companies and the discount level that we believe makes sense. Let me know if there is anything else I should be asking and/or if you have any different views on the goals of the meeting or overall tact.” Mr de Stoop responded saying that they were “very good questions for a first meeting”, and adding a few questions of his own. In response to Mr Kirk’s spreadsheet of charter-adjusted values, Mr de Stoop said “I am not sure I would go into so much detail with UBS as it is more important to agree on the principles behind NAV and premiums and discounts.” After the initial meeting on 6 July 2017 in New York, Mr Kirk confirmed to Euronav the answers to the questions raised and sent a short list of the information that UBS had agreed to provide.

The fees and expenses incurred in effecting the proposed merger, as well as the costs of post-merger consolidation, logically fell to be deducted from the relevant party’s NAV for merger pricing purposes (i.e. to work out in what proportions Euronav’s and Gener8’s shareholders would hold shares in the merged company). It was therefore necessary to know what Euronav’s own deal fees and consolidation costs would be, as well as Gener8’s.

On 5 July 2017 Mr Kirk sent Mr de Stoop a breakdown of deal fees and expenses. His list of deal fees included the following commentary:-

“5.

EURN Bankers / Legal – EURN does not need to hire another investment bank and thus the $12 million less EURN’s legal expense is enough for RMK (essentially a 50 bps Transaction fee, which is very cheap given the work).” 

It appears that the original US$18m assumption referred to in RMK’s November 2016 9-pagers (see §§ 96 above) had been reduced to US$ 12 million, because by this stage it was clear that no capital raising would be required.

Mr de Stoop replied with annotated responses to Mr Kirk’s message on 6 July 2017, including the following on Mr Kirk’s paragraph 5-:

“Our board is very likely to wish a fairness opinion and in any event we will have audit fees related to fairness opinion and consolidation costs. None of these can be done by RMK and we will therefore need to hire another bank.” 

The Claimants submit that this email exchange, viewed objectively, conveyed that Euronav accepted that RMK was working beyond the contractual scope of the Advisory Agreement and was thus entitled to further fees of the order of 50 bps (around US$8.5 million on a US$1.7 billion deal). I disagree. As Mr Rodgers pointed out during the cross-examination to which I refer below, the nature of this email exchange was a discussion about costs to be deducted for NAV calculations. It in no sense purported to be a reopening, as between RMK and Euronav, of their existing fee agreement as set out in the Advisory Agreement. Even if it had been, it is unrealistic to construe Mr de Stoop’s low-key rebuff, to Mr Kirk’s somewhat brazen attempt to introduce an assumption that RMK would be paid something in the region of US$ 8.5 million rather than the agreed US$ 2 million, as an implicit acceptance either (a) that RMK was doing extra-contractual work or (b) that RMK was accordingly entitled to additional fees.

Despite the very limited nature of the email exchange, Mr de Stoop and Mr Rodgers were cross-examined at length about it, with the cross-examination of Mr Rodgers also straying into assurances said to have been given on unspecified previous occasions.

It was suggested to Mr de Stoop that Mr Kirk’s comment in his 5 July 2017 email made clear that he considered RMK to be entitled to a 50 bp fee. Mr de Stoop replied that that was Mr Kirk’s opinion, and that he was ‘fishing’ for such a fee. Mr de Stoop explained his attitude to the exchange in this oral evidence:-

“Q. Now, if you thought that that was something that he was not entitled to you would have said clearly in your response "What are you talking about? You're not entitled to a fee of anything like that", at that sort of level, wouldn't you?

A. It depends on the intensity of the conversation at that time. As you can see it was an email full of different -- well assumptions that we were being – well discussing and taking into a table that would have had an impact on the NAV. At that time we were very focused on the deal and I find it -- well, very subtle but to a certain extent very sneaky to insert an increase of the fees in a bullet point in this kind of email. So I would not even consider that this was serious. I think this was fishy [fishing]. If he would've been very serious about it he would've sent a separate email. He would've read the agreement. In the agreement it is said -- it says that if you want to change the agreement you need to do that in writing, but not in the sneaky way in the middle of an email that has nothing to do with that, otherwise he's not serious about it. And that's quite frankly when Paddy and I saw that, this, we couldn't believe they were serious about it. But frankly speaking, given the intensity of the conversation and the importance of that work, you're not going to have a separate conversation with someone who is just coming in fishing.

Q. You reply to what Mr Kirk has said and you make no mention of his discussion of the RMK fee.

A. Not exactly --

Q. It's not as if point 5 goes without comment. You do reply to it, don't you?

A. Absolutely. In a way that for me is very clear that there is no room for 50 basis point for them. There's absolutely no room. …” (Day 5/160-162)

That evidence in my view accurately reflects how the email exchange should objectively be regarded. Mr Kirk’s comment, in the middle of an email dealing with expenses to be deducted from NAVs, seemingly attempted by a sidewind to engender or purportedly confirm an assumption that RMK would receive a far higher fee than it had bargained for. Mr de Stoop dealt with it at the time by making the point that there would be no room for Euronav to pay a fee of that order. Insofar as his response might be taken to involve some form of tacit acquiescence in the view that RMK would or might ultimately receive more than the US$ 2 million provided for in the Advisory Agreement, such tacit acquiescence was entirely consistent with the idea of Euronav contemplating a discretionary bonus for work done under the Advisory Agreement but which had been done well and/or which had involved more time and effort than had been anticipated at the outset.

Mr Rodgers said he would almost certainly have seen the email exchange at the time. He said:-

“I'm, my Lord, inclined to make this comment which is this is not a serious statement of somebody wanting an increase in their fees. This is both flip and glib to put this in like this in the middle of an email, somewhere between the soup and the potatoes and ask for a 400/500 per cent increase in the amount of fees you are to be paid, especially when you're a sole practitioner on the business.… ” (Day 4/143-144)

Mr Rodgers said the email was “enough to make my blood boil”, but that he did not respond himself because Mr de Stoop was handing the correspondence. He added:-

“A. … This is in order to establish different elements within a model of how a transaction might look in terms of relative value of shareholders. This is not an expression directly from a company to say I've really got to raise the matter of fees with you now or I'll stop work. I need to be paid 50 basis points or I'll stop work or this is not acceptable, I want to revise the terms of the agreement or I'll stop work.” (Day 4/145-146)

Shortly afterwards there was the following exchange:-

“And anyone reading that would understand that Mr Kirk is saying the work that we're doing is beyond the advisory agreement. And "We want a fee of 50 basis points." Isn't that right?

A. They would, yes.

Q. Indeed, that that is what Mr Kirk considers them to be entitled to?

A. And so it's -- sorry, but as I would just point out, that what -- the assertion you're making is that there was a serious claim made in this document for both an amount and the quality of work done and it's done in two lines when there's already an agreement in place that deals through transaction with fees and timing of fees and the work to be done, and this is meant to be the serious application for them -- from them, for a complete change of the agreement between us. That would seem remarkably strange to me, my Lord.” (Day 4/147)

Mr Rodgers rejected the suggestions that he did not respond himself to the email because he accepted that the work RMK was doing was far beyond the scope of the Advisory Agreement, and that he considered 50bp to be an appropriate fee for the work.

It was then put to Mr Rodgers that he had, by this stage, repeatedly assured Mr Kirk that he would be paid an appropriate fee for the work. Mr Rodgers indicated that he thought he had said that “we would take care of them” or “we’ll make sure we recognise their endeavour”, and that “it was much more conversational but it was around the word that we recognise that this had been well delivered and that we would pay a bonus” (Day 4/149). Mr Rodgers accepted that, when saying so, he did not qualify it by telling RMK that they were only entitled to US$ 2 million; but said Euronav also told RMK that they had negotiated a contract which covered the whole of the transaction. He regarded any additional payment as a bonus for contractual work that had been done very well. He was unable to say that he told RMK in terms that what he had in mind was a “discretionary” bonus, but said he never acknowledged to RMK at any time that Euronav felt indebted to make the payment to them on any other basis than a discretionary basis. Mr Rodgers concluded this part of his oral evidence by saying “[th]e fact is that they had a fully negotiated and settled agreement with us and we had said that we were going to pay them a bonus” (Day 4/157).

RMK submits that Mr Rodgers’s evidence is “fatal” to Euronav’s argument that any further payment would be a discretionary bonus, because he accepted that RMK thought they were doing work outside the scope of the Advisory Agreement, and made assurances without qualifying them by saying RMK was entitled to only US$ 2 million and that anything further would be in Euronav’s discretion.

I am unable to accept that submission. First, I do not agree that the comment in Mr Kirk’s 5 July 2017 email was, read objectively, saying that RMK was working beyond the scope of the Advisory Agreement: even if Mr Rodger did view the comment in that way (as his initial answer to the compound question at the beginning of the exchange quoted in § 145 above might seem to suggest). Secondly, statements to the effect that Euronav would ‘take care of’ RMK or recognise their endeavour are at least equally consistent with an understanding that Euronav intended to give RMK a discretionary bonus to recognise the fact that their work under the Advisory Agreement had been very good and/or successful, and/or that that work had taken more time and effort than had been anticipated at the outset. There was no need for Mr Rodgers expressly to qualify such assurances by stating in terms that any such payment would be discretionary. Nor did any such assurances imply acceptance of RMK’s apparent belief that they were doing work outside the scope of the Advisory Agreement, even if the 5 July 2017 email could objectively be construed as making that assertion.

Further discussions then took place between UBS and Mr Kirk, up to the end of July 2017, about the parties’ respective NAV calculations. These discussions required RMK and UBS to understand, among other things, (a) the numbers that made up their respective NAV calculations, (b) the values they respectively placed on the parties’ assets (primarily their respective fleets) and how those valuations were arrived at, (c) what inputs should or should not be included in assessing a company’s NAV, including whether working capital was to be included, and (d) any further sums that needed to be deducted from the parties’ NAV calculations. RMK’s evidence is that its work following the 6 July 2017 meeting included obtaining and reviewing information from UBS in relation to Gener8’s NAV, providing Acquisition Models to UBS, addressing budgeting and other queries raised by UBS, analysing Euronav’s revenue streams and FSO JV values, and populating and updating RMK’s data room housing information for the purposes of due diligence.

On the Euronav side, the further discussions included regular liaison between Mr Kirk and Mr de Stoop. The starting point for both parties was the vesselsvalue.com valuation of each vessel, in respect of which Mr de Stoop had applied discounts to reflect where the ships were built (with Korean-built ships being valued at a premium to certain Chinese-built ships), their age, and whether Gener8 had been unsuccessfully marketing them for sale.

There were also discussions between RMK and Euronav during July 2017 about the valuation of (a) Euronav’s FSOs which it operated as part of a joint venture with International Seaways, (b) its fleet on a charter-adjusted basis, as well as goodwill of long-term charter relationships that Euronav had, and (c) its ‘French Flag Business Unit’ which was a relatively niche business related to the supply of oil to the French state by French-flagged vessels.

As to Euronav’s fleet, on 4 July 2017 Mr Kirk sent Mr de Stoop a spreadsheet of charter-adjusted values, asking him to verify the charter rates/duration, double check that there were no new charters to add, and double check the market charter for the equivalent period. Mr Kirk noted that the values provided a NPV of more than $26 million for EURN in charter-adjusted value. On 6 July 2017 Mr de Stoop replied setting out the latest market assessment (time charter rates) that Euronav had obtained from Clarksons (for VLCCs) and from Braemar (for Suezmax tankers). Mr Kirk gave provided updated spreadsheets on 11 July 2017 indicating a positive value of about US$ 30 million for Euronav’s time charters compared to current market rates. Mr Kirk provided a further updated spreadsheet on 21 July 2017 after Mr de Stoop had provided the latest market assumptions to him (provided to him by Mr Rodgers/Clarksons). Following further input from Mr de Stoop later the same day, the calculation was circulated to UBS.

In relation to Gener8’s fleet, Mr Kirk emailed Euronav on 8 July 2017 to confirm the proposed value reductions compared to current vesselvalue.com values. He set out his views and suggestions as follows (which I quote in order to give the full flavour):-

“First of all, I want to mention that using VV.com is a great situation for EURN as the acquirer given that VV.com is lower than ALL equity analysts and given GNRT's higher relative leverage that hurts GNRT's NAV disproportionately to EURN.

Furthermore, we are making some additional value reductions for the GNRT Fleet (these are in addition to some other value reductions, which I will send over the weekend).

NON-KOREAN BUILT VLCC Adjustments

I have attached a spreadsheet that shows the GNRT NBs and values by ship! shipyard.

Hugo and I discussed adjusting the values based on the shipyard price difference (which I think makes a ton of sense given that the ships are only about 1yr old on average) and so it seems a fair (and effectively unbiased comparison).

You'll see that the Subic ship values need to be reduced by an additional $2.8 million per vessel in order for the parity price to compare to a $5 million shipyard difference.

The Chinese built ships currently have a $4.4 million difference? Is this enough or would the shipyard price difference be greater than this $4.4 million? If so, we should also reduce the Chinese built vessels by that amount.

VESSELS TO-BE-SOLD Adjustments

I think we keep this simple. They recently sold the Gener8 Orion, which as of July 7th (the date of our VV.com valuations) had a value of $14.69 million and they received net proceeds on the sale of $12.9 million. This is a shortfall on VV.com figures of 12.2%.

The Gener8 Daphne which they sold in March had a VV.com valuation the day prior to the sale of $11.57 million and they sold the vessel for net proceeds of $10.3 million. This is shortfall of 11.0%

I would suggest that we use 12.0% as are assumed discount on the 8 vessels to-be-sold. This means the 8 vessels in question are to be sold for the following amounts (shown with the age and scrap value of each ship — assuming scrap at $360 per ton).

[table omitted]

Please confirm the discount on the vessels-to-be-sold and let me know if there should be a further discount on the Chinese built vessels (over the $4.4 million per vessel figure).”

Mr de Stoop responded with some comments on 9 July 2017. Mr Kirk then on 10 July 2017 sent Mr de Stoop a proposed NAV calculation for Gener8, with commentary and seeking input. After further comments from Mr de Stoop, this was agreed.

As to the FSO JV, as of 14 July 2017 Mr Kirk’s figures assumed a value for this business of US$ 250 million. Presumably following a discussion with Euronav, Mr Kirk the same day sent fleet values to UBS but without the FSO JV. On 19 July Mr Kirk sent draft calculations to Mr de Stoop based on the charter rates for the units, various projected incomes, scrap value and discount rates (the data having come from Euronav). Mr de Stoop responded the same day making various adjustments, resulting in a NPV of US$ 276.2 million. Mr Kirk then proposed reducing the discount rate from 20% to 15%. The resulting calculation, stating the NPV of the business at US$ 290 million, was then sent to UBS.

As to the French Flag Business Unit, on 20 July 2017 Mr de Stoop said in an email to Mr Kirk “I would suggest to take the year 2016 revenues, deduct EUR ($900k) of cost and multiply it by a multiple of 8”. Mr Kirk replied that that rationale made a lot a sense, and sent UBS a proposed valuation on that basis.

As to long-term business relationships, Mr de Stoop explained in his evidence that Euronav had created some good will with different companies due to renewal contracts – for example, its oil major contracts had been continuously renewed for the past 10 years and would be renewed for the next 10 years – and felt they should have some value in the merger transaction. He said, and Mr Kirk accepted in cross-examination, that it was Mr de Stoop’s idea to place a value on these relationships. On 21 July 2017 Mr Kirk sent Mr de Stoop a spreadsheet attempting to calculate the value, based on a breakdown of historic revenue from long-term charterers, valuing the long-term relationships at US$24.1m using a 3x EBITDA multiple. In response, Mr de Stoop explained that had been thinking about it and trying to put himself in the shoes of UBS/Gener8. On this basis, he thought that there were two or three ways to value the long-term relationships. In the end, having considered the various methods, he thought that they should adopt a goodwill approach, putting forward the calculation method Mr Kirk had proposed, and “shoot for the moon and if we miss we will end up in the stars…”. Mr Kirk then emailed UBS on this topic, providing calculations. Mr de Stoop thanked Mr Kirk for this on 22 July. The value ultimately agreed with UBS was US$19.2 million.

On 27 July 2017, Mr Kirk sent UBS his NAV comparison on behalf of Euronav. On 31 July 2017, Euronav wrote to Steve Smith of Gener8’s independent committee explaining that Euronav had now sent UBS all its information on the NAV and given its views on Gener8’s NAV; if Mr Smith wanted to continue discussions with Euronav, then the next step was for his team to compile a list of points and principles that were agreed, and more importantly, things that required further discussion; once that was provided, a meeting should take place between Euronav and Mr Smith to allow the parties to explain their views face to face.

Mr Smith agreed with that approach, and on 4 August 2017 sent a document setting out points of difference on the NAV, and two areas in particular where Gener8 required additional information in order properly to assess Euronav’s NAV: the French Flag Business Unit and Euronav’s time charter adjustments. Mr de Stoop forwarded this to Mr Kirk, who responded the same day with his comments on the various contested and agreed items relating to Gener8’s and Euronav’s respective NAVs. On 12 August 2017 Mr Kirk sent Euronav a further revised spreadsheet of charter-adjusted values for Euronav’s fleet, with commentary, as well as a spreadsheet about a proposed sale and leaseback transaction involving Gener8 vessels. Mr de Stoop replied indicating that he was fine with Mr Kirk’s approach, subject to a point about Gener8 operating expenses, leading Mr Kirk to re-run the analysis on 14 August.

A meeting then took place on 17 August 2017 between Mr Rodgers and Mr de Stoop for Euronav, Steve Smith for Genr8, and Mr Kirk at which several points were agreed as to the NAV calculations. A limited number of items were left to be agreed, including (a) the discount to be applied in respect of certain vessels from the vesselsvalue.com value, (b) the charter-adjusted value for Euronav’s fleet, (c) the value of the FSO units, (d) the value of the French Flag Business Unit, and (d) the value of long-term charter relationships. Mr Kirk on 18 August sent an email aiming to summarise the outcome, which he said reflects the NAV discussion on Thursday with Euronav management and Steve Smith”.

One of the points agreed at the 17 August 2017 meeting was that each side would be responsible for their legal, financial and other advisors’ fees on the transaction. By this stage, Euronav’s stated estimated deal fees, as reflected in the NAV analysis sent to UBS on 26 July 2017, had been reduced to US$ 6 million.

Mr Kirk’s evidence was that, during the 17 August meeting, Mr Smith of Gener8 queried the US$ $6 million allocation on the Euronav side, remarking that RMK’s fee could not have been included in that figure as it would never be sufficient to cover M&A advisory work for a deal of this magnitude. Mr Kirk described the moment as “awkward”. Mr Kirk said Mr Smith added that if he had known that Euronav’s M&A advisor would be present at the meeting, then he would have brought his own. Mr Smith’s written evidence was to similar effect: he said he had been surprised to see Mr Kirk at the meeting because he had always taken RMK to be acting as Euronav’s M&A advisers on the transaction; and that, had he known RMK would be present, he would have arranged for UBS to be there too.

Mr Rodgers said in his statement and his oral evidence that he did not recall those things having been said, and would have been surprised by the enquiry. Mr de Stoop in cross-examination did not recall specific mention of RMK’s fee, but recalled that Mr Smith was asking a number of questions about the fees and thought Euronav’s overall figure seemed very low, especially because on their side the figure was more than US$ 10 million. I consider it likely, in light of this evidence taken together, that Gener8 queried at least the overall level of RMK’s fees. That may well have triggered the post-meeting discussion considered below.

Mr Kirk’s evidence was that after Mr Smith left the meeting, Mr Kirk raised the issue of RMK’s fee with Mr Rodgers and Mr de Stoop. Mr Rodgers asked what RMK expected.  Mr Kirk suggested a fee in excess of $10 million, to which Mr Rodgers responded aggressively: “If you ever say that again, we will stick to the contract.”  Mr Kirk said in his witness statement that “given [Mr Rodgers’s] aggressive response, I did not push the matter any further because there was a lot of work left to be done (nearly a year’s worth) and I figured they would better understand the figure when they saw the workload”. In oral evidence, Mr Kirk added that there was fortunately no need to press the matter further after Mr de Stoop’s email the following day (see section (E)(11) below).

Mr Rodgers in his witness statement said that, while it was difficult to recall whether he used those exact words, he did not disagree that he made clear that Euronav were entitled to stick to the Advisory Agreement when it came to remuneration. Euronav were open to the possibility of making a discretionary payment to RMK at the end of the transaction, but one which was reasonable in the circumstances and reflected the fact that Euronav and RMK already had a remuneration structure in place. In his oral evidence, Mr Rodgers said the alleged conversation referred to above “nicely characterises the conversations I had with RMK over this course of action”, and remembered having a conversation along those lines, though he could not remember when it took place. He did not accept that he was thereby acknowledging that RMK was doing work outside the scope of the Advisory Agreement, and said the reason for asking Mr Kirk what he thought the fee should be would have been that Mr Rodgers wanted to know what Mr Kirk was thinking. Challenged on that point, he said:-

“A. I think it's very important whenever you're paying bonuses or making any payments that you'd like to know how they're going to land. So I don't think it's unreasonable to ask them what their expectation might be.”

That is, to my mind, entirely cogent. Mr de Stoop said that, having been reminded of it in cross-examination, he remembered the conversation taking place though not where or when. I consider it probable that Mr Rodgers did saying something along the lines quoted in § 164, mostly likely in the discussion immediately after the 17 August meeting with Gener8.

RMK submits that (i) any reasonable person in Mr Kirk’s position would believe that, by asking what he thought the fee should be, Mr Rodgers was acknowledging that RMK was “entitled to additional fees for additional work”¸ and (ii) the necessary implication of Mr Rodgers’ threat to stick to the contract was that the parties were not sticking to the contract and would continue not to do so, and that the Advisory Agreement constrained neither RMK’s work scope nor its remuneration.

I disagree. The most natural interpretation of Mr Rodgers’ response is that Euronav considered itself entitled to stick to the Advisory Agreement (i.e. RMK was not entitled to further fees), that Euronav was willing to contemplate a discretionary bonus, but that Euronav would not be willing to pay one if RMK continued to be excessively ambitious about the amount it might receive. I do not consider Mr Rodgers’s response to have indicated any acceptance that RMK was working beyond the scope of the Advisory Agreement or that it had an entitlement to additional payment. Further, the exchange lends support to the view that (a) RMK had not taken the 5-6 July 2017 email exchange as an assurance that Euronav would pay it a 50bps fee, and (b) even if RMK had done so, the 18 August 2017 conversation made clear that Euronav in fact had no such intention.

RMK submitted in its written closing that, even if it is wrong about its construction of clause 1.1(v) of the Advisory Agreement, Euronav is estopped from relying on this, citing Particulars of Claim §§41 to 42. This suggestion does not appear to have put forward at any other point during the trial, and was not developed in any oral submissions. Paragraphs 39 to 42 of the Particulars of Claim allege:-

“39.

Following the provision of the deal fees and expenses schedule to UBS, on 17 August 2017, Mr Rodgers and Mr de Stoop and Mr Kirk met in London with Mr Steven Smith who was a Gener8 Board Member and head of its Transaction Committee to discuss the share ratio for the merger.

40.

After this meeting, Mr Kirk discussed the topic of fees with Mr Rodgers and Mr de Stoop and stated that RMK would require an additional payment for the M&A work

being done on behalf of Euronav. Euronav advised that they could not agree to a particular figure but represented and confirmed that they would ensure that RMK received a fee that would remunerate them for the M&A advisory work that was being done.

41.

In the premises, Euronav and RMK agreed and/or it was their common understanding, which was mutually expressed and/or Euronav represented that:

41(1) RMK would continue to serve as Euronav’s M&A advisor until the merger was completed;

41(2) RMK would provide services over and above those stipulated for in the original Advisory Agreement

41(3) RMK would therefore receive a fee over and above that payable to RMK Europe under the original Advisory Agreement.

42.

RMK relied on Euronav’s representations to this effect in carrying out the work set out below.”

In my view, the evidence does not show that any of the representations alleged in Particulars of Claim § 41 was made. The gist of what Euronav was, rather, as indicated in § 167 above. The alleged estoppel therefore does not get off the ground.

The following day, 18 August 2017, Mr de Stoop sent Mr Kirk an email headed “Company Specific Transaction Expenses” saying:-

“We need to include a fee to be paid to Navig8 to take the ships out of their system early.

As far as that item is concerned for Euronav, I suggest to increase it to $10m. This should cover the fairness opinion as well as the slightly more complicated Transaction structure (we already made progress with lawyers) and Tax consultancy. RMK fee will be what it will be but as far as this exercise is concerned we stick to the contract we have and that can be DD [i.e. the subject of ‘due diligence’ checks] by the other side.

Could you send me what you intend to send to UBS.”

The ‘exercise’ referred to was, once again, the calculation of the parties’ respective NAVs for merger pricing purposes. Euronav had an incentive to minimise its estimated fees so as to maximise its NAV. Thus, RMK says, Mr de Stoop email must have been a response to the discussion the previous day about RMK’s fees, and Mr Kirk said he took it as an increase in RMK’s fee to US$ 10 million, understanding that “every bit of that increase was for RMK”.

However, the email did not say that, and it would have been directly contrary to Mr Rodgers’ vehement rejection the previous day of the notion that RMK would end up being paid as much as US$ 10 million. The reference to RMK’s fee being “what it will be” was consistent with the possibility of Euronav deciding to pay RMK a discretionary bonus. Mr de Stoop in cross-examination gave this evidence:-

“A. It's -- it's too long ago but I suspect that we were very pleased with the work that RMK had done. We have a tradition at Euronav to pay bonus when we are very happy about work that people do. And so indeed I am pretty sure that we were intending to pay a bonus.

Q. Well, let's take it in stages. First of all you accept that this was a recognition on your part that Euronav would pay RMK more than $2 million. Isn't that right?

A. I think that was our discretion and it remains or it remains our discretion. So no decision had been made.

Q. But again, when you spoke to Mr Kirk about the subject of fees, you did not say to him that any additional payment would be discretionary, did you?

A. I didn't say the contrary either.” (Day 6/11)

RMK suggests that because Mr de Stoop did not expressly state that any additional payment to RMK would be in Euronav’s discretion, his message should be taken as an acceptance that RMK was entitled to further payment and that the increase from US$ 6 million to US$ 10 million was in order to pay RMK more. That simply does not follow. Even if part of Mr de Stoop’s thinking in increasing the allowance was to allow some ‘headroom’ to pay RMK a bonus, his message cannot reasonably be construed as an acceptance that RMK had any entitlement to additional fees or that it was performing extra-contractual work. In addition, Mr de Stoop had the previous day said, as part of the evidence I quote in § 114 above, that it had been mentioned on several occasions that any additional payment would be discretionary. Even though he was unable to say that he made that point positively on this particular occasion, it must be viewed in the context of his evidence about the tenor of the discussions as a whole.

Further NAV discussions continued between UBS and Mr Kirk (working closely with Mr de Stoop in particular), during which the parties addressed (a) the valuation of Euronav’s FSOs, (b) the valuation of the parties’ respective fleets (with the parties ultimately agreeing to obtain valuations from the ship broker Clarksons, rather than relying solely on the valuations obtained from vesselsvalue.com), and (c) the charter-adjusted valuations of their respective fleets, which the parties agreed would be carried out by reference to Clarksons valuations. RMK also continued to liaise with Gener8 and various of its shareholders.

On 19 August 2017, Ms Qi of UBS queried the 8.5x EBITDA multiple that RMK had applied in respect of the French Flag Business Unit, which Mr Kirk discussed internally with Mr de Stoop. This resulted in Mr Kirk’s response to Ms Qi on the same day. On 27 September 2017, Mr Kirk sent a NAV analysis, one element of which was an “assumed ‘middle-of-the-road’ agreement” on a 6x EBITDA multiple. After Mr Kirk obtained Mr de Stoop’s sign off to send to UBS, this multiple was applied in the NAV calculation circulated on 28 September 2017. This multiple was accepted by UBS and represented value of US$49.2m for Euronav. Whilst RMK opened the case on the basis that this was one of the areas in which it had provided ‘valuation advice’ to Euronav, it is evident that that was not the case. Mr de Stoop’s evidence was that RMK had no role in determining the value of the French Flag Business Unit, beyond plugging in figures which Mr de Stoop had negotiated into the model, and that Mr Kirk did not really understand the unit. Mr Kirk accepted in his oral evidence that concept of placing a value on the French Flag Business Unit, and the data for calculating it, came from Euronav; and Mr Kirk then calculated an EBITDA figure, presented the figures to UBS and debated the EBITDA multiple with them. Mr De Stoop may have gone slightly too far, at one point in his cross-examination, by using the term “postman” to refer to RMK’s role in this part of the transaction, I consider that the documents support his evidence that it was an area of particular sensitivity in which he, Mr De Stoop, played the major role.

In the meantime, further thought was given to transaction structure. On 20 August 2017 Mr Kirk updated the 9-Pagers (Pitch Book), setting out the proposed structure of the deal as a share-for-share merger, with a private placement to raise financing in order to ensure post-merger liquidity. He also noted that if Euronav decided to sell six of its Chinese-built vessels, then a capital raise through the proposed private placement would be unnecessary. Further updates to the 9-Pagers were made on 5 and 9 September 2017 on the alternative bases of (a) a share-for-share merger with a private placement, and (b) a share-for-share merger and the sale of the six Chinese-built vessels.

The 9 pagers were ultimately used as part of the material sent to Euronav’s Board on 10 September 2017 to explain the potential financing structures for the acquisition.

On 23 August 2017, Mr de Stoop emailed Mr Kirk the latest NAV calculation, and stated, “To do: Charter Adjustment Value: Broker to opine.” Mr Kirk provided a “realistic transaction NAV” to Euronav on 26 August 2017. Clarksons on 11 September 2017 provided an aggregate charter adjusted value of US$41.25 million, based on inter alia four newbuilds being given a charter-free valuation of US$60.5m each and a charter-adjusted valuation of US$65m each, giving a charter-adjusted value (i.e. the aggregate positive value of the time charters compared to market rates) for those four vessels of US$18 million. Mr Kirk told Mr de Stoop by email on 11 September 2017 this that was far lower than ‘our’ figure, which used a total charter-adjusted value of $54 million for the newbuilds. Mr Kirk on 13 September provided an “updated file on the charter adjusted value”, proposing various adjustments to the Clarksons valuations, and suggested that Mr de Stoop should push back with Clarksons in relation to them. Euronav then discussed the valuations with Clarksons, and Mr de Stoop told Mr Kirk later that day that “We made good progress this morning when we spoke to them…let’s see what they come up with.” On 20 September 2017, Mr de Stoop reverted to confirm that Clarksons had increased their valuations. The valuations increased to US$60.5m per vessel charter free, and US$71m per vessel charter-adjusted, equating to an aggregate charter-adjusted value of US$ 42 million for the four newbuilds. Mr Kirk commented on those valuations on 21 September 2017. He provided Euronav with an updated NAV analysis, using Clarksons’ values, on 27 September 2017, which was then sent to UBS on 27 September 2017. Following comments from UBS, Mr Kirk made some negotiating suggestions to Euronav on 2 and 4 October 2017. The overall charter-adjusted value ultimately agreed with UBS was US$ 65.3 million.

Mr de Stoop’s 23 August 2017 ‘to do’ list also included an entry for the FSO JV, saying To be agreed and according to Steve we could meet in the middle $250-$265m”. Mr Kirk sent Mr de Stoop an updated DCF (discounted cash flow) analysis of the value of the FSO JV on 25 August 2017 following a discussion. UBS on 29 August valued Euronav’s 50% share of the joint venture at US$ 250 million. On 30 August 2017, Mr Kirk asked UBS for more information, and updated Mr de Stoop on progress. On 31 August and 5 September, Mr Kirk worked with UBS to create an “apple-to-apples” FSO JV valuation to seek to resolve the parties’ differences, as Mr Kirk reported to Mr de Stoop. UBS noted that RMK’s numbers did not appear to cover any tax liability, and on 6 September, Mr de Stoop asked Mr Kirk to build tax liability into RMK’s model. On 6 September, Mr Kirk sent updated calculations to UBS. As discussed in advance with Mr de Stoop, he told UBS that these reduced the average expected value of the business to US$ 286.1 million, and that Euronav management were willing to move as low as US$ 277 million. On 7 September Mr Kirk added that he had just spoken to Euronav management and that “[t]he request is, whatever your proposed FSO value, that UBS comes back with a detailed explanation of how that number was calculated”.

It appears that UBS suggested that Euronav check with its JV partner, International Seaways, why it valued the JV lower, viz US$ 250 million per 50% share. Mr de Stoop did contact International Seaways to enquire about its valuation, and International Seaways explained that the figure was “only marginally meaningful... [and] was set a level slightly lower than the value we used for accounting purposes at December 2016.” They also explained that they did this to avoid push back from the lender group. Mr de Stoop updated Mr Kirk on 15 September 2017 about his discussions with International Seaways, including how International Seaways calculated the value on its internal model (which showed a value higher than US$ 250m), and explained that Euronav had “tangible arguments with what UBS used against us”.

In the meantime, Mr de Stoop on 12 September 2017 contacted Steve Smith of Gener8 direct, noting that “we feel that our respective advisors have made good progress but have reached their limits on a few items” and suggesting a call. On 15 September 2017, Mr Smith of Gener8 contacted Mr de Stoop direct to discuss the FSO value. Mr de Stoop explained aspects of his discussions with International Seaways to Mr Smith and explained that Mr Kirk was in the process of sending two models to UBS (one built on International Seaways’ assumptions and one built on Euronav’s model with different facts and assumptions. Mr Kirk carried out the proposed calculation comparisons. The calculations on Euronav’s model resulted in a value of US$296m in the event that the charter for both FSO units were extended, and US$252m if only one was extended. The average resulted in US$274.1m. Mr de Stoop was happy with the calculations and drafted an email for Mr Kirk to send to UBS explaining the calculations and International Seaways’ US$250m valuation in the debt raise. However, instead of taking the average of US$274.1m and thereby accounting for the possibility that only one of the units would be extended, Mr de Stoop relied on the US$296m figure assuming that both units would be extended. He explained to Mr Kirk that he did not want to accept “the possibility of only vessel being extended. Leave that to them to come back with if they so wish”. Mr Kirk sent the email to UBS in substantially the same terms as drafted by Mr de Stoop.

On 19 September 2017, Mr Smith contacted Mr de Stoop informing him that the UBS model produced US$245m but “I am convinced that if you change the opex and a couple of other key assumptions I can get my head around the $277mm in RMKs last analysis. For the sake of moving this forward would you guys be willing to move on to Clarksons if we just agree to put a pin in FSO at $277m?” The same day, Mr de Stoop confirmed to Mr Kirk that he had sent an email to Steve Smith accepting a valuation of US$277m for the FSO business: “In the end, I sent an email to Steve about the FSOs…here is his reply with which we will agree…I will need to let him know that we agree so don't speak to UBS before receiving our green light please”.

Looking back on the FSO valuation issue, Mr de Stoop said in his witness statement:-

“Higher valuation on Euronav’s FSO assets (US$32 million). This is calculated the same way as I described in paragraph 39.5 above [relating to charter-adjusted vessel values]. However, Euronav carried out an initial calculation which we could use as a “prediction”. Therefore, RMK took the charter information (charterparty, current rate, remaining period and market rate etc) and placed it in a spreadsheet which set out the predicted charter value. RMK therefore did help us run this analysis, but this was an element of the model. In comparison, I had to explain to Steve Smith (Gener8) why the FSO assets were so valuable to the clients of Euronav, that they would extend the contract with minimal discount. This is because those FSO were tailor-made for this particular oilfield and finding a replacement would have been extremely difficult. In the end we got Steve Smith to agree to Euronav’s overall increase in value. RMK did not take this information and negotiate the figures with Gener8 on our behalf.”

In his oral evidence, in substance he maintained that the negotiation was primarily driven by him, with Mr Kirk providing support rather than advice, and that his own conversations with Mr Smith of Gener8 were key to the outcome. I found his evidence on this matter plausible and consistent with the documents, and I accept it. Although, as the above summary shows, there were discussions between RMK and UBS about the FSO JV value, they took place in close liaison with and under the direction of Euronav, and in the end the crucial discussions took place between Euronav and Gener8 direct.

On 9 October 2017, Mr Rodgers sent Mr Kirk a draft exclusivity agreement (whereby Euronav and Gener8 agreed to continue to discuss the transaction on an exclusive basis until closing) and term sheet from Seward & Kissel. Ms Goris sent drafts containing inter alia Mr Kirk’s comments thereon to Seward & Kissel on 11 October 2017. On 12 October 2017, Mr Kirk provided further comments on a new iteration of the exclusivity agreement he had received that day. Mr Goris relayed those and other comments to Seward & Kissel on 18 October 2017.

On 6 and 9 October 2017, Euronav (Mr Rodgers and Mr de Stoop) and Steve Smith, and their respective advisors, held further discussions with a view to resolving all outstanding matters in respect of the NAV calculations. In the evening of 6 October 2017, UBS sent RMK its NAV summary. Mr Kirk emailed Mr de Stoop stating, “The UBS numbers are consistent with mine”, with one exception, concerning Euronav’s long-term relationship value, which Mr Kirk and Mr de Stoop discussed. On the morning of 9 October Mr de Stoop updated Mr Rodgers saying:-

“As you may have seen over the weekend, the difference in NAV (ratio) comes to exactly the same result as the LT value relationship. Ratio becomes 0.725!

I feel that the best way to get to that ratio is to send Steve a message ahead of our call making three following strong arguments (that I list below in a proposed draft email) so that right when we jump on the call he will have to come with three justifications (defensive) rather than just pretending he spoke to a few funds who are making his life difficult...”

and setting out a proposed message to Gener8 about the remaining point of difference.

Mr de Stoop told Mr Rodgers the same day that he had instructed Mr Kirk to send a new spreadsheet to UBS for mutual agreement. Mr Kirk ran a final adjustment past Mr de Stoop in relation to restricted stock units or RSUs, which they discussed on 10 October 2017. This led to an email from Mr Kirk to UBS attaching an updated NAV summary reflecting the fact that RSUs and performance stock units (PSUs) would likely be settled in cash, resulting in a ratio of 0.7272, which Mr Kirk asked UBS to confirm.

UBS reverted on 11 October 2017 stating “we don’t believe modelling [RSUs] as cashed out is the right treatment” and suggested its reinstatement, which resulted in an increase to the exchange ratio of 0.0002x. Mr Kirk forwarded UBS’s position to Mr Rodgers and Mr de Stoop, commenting, “Since the PSU's have to be settled in cash, I suggest we go back to them with that change (and let them count the RSU's as they are). This makes the ratio 0.72728x. Are you good with this?”. RMK emailed UBS later that evening maintaining that RSUs and PSUs should be deducted from the cash balance. UBS continued to take issue with this, but after Mr Kirk provided further justification and said Euronav was insistent on the point, UBS agreed to disagree and to “take the deduct in cash” and later confirmed that “Excluding the impact on RSU treatment, 0.7272x is fine”. Mr Kirk reported this outcome back to Euronav, and likewise confirmed to UBS that the deal ratio was confirmed, with each Gener8 share receiving 0.7272 Euronav shares. The deal ratio had now been agreed: the ratio implicit in the NAVs was that the Gener8 shareholders would receive 0.7272 Euronav shares for each of their Gener8 shares in the post-merger entity.

From Euronav’s perspective, the ratio was NAV accretive deal because of the additional value that it was able to obtain in the NAV calculations by reference to the value that was assigned to FSOs, Euronav’s long-term charter relationships, and its French Flag Business Unit.

Following agreement of the deal ratio, during the remainder of October 2017 the parties’ respective teams sought to agree:-

On 17 October 2017 RMK provided an updated model to Euronav following a request from Mr de Stoop on 15 October in connection with some board papers.

The Exclusivity Agreement was signed by Euronav on 2 November 2017.

On 3 November 2017, Mr Kirk emailed Euronav raising action points from a call with UBS, including on due diligence and the drafting of the sale purchase agreement, after which he had a call with Mr de Stoop, as reflected in an email from Mr de Stoop. On 17 November 2017, ahead of an “SPA Strategy” call with Euronav and SewKis, Mr Verbeeck asked RMK to consider any other agenda points required for that meeting and asked Mr Kirk to “hold the pen on the agenda”. There is no indication, however, that RMK had any substantive input in the question of the proposed contents of the SPA.

In the meantime, Euronav had begun to consider in earnest how it would allocate its resources in respect of the proposed transaction through to completion. On 27 October 2017, Stamatis Bourboulis, a General Manager at Euronav sent a message to Mr de Stoop, Mr Rodgers, and Euronav’s General Counsel, Mr Verbeeck, setting out the allocation of Euronav personnel in respect of (a) due diligence, (b) project management from the signing of a sale and purchase agreement to closing, and (c) integration of the two companies. It is evident from this document that Euronav envisaged deploying significant manpower on the due diligence exercise.

The due diligence exercise commenced in early November 2017 and took up the remainder of November 2017 and December 2017, until the Agreement and Plan of Merger was eventually signed on 20 December 2017 and announced on 21 December 2017. On 2 November 2017, UBS asked RMK for Euronav’s Diligence Request List. Mr de Stoop informed Mr Kirk on 3 November 2017 that Euronav and their US lawyers, Seward and Kissel, had already done some due diligence work and would revert the following week. Data rooms for Euronav’s and Gener8’s due diligence requests, which were the gathering places for documents collected and required to execute the deal, were made accessible to 58 people on Gener8’s side and 38 people on Euronav’s.

Euronav personnel and SewKis prepared the due diligence lists, set up the virtual data room, considered the documents that Euronav needed to include in response to Gener8’s due diligence list, and reviewed the documents provided by Gener8. RMK was also involved in the exercise. It liaised between the Euronav side and UBS in organising the due diligence exercise, provided its assistance to Euronav in respect of documents that it had already provided to UBS during the NAV discussions, ensured that the material included in Euronav’s virtual data room was compatible with the information that had been relied on vis-à-vis UBS in the NAV discussions, and, through Ms Motyka of RMK, monitored the data room tracker for both sides. RMK made sure that the data room trackers were updated to keep pace with Euronav’s due diligence queries, and that UBS’s queries were being resolved (e.g. by document uploads). The trackers were sent twice weekly to Euronav and the UBS team (UBS being responsible for Gener8’s data room tracker). The final versions of the trackers were substantial: the tracker for Gener8’s requests contained c.180 items, and that for Euronav’s requests contained c. 150 items. Ms Motyka also managed the uploading of documents into data rooms. Ms Motyka estimated having spent about 230 hours on due diligence, particularly from 27 November 2017 to 19 December 2017.

In parallel, Mr de Stoop emailed RMK on 3 November 2017 saying: “Finally, we need to work on a model and a pro forma financials of the combined group to present to banks but also the market in general. RMK proposed and agreed to change their model from proportionate to Equity method to be aligned with the way we present our numbers”. This work (described by Mr Kirk in cross-examination as a “pretty large undertaking”) was intended to enable the transaction to be understood by lenders and Euronav’s auditors KPMG, who were to provide a fairness assessment. Mr Keros, a junior colleague of Mr Kirk’s at RMK, provided this model on 16 November 2017, and an updated model on 21 November 2017.

On 21 November 2017, there was a call between Euronav, its lawyers and RMK during which the share purchase agreement was discussed, though the agenda indicates that the aspect for discussion was merely “first delivery by buyer”.

In emails of 28 November 2017, Mr de Stoop asked Mr Kirk to provide an overview of pool fees for vessels participating in the VL8 pool if they remained up to closing (expected 30 June 2018), which “is a critical item for us before signing the SPA” because the idea was to transfer the ships to Euronav’s own pool as soon as possible after signing the SPA. Mr de Stoop also requested information about the notice period for exiting the VL8 pool, the number of vessels with remaining tenures of less than 1 year/9 months, and the money the VL8 pool would lose in the event of early termination. RMK reverted to Mr de Stoop the same day. Separately, Ms Motyka on 28 November provided some information about the employment of Gener8 personnel. This followed Euronav having asked RMK to look into employment contracts and consultancy agreements to see how best they could be terminated in order to reduce costs. Also the same day, Mr de Stoop asked Mr Kirk to send the breakdown of outstanding shares in Gener8, per Mr Kirk’s discussion with UBS, including options and RSUs. Mr Kirk responded later that day setting out “how we calculated the number of GNRT shares for the ratio”.

On 10-11 December 2017, Mr de Stoop asked for and Mr Kirk provided his views on options and RSU for the purposes developing the Sale Purchase Agreement, the focus being whether it would be better to settle them in cash at closing or including their value in the contribution in kind process i.e. the share for share exchange (which might make the process more complicated).

Also in November 2017, Mr Kirk considered the potential impact of Gener8’s VLCCs leaving the VL8 Pool and being moved to the Tankers International Pool. This required additional work on the acquisition model plus additional review and analysis of Gener8’s own model.

Mr Kirk stated that he raised the issue of fees again with Mr de Stoop on 1 December 2017. Mr Kirk’s evidence was that Mr de Stoop responded: “Let’s see if the deal ever happens”, which RMK says it interpreted as Mr de Stoop acknowledging its entitlement to remuneration but expressing its desire to wait until the Gener8 VLCCs had left the VL8 Pool and been moved to the Tankers International Pool.

In his oral evidence, Mr Kirk said his recollection was that Mr de Stoop’s comments related to the Pools, and that he said “Well, I don’t even know if they’re going [to] agree to the pools, in which case this deal might not happen, so let’s just see if the deal happens”, or something to that effect. He accepted that this exchange did not take matters further. RMK nonetheless relies on it as evidence that the question of fees remained open and that Euronav had not closed the door on additional remuneration. Even on that basis, however, the exchange was consistent with Euronav’s position that, whilst RMK was not entitled to further remuneration, Euronav was intending to pay some form of discretionary bonus after the transaction closed.

RMK obtained Gener8’s internal model on 1 December 2017. RMK compared this with the model it had created to determine whether the inputs in each resulted in the same output, in parallel with UBS carrying out the same analysis. Mr Keros provided Mr Kirk with updated models on 7 December 2017 and 18 December 2017.

On 5 December 2017, Mr de Stoop asked Mr Kirk to send him the list of ships on which some of Gener8’s borrowing, from Blue Mountain, was secured (i.e. that the note needs to be repaid in case 2”), and whether the note contained a change of control clause. Mr Kirk responded the following day, including attempting to answer some follow-up questions.

Due diligence continued into December and was completed on 20 December 2017. Further work was done on Gener8 vessel lists, values and charter values. RMK continued to attend joint meetings with Euronav and UBS. During the due diligence phase RMK also provided input on the draft Sale Purchase Agreement.

On or around 20 December 2017, Mr de Stoop asked Mr Kirk to assist with a press release announcing the merger between Euronav and Gener8. On 21 December 2017 the RMK and Euronav finalised the press release and, on the same day, the Boards of Euronav and Gener8 agreed a stock-for-stock merger of the entire share capital of Gener8. The press release contained the following wording:

“RMK Maritime is serving as financial advisor to Euronav’s Board of directors.”

Euronav thereafter requested RMK to refine the Acquisition Model and assist with debt rollover discussions.

On 28 December 2017, RMK invoiced Euronav and was paid US$1 million.

On 18 January 2018, Mr Kirk sent a detailed email to Mr Rodgers and Mr de Stoop on the subject of fees. In order to provide the complete picture, I set it out in full below:-

“As suggested by Hugo in New York last week, I am putting my thoughts in writing with regards to the RMK M&A fee assuming the Transaction closes.

We obviously discussed a figure in the Euronav conference room in London in August, which per your request I won't repeat. I do want to supply some supporting material though, for what we believe to be an appropriate market fee by Euronav standards.

1.

As you know, we have been working on this Transaction since at least January 2016 (the first EURN/GNRT model we built) and we have been under mandate since July 2016. The Transaction is expected to close in Apr/May 2018, so we are looking at just over or just under 2 years of work — whether we use the January 2016 or July 2016 date.

More importantly, when we signed the original agreement in July 2016, we expected

• to be proceeding with a bid in the fall of 2016

• that EURN would need to hire another investment bank or banks — per your messaging to us

As we know the Transaction took another year + and RMK provided the sole buy-side investment banking services.

2.

Due to this substantial increase in the time/scope of work, RMK applied significant resources from eight RMK employees over this 2+ year period to advise EURN on this Transaction. As this was a "buy side" advisory mandate, it carries a lot of risk that a transaction may not be completed and thus the likelihood is high that the work will be done in vain. Unlike lawyers and consultants who are paid regardless of the outcome, we absorb this significant risk. As long as the fee represents multiples of non-risk expense, then it can be a reasonable business to undertake in. If not, it is bad business as we make the same wages as lawyers/consultants who do not take on those risks. Clearly, RMK thought that Euronav was the best bidder from the beginning, but in light of Frontline, Quantum Pacific, INSW, Peter G, Navig8, other recalcitrant board members and finally (and maybe still) COSCO, the Transaction success potential (at engagement) represented a chance of less than 25% (which is still very high for buy-side standards). We could compare this to UBS, who knew that their likelihood of a sale (which had been decided by the GNRT Board) to someone was HIGHLY likely (say 85%).

3.

It goes without saying we hope you believe we did a good job. In acting as the sole advisor to EURN, we provided the financial modeling and analysis, presentation work, data room coordination, diligence, etc. However, your choice to use RMK as opposed to a bulge bracket is in part because we provide a differentiated service which carries value. I would like to flag a few key areas where I think that RMK proved this value throughout the process:

• Confidentiality — despite a 2 year process, nothing was leaked

• Negotiation of value — to be clear, EURN deserves the majority of the credit for this, but I do believe that RMK's analysis behind some of the 'soft' value aspects of the EURN NAV were instrumental in achieving their acceptance

• Liaising with investors — having a pulse on what certain investors were thinking, primarily BM and BlackRock

• Intelligence gathering — RMK was able to glean key information about certain other bidders and shared the names/information with Euronav, which helped EURN to 'play its cards' from a position of knowledge

4.

You could hold us to the contract signed back in 2016 and thus minimize the fee paid and if this were a one-time game that (despite inherent unfairness in our view) could be the smart business decision. However, this is not a one-time game, which is evidenced by the fact that we completed deals for Euronav in late 2013 and early 2014. RMK felt fairly compensated in those Transactions and as a consequence continued to work hard for Euronav by bringing well-developed ideas (even the ones you didn't like) and opportunities, including this Transaction. We certainly feel this is multi-stage relationship where RMK continues to provide ideas and opportunities (i.e. shareholder value) to Euronav on an ongoing basis. In light of the above, by achieving a fair fee on this Transaction, we can feel confident that going forward if we provide genuine value we will be fairly compensated and thus highly motivated to continue to bring value to Euronav and its shareholders.

We would be more than happy to discuss any or all of the above in more detail and look forward to your feedback.”

Asked about this message in cross-examination, Mr Kirk said:-

“I think it's important to just mention that, you know, when this email is sent, we were -- you know, we wanted -- the deal had just been announced, so we're in the most positive situation possible. We have a great relationship with these guys, everything's fantastic. We're getting calls of congratulations, they're getting calls of congratulations. This is a great deal, everyone's very happy. And so I'm not, you know, sending an email with any view towards litigation here. I'm explaining to them, "Hey, we did a lot of work beyond the contract; in fact we were the sole side M&A advisor. Here is some of the work we did that was beyond the contract". And then -- you know I wish I hadn't said that, but what I -- I don't mean that they could legally do it; I just mean they could do it, which they ultimately did, and that's why we're here today.” (Day 2/109-110)

No doubt there were good reasons for Mr Kirk to express himself diplomatically, as he did in this email. Nonetheless, the statement in the final section to the effect that Euronav would be strictly entitled to pay RMK no more than the fees set out in the Advisory Agreement is difficult to square with any joint understanding that RMK had been doing extra-contractual work for which it would be entitled to payment. It is also notable that Mr Kirk in this email noted that Euronav deserved the majority of the credit for the successful NAV negotiations, somewhat in contrast with RMK’s claim in the present proceedings to have procured, largely by its own efforts, a favourable deal ratio for Euronav.

Mr Kirk re-sent the email in April 2018, when it remained Mr Kirk’s view that, as he put it in cross-examination, “we should be getting an 8-figure fee”.

In January 2018, after the signing of the Agreement and Plan of Merger, the focus turned to closing the deal, which included Euronav seeking the rollover to itself of (a) a facility that Gener8 had with KEXIM/KSure for the purpose of financing Gener8’s modern Korean-built vessels, and (b) a facility that Gener8 had with CEXIM. The rollover of Gener8’s loans to the merged entity was a significant commercial issue for Euronav, without which Euronav would have had to raise new debt. Mr de Stoop had on 26 October 2017 asked Mr Kirk to provide a list of banks participating in the KEXIM/KSure facility, to produce an amortization schedule starting in the 4^th quarter of 2017, and to check whether there was an early repayment penalty. Mr Kirk reverted that day, indicating among other things that the lenders included Citibank and Nordea.

The KEXIM/KSure facility had several tranches – (a) a tranche provided by commercial banks, (b) a tranche provided by commercial banks but guaranteed by KEXIM, (c) a tranche funded entirely by KEXIM, and (d) a tranche provided by commercial banks but underwritten by KSure. The facility was entered into by Gener8 with Citibank and Nordea as agents. Euronav eventually agreed the rollover of the KEXIM facility on 28 March 2018.

The CEXIM/Sinosure facility was entered into with Citibank, CEXIM, and the Bank of China, partly for the purpose of refinancing the building of 6 Chinese-built vessels that Euronav had negotiated to sell to International Seaways as part of the merger transaction. The sale of those vessels was negotiated directly between Euronav and International Seaways, to close at the same time as the merger, and took the form of a Stock Purchase Agreement dated 18 April 2018. Accordingly, International Seaways, who would take the benefit of the CEXIM facility, deal direct with CEXIM/Sinosure about this facility.

Euronav’s case was that it was advised in respect of the rollover of the KEXIM/KSure facility by Citi and Nordea, although at various points it sought RMK’s assistance in providing financial information concerning the merger and the combined post-merger entity which was required for the rollover discussions. RMK at trial challenged that case, on the basis that as agent banks under the facility, Citi and Nordea could not also have been advising Euronav. The facility documentation and regulatory filings made clear that they were the lending banks’ facility agents, and Euronav did not pay or make provision for any fees to Citi or Nordea. Conversely, the Press release of 21 December 2017 announcing the merger, and the US regulatory filings, referred to RMK (and no-one else) as Euronav’s financial adviser.

Whether Citi or Nordea advised Euronav, strictly speaking, is debatable, though as Euronav points out, clause 30.20(c) of the Facility Agreement specifically permitted the Facility Agent to provide advice or other services to the Borrower. Mr de Stoop in oral evidence that:-

“Every single transaction that I’ve done in my career required an agent and the agent was always an advisers, in terms of structuring, in terms of appetite of banks in the market; certainly when it’s a syndicate i.e. a large group of banks you cannot know, on your own, who is active in the market, who has appetite for what size of deals, where they are in their current loan book. Et cetera, et cetera. So it’s two different roles but they are not in conflict with one another. If they are running into conflict then they declare it and we deal with it appropriately.” (Day 5/92)

Mr de Stoop added that Citi’s advisory role was the only reason why they received a higher fee as agent than Nordea did.

The correspondence shows that Citi liaised closely with Euronav about the details of the transaction in order to facilitate the proposed rollover. At the same time, Euronav on numerous occasions during the rollover discussions sought financial information relating to the merger from RMK, which it provided, largely related to the model.

Thus on 19 January 2018, Mr de Stoop wrote to RMK requesting a presentation to illustrate how the merged entity would look, to present to the commercial banks and to KEXIM/K-Sure. Mr de Stoop asked RMK to put together “ a few slides using the material that you have”, and suggested what information they should contain. Mr Keros of RMK provided a first draft the following day. Mr de Stoop on 22 January 2018 requested the latest ratio calculations, for Euronav’s auditors, KPMG, which RMK provided the same day. (This may relate not to the rollover discussions but to KPMG’s anticipated role in providing a fairness assessment.) RMK sent the latest version of the model to Euronav on 30 January 2018 at the request of Mr Melis of Euronav.

On 1 February 2018, Mr de Stoop requested answers from RMK to three specific questions raised by KEXIM regarding merger expenses, the Gener8 discount to NAV, and break-even rates for vessels. On 2 February 2018, Mr Keros provided a corrected version of the presentation. Mr de Stoop asked RMK to re-run the model “for the years 2019-2020 us in street consensus”, as Nordea and CITI felt the projections should be more conservative, which Mr Keros provided the next day.

On 8 February 2018, RMK provided four transaction scenarios requested by Mr de Stoop. On the same day, Mr de Stoop forwarded some questions from KEXIM, noting that “we have had too many errors or misunderstandings with the material provided to the banks in general” and proposing a call to make sure everybody was working with the same assumptions “which will need to be listed and made very clear for every iteration of the model we produce”. Various queries from KEXIM regarding the merger were addressed on 8 and 13 February 2018.

On 14 February 2018, Mr de Stoop asked RMK to develop a standalone model that “KEXIM would be able to use and play with but something that would not trigger more questions than answers” and “a 5-year cash flow sensitivity model similar to the one attached to this email with the following scenarios [4 scenarios identified below]”. This followed a complaint from KEXIM that they needed adjustable raw data for their own use, leading Mr de Stoop to comment to RMK on 13 February that “we are far from being out of the woods … I wonder at this point if we shouldn’t give them the model …”. RMK now says this shows that Euronav was “out of its depth” and relied on RMK for getting it “out of the woods”. In my view, the correspondence merely shows that, unsurprisingly, the lending banks needed the data in the model, and preferred also to have the ability to manipulate it themselves, in order to assess the implications of the proposed rollover.

Mr Keros provided a “draft KEXIM model” “which includes cash flow output and breakeven” (information not in the model) on 16 February 2018, and an updated version on 18 February 2018. This was largely an additional tab containing a simplified version of the existing model, with the addition of a cashflow tab and setting out alternative charter rate scenarios (assumptions) in the ‘Spot Rates’ tab. Mr Kirk said in his oral evidence that it took Mr Keros two long days to produce, and I see no reason to doubt that. Mr de Stoop sent the simplified model to KEXIM on the same day. On 19 February 2018, Mr de Stoop wrote to RMK saying, “As anticipated [KEXIM] want a full analysis (P&L and BS) on their lousy scenario in addition to the model. Could you run this scenario for me so that we can provide it to them.” Mr Keros provided this the same day. Mr de Stoop asked for the model output applying a further scenario on 22 February 2018, which Mr Keros provided that day.

RMK was asked by Mr de Stoop to address further information requests and queries from KEXIM on 5, 6 and 9 March 2018, each of which RMK did on the same day. RMK dealt with further queries on 16 March 2018.

During the same period (January to March 2018), it was necessary in view of the merger for Euronav to prepare for filing a Form F4, a registration statement used to register securities in connection with inter alia business combinations, with the US Securities and Exchange Commission. The form was completed with contributions from several different parties including, Euronav, SewKis, and Euronav’s Belgian counsel, Argo. RMK was also involved in some aspects. In December 2017/January 2018 SewKis asked the Euronav, RMK and Argo teams to review a working draft of the form, including the section on the “background of the merger” (which RMK reviewed). On 8 January 2018, pursuant to Euronav’s request, RMK provided Euronav with an overview of Gener8’s restricted stock units and stock options. RMK was asked to review the “background of the merger” section of the draft F-4 to ensure it accorded with RMK’s record of events from Euronav’s perspective, and to input certain financial information where required. On 12 February 2018, at the request of Mr Melis of Euronav, RMK reviewed the input into the F-4 Registration Statement provided by Gener8. RMK on 14 March 2018 reviewed a draft response to the SEC in relation to information required for the filing, and on 20 March liaised with UBS to establish the source of NAV analysis in the F-4 filing and regarding the potential disclosure of Euronav’s valuation breakdown. On 22 March 2018, RMK calculated the average age of the combined fleet on 28 March 2018, and provided draft comments for the F-4 Form on 16 April 2018. The “Background of the Merger” section of the Form F-4 as filed referred to RMK’s role, having been appointed as Euronav’s independent financial adviser “because of RMK’s qualifications, reputation and experience in the valuation of businesses in connection with mergers and acquisitions generally and in the shipping sector specifically”. The same account of the background to the merger appeared in Gener8’s Schedule 14A information, a statement required to be filed by a publicly listed acquired company, and which was signed by Mr Rodgers and Mr de Stoop among others.

Mr Kirk gave evidence in his witness statement and in cross-examination that, in a telephone conversation on or around 1 February 2018, he raised the issue of fees with Mr Rodgers and Mr de Stoop again. Mr Kirk says that he was advised that he should wait until the rollover of the KEXIM and Sinosure debts was completed, as no deal was going to be signed until that had been dealt with. Mr Kirk had a recollection of Mr de Stoop saying words to the effect of: “don’t worry, we’ll take care of you when it comes to fees.”  He felt it acceptable to take Euronav at their word, given that on the Maersk Tankers deal they had paid a fee commensurate with the work done.

Mr Moore similarly recalled Mr Rodgers saying, in February or March 2018, something along the lines of “do not worry, we will look after you”, and remembered sending a text message to Mr Kirk a very short time afterwards to let him know. In cross-examination Mr Moore said:-

“A. I can absolutely say he did say that to me. And I would think a conversation like this, which is so important, regarding fees, I will remember very -- very clearly. I cannot speak for Mr Rodgers. He is the CEO of Euronav, he would have been looking at this transaction, so maybe it was less meaningful to him. But for ourselves as a company, and with the fees in the business that we do, I very clearly remember it.”  (Day 3/136)

This alleged conversation was not specifically put to Mr Rodgers or Mr de Stoop, though, as summarised earlier, the general point was put to them that they gave assurances to the effect that RMK would be taken care of or looked after. It seems to me very plausible that a similar assurance was given at this stage of the process. However, for the reasons I give earlier, it would not advance matters. Indeed, if the subject of fees was raised yet again in February 2018, that might tend to undermine the suggestion that there was a longstanding joint understanding of the kind RMK alleges. In any event, a further assurance to the effect that RMK would be looked after or taken care of was consistent with an intention to pay a discretionary bonus, by reason of the contractual work having been done well and/or having taken more time and effort that was originally expected. It did not evidence or create a joint understanding that RMK was working outside the scope of the Advisory Agreement or that it would be entitled to further payment.

On 12 March 2018, Mr de Stoop sent an email to Mr Rodgers about deal fees saying:-

“Please find my input.

FYI on the banker's fee we had printed 10m for nego purpose knowing that we were only at 2.25 with RMK. I believe we will end up giving them double that but this is still to be discussed of course. I have nevertheless taken this assumption for the spreadsheet.

Egied should be able to give us an accurate picture on the legal costs from both sides.

In the meantime for our side (Euronav bank/legal/Audit) I have taken the following:

2.25

additional to 2.25 for RMK

2.5

total Sewkis?

1 total Argo [Euronav’s Belgian lawyers]

500k for KPMG

So still well below the 10m” 

The references to US$ 2.25 million in relation to RMK were incorrect, as Mr de Stoop and Mr Rodgers agreed, as the total fees payable under the Advisory Agreement were US$ 2 million rather than US$ 2.25 million.

RMK submits that this message shows that Euronav realised that RMK had done substantial work outside the Advisory Agreement and that Euronav was obliged to pay an additional fee. I disagree. This communication too is consistent with Euronav’s intention to pay a discretionary bonus, in an amount yet to be discussed.

It was suggested to Mr de Stoop in cross-examination that the message showed that he would not have regarded US$ 4.5 million as an over-payment to RMK. Mr de Stoop responded that, by suggesting to Mr Rodgers that Euronav would end up paying RMK double the contractual amount, he was trying to provoke Mr Rodgers. Mr de Stoop said he felt that Mr Rodgers had overpaid RMK on previous transactions, and that the message he was seeking to convey was “knowing you, you will agree to that”; Mr de Stoop said that, when Mr Rodger reacted by telephoning Mr de Stoop, he asked why Mr de Stoop had made that comment, to which Mr de Stoop replied “that’s exactly what happened last time around”. None of that was set out in Mr de Stoop’s witness statements, and it is possible that it involved a degree of reconstruction (albeit there is no other particular reason to think that it did). However, it was not directly suggested to Mr de Stoop that this message showed that Euronav regarded RMK as entitled to such a payment, and he made clear that that was not his view. In response to the suggestion that this was an example of the constant reassurances Euronav gave RMK, Mr de Stoop said this:-

“A. I don't believe that for a second. I think that [Mr Kirk is] a very, very clever person. He can read a contract and he was perfectly seeing that the contract was from the start to the end, the contract is crystal clear about that. He could have not stopped working. It has nothing to do with his belief. He didn't even bring that possibility once.

Q. Again, he had no need to raise it as a possibility in circumstances where he was receiving constant reassurance from Euronav that you would look after him and that you would recognise his endeavour. That's the true position, isn't it?

A. No, it's not -- it's certainly not my position. I don't that it's Paddy's position. The fact that he was reassured is entirely down to him. And the only thing that we can say is that we are generous people, we have always paid bonuses when we thought that the job had been done in an excellent way, which continues to be the case. We are very, very happy with what RMK did for us in this transaction. And that what -- that was within the boundaries of the contract and when we are happy we were in tradition of paying bonus.” (Day 6/23-24)

On 28 March 2018, Mr de Stoop informed Mr Kirk that KPMG needed to perform a limited audit on the fair value assessment of the deal and “therefore need to understand how we came to the ratio”. Mr de Stoop needed an Excel file with the ratio calculation and the basis for each line, which RMK provided on the same day. RMK continued to liaise with Euronav about this, including on 21 April 2018 when Mr Kirk reverted on missing items which KPMG had queried. Mr Kirk’s email of 21 April said that, after reviewing the queries, “it seems that all of this is pretty straightforward with a couple of queries”.

On 24 April 2018, Mr Kirk followed up on one of the queries he had raised. On 25 April 2018, Mr de Stoop replied indicating that “the idea is to re-do the exercise completely (except for TC portfolio adjustment, FSO valuation and FF)”, so that Mr Kirk needed to update the balance sheet elements (including working capital, cash and debt), the value of the vessels (as to which Mr de Stoop attached Clarksons’ and Braemar’s valuations) and also to take the vessel sales that had been sold into account. The updates were provided on 8-9 May 2018.

The due diligence process continued, with RMK liaising with UBS on this on 10 April 2018.

On 13 June 2018 the merger between Euronav and Gener8 was concluded and publicly announced by a Press release, following approval by the shareholders of Gener8, following a Special Meeting of its Shareholders on 11 June 2018.

The same day, Mr Kirk and Mr Moore exchanged WhatsApp messages. Mr Moore wrote:

“I think we should be asking for $10m. That’s a 35% discount to market (let’s call it the Euronav discount), but fair and reasonable.”

Mr Kirk replied: “Agreed. That’s the right number.” 

RMK submits that this exchange reflected its continued belief that a market-based fee was appropriate and that Euronav had not rejected this. That may be so, but the messages do not evidence any joint understanding with Euronav, and are not inconsistent with Euronav’s position that any additional payment would be discretionary.

At a Marine Money Conference in New York on or about 18 June 2018, Mr Kirk moderated a panel featuring Mr Rodgers. During the presentation, a slide was shown indicating that Euronav’s deal fees were $3 million, compared to Gener8’s $18 million. Mr Kirk and Mr Moore say they were alarmed by this, interpreting it as a public repudiation of RMK’s entitlement to what they regarded as a market-based fee. This event was followed by the email and text exchange referred to in §§ 110-111 above.

The following evening, 19 June 2018, Mr de Stoop sent an email to Mr Kirk on which RMK relied in its written closing. Mr de Stoop said Euronav and RMK were far apart, and that he had spoken to some contacts in the industry about M&A fees, leading him to conclude that UBS’s fee “cannot be taken as a reference whatsoever”. He continued:-

“Craig Fuehrer told me that he (DB) would do it for $5m but when he quoted that included a fairness opinion. That was some months ago and he doesn’t know what we are paying RMK. I don’t need to tell you that DB is a lender, has an analyst covering the stock and has demonstrated that they can be very helpful (reason why we chose them as lead le` in our IPO). If DB is there at $5m and you said that you would agree RMK (like Pareto) works at a discount (40% in our conversation yesterday) to the big banks (because you are not a lender, you don’t have an analyst, you cannot be the agent, you cannot produce a US GAAP /IFRS model for our European prospectus,…) then I believe there is a chance we can meet each other on the fee side. We agreed a contract and we are happy to think about an additional DISCRETIONARY bonus on top of that. That is where we are coming from and in our cross referencing fees we have come up with data points which ratify our view further …not weaken it.

The contract reads as follows:

…

So all the work that you have done is well within the scope of the contract We have enjoyed working together on three different successful deals and look forward to again in the future but if this is not settled amicably and quickly that is in doubt. Mike, we have been very happy with the service you have provided but your obsession with the UBS fee is distorting your view on what is fair…. You are putting us in a very awkward position because your expectation are so far away from the real world that there is no incentive for EURONAV to move from the contract as whatever we were thinking of adding to the contractual fee will still be too far away from a satisfactory position for you. If you break the relationship because of your unreasonable position, I don’t think we should pay for the divorce. Last but not least, the presentation will be changed before it goes on the website and as you know it was not available on paper…so I don’t believe any damage has been done – let’s not discuss “respect” in that context…this is insulting… ”

RMK submits that Mr de Stoop was, in this email, tacitly accepting that RMK had performed “the M&A buyside advisory role”. Mr de Stoop was not taken to this document, so did not have an opportunity to comment on it. However, what does emerge clearly from it is that Mr de Stoop considered the services RMK had provided (a) to be less extensive than various putative comparators and (b) to be within the scope of the Advisory Agreement. Mr Kirk’s reply included this:-

“We are not whining about this after the fact. I tried to have this conversation with you 5 or 6 times since I first brought the subject of the fee not being sufficient in February 2017. In retrospect, I have should have nailed down a number with you before moving forward. However, each Ime I was reassured by you as was Richard by Paddy on separate occasions. I didn’t think we were being naïve, because RMK was paid fairly (albeit with a Euronav discount) on the Maersk transaction. The GNRT deal is larger in ships and total value was much more complex and it took genuinely 50x as long, so I assumed that was the minimum fee we could be looking at.”

Again, this exchange provides no support for their having been any joint understanding during the transaction that RMK was doing working beyond the scope of the Advisory Agreement for which it would be entitled to additional payment.

The next day, 20 June 2018, there was an internal exchange of emails between Mr Rodgers and Mr de Stoop which RMK quotes in its written closing. Mr Rodgers wrote:-

“'Irreconcilable' is a strange word for a broker to use.

Our original deal was not on a success fee was it?

If not then that is a huge difference.

They have no legal position as we negotiated the agreement.

They are asking for an ex gratia payment.

Richard, broker that he is, was trying to state that he had assurance from me that we would pay up. He did not.

I personally think a payment of 1musd as a bonus is fair and significant. It is tiring but keep up the good work.”

to which Mr de Stoop replied:-

“Noted on the word irreconcilable CD

No it was not a % but every stage payment (we already paid $1m) was linked to a successful step.

Mike was saying that we deliberately pushed the discussion to after the deal in order to pay less.

It is sad to see that their feet is no longer touching the ground !

He sent a text to say that we should speak in a couple of hours. Let's see but in any event that will be the last discussion on the topic.”

RMK notes that this email chain is the only one in Euronav’s disclosure bearing the banner “This message has been archived”, and suggested to Mr de Stoop that it had been specifically preserved to record the ‘line’ that he and Mr Rodgers were going to take, namely that any payment would be ex gratia or discretionary. Mr de Stoop did not accept that, noting that there was an automatic system for archiving after three years (and he would be surprised if there were not more messages with this banner). I see no basis for RMK’s suggestion, not least in circumstances where Mr de Stoop’s email of 19 June 2018 quoted above itself included the statement, overtly to RMK, that any additional payment would be discretionary bonus. The suggestion is an attempt to create bricks without straw.

RMK also, in its written closing invited the inference that Euronav’s disclosure was defective, there being messages that had not been disclosed because they did not support Euronav’s case. RMK noted that Euronav’s solicitors on 13 November 2024 stated that its witnesses no longer recalled and/or no longer held copies of messages some exchanged eight years previously, and no longer held positions at Euronav; and that Euronav had no further messages to disclose. In his second witness statement, in December 2024, Mr Rodgers said he no longer had access to texts sent around the time of June 2018. In April 2025, Euronav’s solicitors said they were informed that:-

“Mr Paddy Rodgers was not inclined to use instant messages (such as WhatsApp/SMS messages) to discuss business matters such as the Transaction and it is of this reason no WhatsApp/SMS messages are available to be disclosed.

Nevertheless, and despite the number of years that have passed since the Transaction, Mr de Stoop was able to retrieve the WhatsApp exchanges with Mr Rodgers of which there are very little. We have reviewed these and can confirm that none of them are relevant to the Transaction and/or this litigation.”

RMK suggest that this shows an unsatisfactory vacillation between messages being lost due to lapse of time and no relevant messages having been exchanged at all. These matters were not explored with Mr de Stoop or Mr Rodgers in cross-examination, and in any event I do not consider the suggested inference to be justified. There is no inconsistency between (a) Mr Rodgers’ usual modus operandi being not to use WhatsApp or SMS for business matters, (b) Mr Rodgers no longer having access to any such messages from 2018, (c) the witnesses no longer being able to recall such messages and (d) few or no such messages being relevant. The serious allegation that, in effect, relevant messages have been suppressed was not properly advanced at trial and had no proper basis so far as I can see.

On 25 June 2018, Mr Moore met Mr Rodgers at Euronav’s London office. Mr Rodgers offered RMK a discretionary bonus of $1 million. Mr Moore’s evidence was that Mr Rodgers said: “We will pay you $1 million for your work on the deal.”  When Mr Moore objected that this was not consistent with prior assurances, Mr Rodgers allegedly responded: “I don’t care what I said, in fact I am going to give you until 5pm to accept this or the bonus of $1m is off the table.” Mr Moore says he replied: “I cannot believe you have gone back on your word to me”, to which Mr Rodgers is said to have responded:“I do not care, this meeting is now over.” Mr Moore declined the offer, believing it to be inadequate.

Mr Rodgers in his second witness statement said he could not recall the specific words alleged, but that he believed he was a man of his word and that the bonus he offered was more than generous given the work RMK had carried out. In cross-examination, Mr Rodger explained that he felt frustrated during this encounter, and that Mr Moore had been “verballing him up in a way that suggests that I had simply gone back on an agreed promise, which is not the case”. He said he did not agree that Mr Moore’s account was accurate, though he was willing accept it to the following extent:-

“Q: … In particular the first part of what Mr Moore recalls where he says that this is not what he had regarded as being looked after, and you responded, "I don't care what I said. In fact I'm going to give you until 5 pm to accept this or the bonus is off the table."

If that is something that you would not have said, certainly didn't say, then you would've said that in your witness statement, wouldn't you?

A. The distinction I'm trying to draw, my Lord, I may -- I may have used language like that but this was not the purpose of it, it's simply to say this is not what we're here for. This is a -- this is a discussion about how we reach the payment of our discretionary bonus and making sure that it lands well.” (Day 5/23/14-24/3)

Pressed on the evidence in his second witness statement about having made the position abundantly clear to RMK, Mr Rodgers gave this evidence:-

“Q. … You never made it abundantly clear that there was no room for argument about the scope of the work that Mr Kirk was doing, had you?

A. Well I think it is clear isn't it? From the agreement that we've signed.

Q. And if we look at (iii), you have just agreed that you thought it was axiomatic and implicit that any payment, additional payment, would be a discretionary bonus but you hadn't actually said that to RMK, had you?

A. I think my position is that it was -- it was apparent from the fact that we had gone through this long negotiation on the contract.”

RMK argues that the offer of a US$ 1 million bonus was itself inconsistent with Euronav’s position that RMK had no entitlement to further payment. I do not agree. In my view, the exchanges between Mr Rodger and Mr Moore on 25 June 2018, and the bonus offer made, did not reflect or evidence any prior promise or joint understanding about an entitlement to additional payment for extra-contractual work, and were consistent with Euronav having giving indications along the way that it envisaged paying a discretionary bonus, to be the subject of discussion at the end of the transaction.