KB-2025-001160 - [2025] EWHC 2369 (KB)

The pleaded case against Mr Wheeler can be summarised as follows.

Barings is a large asset management business comprising a number of companies which operate globally (“the Barings Group”). The headquarters of the Barings Group is in Charlotte, North Carolina, USA. Barings LLC (“LLC”), a company incorporated in Delaware which has its principal place of business in North Carolina, is the company at the head of the Barings Group.

BISL was incorporated and is registered in England. It acts as a service company which provides services to certain other companies in the Barings Group in relation to operations in the United Kingdom. A key service which it provides is that it employs and supplies the Barings workforce working here.

Mr Wheeler is the former Co-Head of Barings’ Global Private Finance Group (“the GPF Group”). At all material times he was based in London. With Mr Ian Fowler who was based in the USA, he led a team of over 100 employees which included employees who were employed in the USA, and a team of employees based in Europe and Asia (“the EMEA GPF employees”) for which he had direct management responsibilities.

Mr Wheeler was employed pursuant to a contract of employment with BISL dated 5 July 2016 (“the Contract”). His basic salary was in the order of £325,000 but he was also eligible to receive discretionary bonus awards under three schemes: a long term incentive plan (“the LTIP”), a short term incentive scheme (“the STIS”) and a carried interest cash scheme (the “CICS”). Pursuant to these arrangements, Mr Wheeler’s remuneration was more than £4 million for performance year 2023, and more than £20 million over the course of his employment.

Clause 6.5 of the Contract provided, however, that Mr Wheeler would not be entitled to discretionary bonus awards under the STIS and the CICS if his employment had terminated or he was under notice of termination, whether given by him or by BISL, at or before the date when the award might otherwise have been delivered.

Mr Wheeler’s employment was terminable on 3 months’ notice on either side. The Contract included express terms which permitted BISL to place Mr Wheeler on garden leave during any notice period, and he was subject to various post termination restrictive covenants.

The Contract expressly set out various duties owed by Mr Wheeler which are pleaded but which I need not repeat here. In summary, the express terms were incidents of the duties of good faith, loyalty and fidelity and the duty of mutual trust and confidence which are implicit in all contracts of employment. Under clause 4.2, there was also an express duty not, directly or indirectly, to have interest in any business or undertaking or be involved in any activity which would interfere with the performance of his duties or give rise to a conflict of interest.

Although not spelt out in the Contract, the following duties are also pleaded at [20] of the Particulars of Claim (“POC”) as incidents of the implied terms to which I have referred:

“…

(b)

to inform the Claimant of all information of which he was aware which was relevant and material to the successful conduct of the GPF business, of which he was employed as Co-Head, including as to nascent and/or actual commercial threats; and

(c)

to inform the Claimant of all matters relevant and material to the tasks entrusted to him and/or the tasks for which he was responsible and/or involved in the course of his employment, including his own misconduct or breaches of duty or obligation and/or those of which he was aware committed by any other employee of the Claimant or any associated company.”

The POC also pleads, at [22], that Mr Wheeler owed fiduciary duties given: his seniority within the GPF Group; the nature of his duties as a leader including his role in proposing and advising on bonus payments for members of the GPF Group; the degree of autonomy which he enjoyed and the level of trust reposed in him; the degree of influence which he had over others within the GPF Group; and his access to Barings’ confidential information. Those duties are pleaded at [23] POC as follows:

“(a)

A duty of undivided loyalty to the Claimant.

(b)

A duty to act in the way he considered, in good faith, most likely to promote the success of the Claimant and/or the business of the GPF Group of which he was employed as Co-Head.

(c)

A duty not to place himself in a position where his own personal interests conflicted with those of the Claimant and/or those of the business of the GPF Group of which he was employed as Co-Head.

(d)

A duty not to make a secret and/or undisclosed and/or unauthorised profit out of the exploitation of his position as Co-Head of the GPF Group.

(e)

A duty to report to the Claimant any competitive threat to the Claimant and/or the business of the GPF Group of which he was employed as Co-Head, of which he was aware, including wrongdoing by himself or others.

(f)

A duty to report any matter which he considered, in good faith, to be of interest to or material to the success of the Claimant and/or the business of the GPF Group of which he was employed as Co-Head, including wrongdoing by himself or others.

(g)

A duty to comply with the obligations particularised in subparagraphs (e)-(f) above in a prompt and timely manner and/or in such a way as to provide the Claimant with a proper opportunity to consider the information and take whatever action it deemed appropriate in light of it to protect its business and/or the business of the GPF Group of which he was employed as Co-Head.”

BISL alleges that in the last year of his employment Mr Wheeler surreptitiously assisted in the establishment of a competitor to the GPF Group: Corinthia. Mr Wheeler’s recruitment activities on behalf of Corinthia began as early as 13 May 2023, when he introduced Ms Kelsey Tucker, former Global Head of Operations at Barings, to Mr Paul Weightman, Executive Chairman at Corinthia. His efforts intensified over the months which followed and they culminated in the co-ordinated giving of notice of resignation, on 8 March 2024, by Mr Wheeler and 12 other EMEA GPF employees. These employees timed their resignations for on or shortly after 8 March 2024 because that was the day after they each received the second of two substantial discretionary bonus payments from the Claimant, the first having been paid on 22 February 2024 pursuant to the STIS, and the second pursuant to the CICS.

BISL’s case is that Mr Wheeler had accepted an offer of employment with Corinthia in November or December 2023 at the latest. He is now employed in a very senior position by a Corinthia company (I was told that he is a joint owner and Chief Executive of Corinthia), where he works alongside Mr Fowler and 20 other employees who previously worked in, or in support of, the Barings GPF Group.

A key aspect of the claim by BISL is Mr Wheeler’s conduct in relation to the bonus payments made to EMEA GPF employees who had been recruited to join Corinthia. As Co-Head of the GPF Group his responsibilities included proposing annual bonus payments for employees within the GPF Group, including the EMEA GPF employees, and advising BISL in relation to such payments and awards. BISL relied on him to make proposals which reflected an honest and genuinely held belief that they were in the best interests of BISL and in furtherance of the aim of the Barings Remuneration Policy which was to retain existing employees, rather than any collateral purpose or purpose adverse to the interests of BISL.

On 15 November 2023, Mr Wheeler was asked to propose bonus payments for the EMEA GPF employees in respect of the 2023 performance year. He did so on 1 December 2023 and he provided further input and proposals between 9 December 2023 and 3 January 2024.

BISL’s case is that at all material times Mr Wheeler had accepted a senior role with Corinthia with, it is inferred, shares or equity options in that company. He knew that he and Mr Weightman were in the process of establishing a competing business and that Corinthia was recruiting GPF Group employees for this purpose. He also knew about the planned and co-ordinated resignations, including his own intended resignation. These were matters which he deliberately concealed from BISL. Instead of disclosing what was happening, Mr Wheeler acted in his own interests and for the benefit of Corinthia in proposing that a total of £6,306,198 should be paid to him and the departing EMEA GPF employees. He also helped to organise the timing of the resignations so that these sums could be pocketed before BISL was made aware of the team move. A particularly egregious aspect of Mr Wheeler’s conduct in this regard is that on 5 January 2024 he emailed Ms Suddreth (HR Business Partner) to ask whether bonus payments under two of the bonus schemes would be paid on the same date. When he was told that they would not be, he asked when each bonus would be paid. When she told him, Mr Wheeler forwarded his emails with Ms Suddreth to Mr Fowler so that the dates could be incorporated into the plan.

Under the heading “Loss and Damage” BISL pleads, in summary, that had Mr Wheeler complied with his contractual and fiduciary duties BISL would not have paid the sums which it paid to him and the departing EMEA GPF employees on 22 February and 7 March 2024. Instead, BISL would have given all of them notice of termination, depriving them of any entitlement to discretionary bonus under the STIS or the CICS, and placed them on garden leave.

Under the heading “Relief” BISL pleads as the following claims at [53]-[57] POC, which are said by Mr Oudkerk to be abusive and/or bound to fail:

“53.

The Claimant is entitled to damages and/or equitable compensation for the loss and damage caused to it by Mr Wheeler as particularised above. The Claimant accordingly seeks damages in the sum of £6,306,198.

54.

Further or in the alternative, and at the Claimant’s election, Mr Wheeler is liable to account to the Claimant for profits made to and by him consequent upon his breaches of his Fiduciary Duties.

55.

Further or in the further alternative, Mr Wheeler’s bonus payments ….were or included remuneration for his discharge of Fiduciary Duties. Mr Wheeler, having breached those duties, has forfeited any right to that remuneration. The Claimant is entitled to repayment of those sums from Mr Wheeler.

56.

Further or in the further alternative, Mr Wheeler gained an advantage in breach of his Fiduciary Duties to the Claimant as a result of his obtaining shares or equity options in Corinthia. Mr Wheeler obtained those shares or equity options because of his agreement to facilitate Corinthia’s recruitment of a large team of employees from the GPF Group. Mr Wheeler facilitated that recruitment through the breaches of Fiduciary Duty pleaded above. The Claimant accordingly seeks a declaration that all shares or equity options acquired by Mr Wheeler in Corinthia are held on constructive trust for the Claimant.

57.

Further, subject to consideration by Barings’ Remuneration Panel and the Board of Barings Europe Limited (the “Board”), Mr Wheeler’s conduct as particularised herein is eligible for consideration under clawback provisions to which he has agreed to be bound in respect of the variable compensation paid to him between 8 March 2021 and 8 March 2024 in the sum of £12,080,818, being the variable compensation paid to him in the three years prior to his resignation. The Claimant reserves the right to amend these Particulars of Claim to include such a claim following consideration by the Remuneration Panel and Board.”