Peter Waddell Holdco Limited and Mr Peter Waddell v. Bluebell Cars Holding Limited and Others – High Court of Justice – [2024] EWHC 1627 (Ch) – Case Summary

Relevant for:

Corporate lawyers, contract law practitioners, commercial litigation specialists

This case concerned an application for interim injunctions under a Securityholders' Deed dated 4 April 2022, relating to the affairs of Bluebell Cars Topco Limited, one of the largest car dealerships in Britain.

TLDR:

• Application for interim injunctions under a Securityholders' Deed.
• Dispute over 'Step in Rights' and 'Material Default Event' notices.
• Claimants sought reinstatement of directorship and approval rights.
• Court dismissed the application for interim injunctions.

The case involved Peter Waddell Holdco Limited and Mr. Peter Waddell (Claimants) against Bluebell Cars Holding Limited and others (Defendants). The dispute arose from notices given by HoldCo starting on 7 March 2024, purportedly exercising their 'Step in Rights' following a 'Trigger Event' under Clause 9 of the Securityholders' Deed, and subsequently on 10 April 2024, following an alleged 'Material Default Event' on the part of Mr. Waddell under Clause 19.

The Claimants contended that HoldCo aimed to exclude Mr. Waddell from TopCo's business, and that its conduct was in breach of the Securityholders' Deed, detrimental, and prejudicial to TopCo and the Claimants. They sought to prevent HoldCo and TopCo from continuing in breach of contract and to restore the previous position, requesting interim injunctions to restrain the Defendants from acting pursuant to the notices and reinstatement of Mr. Waddell's rights and directorship.

The Defendants argued that the financial performance of the Group had deteriorated sharply, leading to the exercise of 'Step in Rights' and the investigation of Mr. Waddell's conduct. They contended that Mr. Waddell's behavior was unacceptable, involving allegations of misconduct, and that his removal was necessary to protect the Group's interests.

The Court found that while the Claimants faced an uphill task on their claims under the Securityholders' Deed, there were serious issues to be tried. However, the Defendants' case regarding the adequacy of damages and balance of convenience for refusing the application was overwhelming. The Court concluded that the Claimants had not shown an adequate risk of irremediable harm that could not be remedied at trial absent the injunctions sought.

The Court emphasized that restoring Mr. Waddell to any involvement in or influence on management beyond his remaining rights was highly risky. The potential harm to the Group and HoldCo was glaring, given Mr. Waddell's disruptive and offensive behavior. Consequently, the application for interim injunctions was dismissed.

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 sitting as a Judge of the Chancery Division

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