Peter Waddell Holdco Limited & Mr Peter Waddell vs Bluebell Cars Holding Limited & Others

This case concerned an application for interim injunctions by Peter Waddell Holdco Limited and Mr Peter Waddell against Bluebell Cars Holding Limited and others, focusing on the enforcement of rights under a Securityholders' Deed.

TLDR:

• Claimants sought interim injunctions to prevent the exercise of 'Step in Rights' and 'Material Default Event' notices.
• Dispute arose from the alleged exclusion of Mr Waddell from the business of TopCo.
• High Court dismissed the application for interim injunctions, citing lack of irreparable harm and balance of convenience.

The case involved Peter Waddell Holdco Limited (PWHL) and Mr Peter Waddell (Claimants) against Bluebell Cars Holding Limited and others (Defendants). The dispute centered around the enforcement of rights under a Securityholders' Deed (SHD) following Mr Waddell's sale of a minority interest in his business to Freshstream Investment Partners LLP.

TopCo, a major car dealership group, was founded by Mr Waddell. He sold a minority stake to Freshstream, leading to the creation of the SHD. PWHL, controlled by Mr Waddell, held the majority shares, while HoldCo, a Freshstream subsidiary, held the minority shares. The SHD outlined rights and obligations, including 'Step in Rights' (SIRE) and 'Material Default Event' (MDE) clauses.

The dispute arose when HoldCo issued notices exercising SIRE and MDE rights, leading to Mr Waddell's suspension and removal as a director. The Claimants argued that these actions breached the SHD and sought interim injunctions to restore Mr Waddell's position and rights.

The Claimants contended that HoldCo aimed to exclude Mr Waddell from TopCo's business, violating the SHD. They sought to prevent HoldCo from acting on the SIRE and MDE notices and requested Mr Waddell's reinstatement as a director. They also sought a speedy trial to mitigate the impact of any interim relief.

During the hearing, the Claimants abandoned their request for Mr Waddell's reinstatement and instead proposed appointing a non-executive director. They continued to seek enforcement of approval rights under Schedule 1 of the SHD. The Defendants argued that the SIRE and MDE notices were valid and justified due to Mr Waddell's alleged misconduct and the Group's financial underperformance.

The Court examined the legal principles, including the American Cyanamid guidelines, and found that the Claimants had not demonstrated irreparable harm or a balance of convenience in their favor. The Court noted that the Group's financial performance had improved after the SIRE notice and that reinstating Mr Waddell could cause significant disruption and harm to the Group.

The Court concluded that the Claimants' evidence was insufficient to justify interim relief. The application for interim injunctions was dismissed, and the Court invited further submissions on an expedited trial and costs.

Legal representatives: Paul Chaisty KC and Nick Taylor for the Claimants, George Spalton KC and Mark Wraith for HoldCo, Edward Davies KC for TopCo.

Judicial Panel: Mr M H Rosen KC

Case Citation Reference: [2024] EWHC 1627 (Ch)