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The SPA and the MSA
The SPA and the MSA
On 25 June 2008, CPW and BBUK, which, at the time, were unrelated parties, entered into a sale and purchase agreement (the “SPA”) and a management services agreement (the “MSA” and, together with the SPA, the “Agreements”).
The terms of the SPA provided for CPW to sell to BBUK “the Goodwill and the right to carry on the Businesses” for a consideration of £50,800,000, with £50,799,000 apportioned to the Goodwill.
The SPA specifically envisaged that CPW and BBUK would enter into the MSA.
The MSA provided for CPW to operate and manage the Businesses on BBUK’s behalf in return for a management charge equal to 95% of the revenues of the Businesses. The management charge was subsequently reduced by agreement to 91.19%.
- Heading
- Introduction
- Key parties
- Acquisition of the Businesses
- The SPA and the MSA
- The Degrouping
- Procedural background
- the agreed issues
- the agreements
- The SPA
- The MSA
- The Side Letter
- Initial observations on the Agreements and the Side Letter
- other documents
- The Prior SPAs
- The Property Services Agreement
- The Brand Licence
- The Accounts
- The Invoice
- “ About the matter we have finished checking
- “Partial closure notice (PCN)
- The issues – a summary
- Issue One – applicability of the authorities in relation to statutory construction
- Conclusion
- “15 In the task of ascertaining whether a particular statutory provision imposes a charge, or grants an exemption from a charge, the Ramsay approach is generally described – as it is in the statements
- Issue Two – the scope of the rule prohibiting assignment “in gross”
- Conclusion
- Issue Three – ownership of the Businesses following the execution of the Agreements
- Conclusion
- No provision in the Agreements for the transfer of the Businesses
- No provision in the Agreements for the transfer of assets other than Goodwill or the assumption of any liabilities
- No transfer of employees
- Did BBUK carry on the Businesses after the Agreements became effective?
- This meant that the only way that BBUK could carry on the Businesses was through CPW as its agent. In that regard, I do not doubt the fact that it is possible for a company to carry on a business thro
- Entitlement to the profits of the Businesses
- Conclusion in relation to the ability to dictate the overall strategy and direction of the Businesses and entitlement to the profits of the Businesses
- Final observations
- Conclusion
- Issue Four – assignment in equity
- Conclusion
- Issue Five – not the same asset
- Conclusion
- Issue Six – the relevance of the transaction effected by Agreements in the event that Section 179(3) applied
- Conclusion
- Issue Seven – the tax consequences of the transaction effected by Agreements in the event that Section 179(3) applied
- Conclusions