Naomi Rovnick
Peter Carter-Ruck & Partners got in on the battle for AIM-listed Murray Financial Corporation (MFC) last month, when former chief executive Ken Murray instructed the firm to launch an unusual defamation claim against Resurge, the institutional shareholder that forced his resignation.
Murray, a high-profile Scottish businessman, was forced to resign from the board of Murray Financial, a building society takeover vehicle, at an extraordinary general meeting convened by Halliwell Landau client Resurge, a finance company that owns 30 per cent of MFC.
It is unusual to involve libel lawyers in a corporate battle, but according to one lawyer involved in the case, Murray instructed Peter Carter-Ruck as a tactic to "unsettle the other side".
Murray was prompted to instruct Peter Carter-Ruck after Halliwells wrote a letter to MFC's company secretary stating that some of MFC's activities represented a failure in its duty to shareholders. Halliwells instructed Paul Fox, a partner at media firm H20, to defend Resurge.
A lawyer close to Resurge said: "The letter was simply stating a basic position with reference to the Companies Act."
Many defamation firms are trying to break into this area, but one of the City's leading corporate lawyers said it is near impossible to bring libel law into hostile corporate battles.
Letters between shareholders and companies are mostly covered by the law of qualified privilege, which protects communications between people within organisations.
Herbert Smith corporate litigation partner Alan Watts said: "I have advised on bringing a defamation action into disputes between shareholders and companies, and my first word of advice is 'don't'. Defamation is incredibly risky, especially as you could end up in front of a jury by pursuing a claim. It's only ever a tactic of last resort."
Murray has also criticised Resurge for making an incorrect statement to the London Stock Exchange regarding Halliwells partner Julian Lewis. Lewis is a non-executive director at Resurge and was elected to the new MFC board, but the company told the Regulatory News Service that Lewis was not one of its directors when it proposed to add him to the MFC board on 25 June this year.
Lewis has officially been a director of Resurge since 10 June, but Resurge has said this was a mistake resulting from his director's application being sent to Companies House early.
