Mike Ashley, the controversial Sports Direct and Newcastle FC owner, has won a High Court battle over a £15 million deal allegedly made in a London pub, reports Richard Spector, Managing Partner at ELS Legal.
The case revolved around investment banker Jeffrey Blue. He alleged that Mr Ashley “agreed” to pay him £15 million in the event that the Sports Direct’s shares doubled to £8.
The shares did double in price in the thirteen months after, from £4 to £8. However, the assumed deal was constructed in a London pub after a night of heavy drinking.
Mr Justice Leggatt ruled that no-one would have thought what Mr Ashley said in the pub was “serious”.
He said the agreement was “not a serious discussion”, but was “banter in which Mr Ashley was displaying his wealth and scale of ambitions”.
Judge Leggatt further said the “jocular” remark by Mr Ashley that he would pay Mr Blue was not a contract, nor did anyone else present in the pub that night.
“The fact that Mr Blue has since convinced himself that the offer was a serious one, and that a legally binding agreement was made, shows only that the human capacity for wishful thinking knows few bounds,” he concluded.
According to reports, Mr Ashley did pay Mr Blue £1 million in “other deals” unrelated to the meeting. However, his counsel said they would pursue Mr Blue for £1.5 million in legal costs and indemnity.
The ruling comes shortly after Sports Direct was found to have underpaid temporary workers. The Guardian investigation found that workers averaged about £6.50 an hour – well below the National Minimum Wage.
About Richard Spector: Managing Partner Richard specialises in commercial litigation across a number of sectors. Richard has acted in a number of high profile cases and was heavily involved in the litigation that arose from the collapse of Lehman Brothers. Richard has been involved in a number of cross-border litigation cases and recently acted successfully for the Claimants in Harlequin Property (SVG) Ltd & Anr v Wilkins Kennedy, listed in the Lawyer’s top 20 cases of 2016.