Olswang is facing a £19m High Court claim for allegedly failing to properly advise on a share sale agreement.
According to the claim, which seeks damages for breach of contract and/or negligence, this forced the sellers to complete a deal that saw them recover only £842,500 for their £24m company in 2000.
The claimants, 10 shareholders of UK software company Omnibus, instructed Olswang on the sale of 100 per cent of the shares in
their business to German company MDAG.
Before completion, MDAG said it could not pay the claimants, and so the claimants tried to walk away from the deal.
However, Olswang’s alleged failure to have advised properly on the share sale agreement led to a situation in which the claimants were forced to complete, even if MDAG did not comply with its obligations.
After completion, the claimants received just £842,500 for the sale and MDAG went into insolvent liquidation.
The claimants will seek to argue that if Olswang had advised properly on the agreement, they would still own the company. They allege that the partner leading the deal, Stephen Hermer, did not turn up to the completion meeting and had actually gone to New York at the time.
A partner and an assistant who knew little or nothing of the deal were sent in his place, it is alleged.
Marcus Barclay, the risk management partner at Olswang, said the firm would defend the claim. “We regret the fact that the claim has been made. It’s in the hands of our solicitors and will be vigorously defended,” he stated.
Olswang’s solicitors are Reynolds Porter Chamberlain. The claimants have instructed Stevens & Bolton partner Andrew Quick and Charles Graham QC of One Essex Court.
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