Home Estate Planning Frasers boss Mike Ashley’s legal battle against Morgan Stanley kicks off in London

Frasers boss Mike Ashley’s legal battle against Morgan Stanley kicks off in London

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Retail tycoon Mike Ashley’s lawsuit against Morgan Stanley will start at the English High Court over allegations of breach of contract and unlawful means conspiracy.

The legal proceedings were issued by Frasers Group, owned by Ashley, in relation to shares in Hugo Boss.

Ashley’s business is claiming the US bank used “unlawful means” to close out bets on Hugo Boss stock, which resulted in the company losing around £50m.

According to Frasers’ claim form, in order to meet the margin call, it offered 4.63m shares in Hugo Boss, £100m in cash and Ashley’s shares in Frasers, with a market value of £1.9bn. This offer was rejected by a letter from Saxo Bank.

Frasers outlined in its claim document that Morgan Stanley “employees decided to impose and maintain a ‘margin call’ on Saxo Bank in relation to the options, knowing and intending that Saxo Bank would pass that demand on to Frasers.”

It added that Morgan Stanley “employees imposed and maintained a margin call of $995m on Saxo Bank in order to force Frasers to close-out or transfer the options away from Saxo Bank.”

Their lawyers told the court that Morgan Stanley committed the following torts, which included; inducing Saxo Bank’s breach of contract with Frasers, causing loss to Frasers by unlawful means, and an unlawful means conspiracy.

Saxo Bank was also named as a defendant, however, that claim against it was stayed pursuant to the order of the court dated 25 June 2021.

According to Morgan Stanley’s defence document, it said “the claims against it are under-particularised, ill- founded and in many cases liable to be struck out as disclosing no reasonable grounds for bringing them.”

Their defence stated that it had no contractual relationship with Frasers in relation to the positions held in Hugo Boss, adding that its only contractual relationship was with Saxo Bank.

It was reported last September that Frasers dragged the chief executive of Morgan Stanley into this dispute. The company filed to a New York court to the court to make James Gorden hand over documents and a testimony for its English court case.

For this case, Ashley’s group has instructed City-headquartered law firm RPC’s partner Simon Hart, while the US bank called on its Canary Wharf neighbour, Clifford Chance’s partner Helen Carty.

The trial formally commenced on Monday, but there are two reading days for the judge, leading the first day for all parties to be in the courtroom on Wednesday, at the Rolls Building. The trial is scheduled to last three weeks at the London High Court.

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