[2025] EWHC 2107 (Comm)

On 1st October 2021, the Claimant issued a notice of events of default to the Borrower and demanded repayment from the Borrower and copied this notice to the Defendants. Subsequently, the Borrower demanded an account of the Claimant’s dealings with and disposal of the assets pledged by the Borrower as security. This also led to an exchange of correspondence which included the Borrower making various allegations against the Claimant. In that letter, the Claimant stated that:

“…

Demand for Repayment

4.

As the Borrower is aware, we provided notice pursuant to paragraph 7 of the CS Extension Letter dated 5 July 2021 that the Outstanding Items (as defined therein) had not been provided and that an Event of Default under the Facility Agreement had occurred (the Initial Event of Default).

5.

The Lender agreed to forbear from taking further action if the Outstanding Items were provided by 12th July, 2021 or 16th July 2021 or such later date as the Lender may communicate to the parties in writing. The Outstanding Items were not provided. In particular, the conditions to the Cohen email have not been met and John Valmorbida has failed to provide a duly executed deed of accession to the Facility Agreement and failed to provide the JV Guarantee. Subsequent additional Events of Default have also come to light since the date of the Letters including, without limitation pursuant to Clause 27.4 (Other Obligations) and Clause 27.5 (Misrepresentation) (the Subsequent Events of Default), in respect of the following breaches of the Facility Agreement:

(a)

Clause 12.3.2 - funds have not been paid into a Designated Account, in fact a Designated Account has not yet been set up;

(b)

Clause 20.12 (No Misleading Information) - we now have reason to believe that there were some matters of which the Borrower was aware that could reasonably been expected to affect the decision of the Lender to provide the facility to the Borrower or the terms on which the Facility might be provided …

(d)

Clause 23.1 (No art trading and copyright business) - we understand that the Borrower has been receiving proceeds of the Hambleton IP rights personally, rather than through the correct Corporate Obligor …”

On 12th June 2023, Quinn Emanuel on behalf of the Claimant wrote to the First and Second Defendants referring to these allegations and also to the facts and admissions which emerged during the Jersey Court proceedings and asked the First and Second Defendants whether they were aware of such matters.

On 5th September 2023, the Claimant sent a letter to the First and Second Defendants seeking their consent to the sale of certain Charged Assets to defray the amount owing by the Borrower to the Claimant (then being US$42,914,420.46), although noting that it was under no obligation to obtain their consent.