Manchester firm Cobbetts is suing the makers of Sugar Puffs and Fox’s Glacier Mints, claiming the company owes it over £255,000 in unpaid fees.
Cobbetts issued the claim against food manufacturer Big Bear Group, which owns Sugar Puffs and Fox’s Glacier Mints, in the Queen’s Bench division of the High Court on 25 April 2012.
The claim relates to a mandate taken by Cobbetts corporate partner David Armitage, who is based in Leeds. According to the claim, Armitage won a tender to act for Big Bear on a proposed Aim float in autumn 2009, when Armitage was still a partner at Squire Sanders legacy firm Hammonds.
Armitage had agreed to advise on the float for between £125,000 and £150,000 plus disbursements and VAT.
When Armitage moved to Cobbetts in December 2009, Cobbetts bought the work in progress from Hammonds – mostly due diligence at that point – and Armitage continued to work under the same terms as he had agreed when he was at Hammonds.
In March 2010, Big Bear decided not to go ahead with the float, but instructed Armitage to prepare for a potential deal with private equity investors or a trade buyer. This fallback deal also began to look doubtful and with no fees being paid for work on the abandoned Aim float, Armitage contacted Big Bear to talk about payment, according to the claim form.
With terms agreed – one of which being that if an exit transaction became possible after the deal was aborted Big Bear would let Armitage know and instruct him – Armitage continued to work on the project and received payment for one invoice in the meantime for work done. The firm claims that towards the end of April 2010, Big Bear contacted Armitage and said the fallback deal was effectively aborted.
The claim form states that in 2011, Armitage learned that Big Bear had been sold to Raisio Group in a deal that did not involve Cobbetts. He emailed his contact at Big Bear, reminding him of their earlier agreement and how he had agreed to “take a hit on current fees[…] if we were able to take an uplift on a successful exit however that came about, as well as act for you,” according to the claim form.
Cobbetts is now suing Big Bear for £95,342.44 and/or £160,629 in damages, or damages of £255,971.44, plus interest and costs. The firm has instructed Maitland Chambers’ Dominic Chambers QC.
Cobbetts declined to comment. Big Bear could not be reached in time to comment.