Mike Ashley and Sports Direct take another hammering in courts on Thursday – This time Debenhams
This year gets ever worse for Mike Ashley and his Sports Direct (and related) empire.
Thursday bringing news of his latest reversal in the courts.
Mike Ashley already under pressure with all kinds of setbacks at Sports Direct and the rest of his retail empire, including a £605m unexpected tax bill landing from Belgian authorities, not to mention Newcastle finally saying enough is enough, with 10.000 unsold season tickets and rapidly falling crowds.
Today saw Mike Ashley and Sports Direct lose their case in court with Debenhams (an involvement/investment in this particular business being arguably Ashley’s very best/worst, depending on whether you want him to be successful or not, Ashley and Sports Direct believed to have lost over £150m on this deal alone).
Debenhams had launched a rescue deal with landlords to cut rents and to close 50 stores and on Thursday a judge has ruled this to be legal.
Mike Ashley and Sports Direct had funded a move by landlords to take Debenhams to court, claiming that the terms of the insolvency process (Company Voluntary Arrangement – CVA) were unfair.
However, as the Belfast Telgraph reports:
Mr Justice Norris told the High Court that four of the five grounds for appeal had failed, and criticised the behaviour of Sports Direct for personal attacks on the integrity of Debenhams’ directors.
Mr Ashley had previously called for Debenhams’ advisers to “go to prison, given their skulduggery in undermining shareholders and other stakeholders, such as employees and pensioners” after the company refused his offer of a £150 million loan in return for him becoming chief executive.
He said Debenhams “seriously considered” accepting the funds but believed the conditions – including installing Mr Ashley as boss – were “too onerous or impossible to fulfil” especially because Sports Direct owned rival House of Fraser.
The judge added that it was “entirely plausible” that Mr Ashley wanted to buy Debenhams to get “an advantageous price” or “the elimination of a competitor to House of Fraser”, which the business tycoon bought last year.
“Dealings were also constrained by the reluctance of Sports Direct to sign up to a non-disclosure agreement” before looking at Debenhams’ accounts, he added.
The judge was also scathing about Sports Direct’s involvement in the case, in particular, criticising the company for not challenging Debenhams’ claim that new funding raised in March was secured debt, rather than unsecured.
He said: “The applicants had the opportunity to advance this case in evidence in reply, but squandered it by seeking to adduce the evidence of a business consultant retained by Sports Direct covering so much of the history concerning Sports Direct’s attempts to remove members of the Debenhams board and to have Mr Ashley appointed CEO, containing such accusations of mismanagement and misrepresentation by the board, and such personal attacks on the integrity of the Debenhams board that it would have been an injustice not to allow them to be tested: yet to permit cross-examination would have derailed the expedited trial. So I did not admit it.”
Newcastle fans hoping that the more pressure that falls on his retail empire, the more chance of Mike Ashley selling the club.
Ashley has ruthlessly used the football club to promote his retail empire, massive worldwide promotion of Sports Direct and his other brands, with an average of only £83,333 per season over the past 12 years paid to Newcastle United.
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