Thought it be a a god time to post this, as previously mentioned they don't fart without the authorisation of the owners. Following the below fiasco, the lead is even more shorter
Dear Shebby,
I thought I would send yourself and the owners a summary of the Judge’s verdict on our application to remove the admission of liability to pay Henning Berg a salary calculation over 2 1/2 years.
You will recall Derek Shaw and Brabners admitted liability for this sum without informing the owners. This can be evidenced by Derek Shaw’s conversation with Brabners which is on the file where it states “she will not like this but will have to do it and ease it into her”.
Our Application on 16th April 2013 was to attempt to remove / withdraw the admission of liability and go to a trial to hear this matter in full.
You will be aware from my previous notes that upon investigating this matter further and going through the witness statement with Derek Shaw that I did have deep reservations about this matter going to full trial as a result of feeling that Derek Shaw would not make a reliable witness as he seemed to be unsure of key events.
In short, the Judge today has dismissed our Application to withdraw the admission. As such, the admission by Derek Shaw and Brabners will stand and a further sum of monies (approximately £50k) will have to be paid to Henning Berg on to of the monies already paid.
The Judge found that:
1) He did not believe the evidence as submitted by Derek Shaw;
2) Derek Shaw had not told Henning Berg or his advisors that he did not have the authority to enter into that contract;
3) Derek Shaw removed the 12 month notification period from the contract and it was, he found, acceptable for Henning Berg and his advisors to rely upon Derek Shaw’s authority to bind the owners;
4) There was contradictory evidence before him (letters regarding the investigation viz a viz notification on the Club’s official website that their was no investigation);
5) The Club had neither suspended nor terminated Derek Shaw’s contract therefore: -
he did not believe the admission should be withdrawn and Judgment should be entered against the Club.
The situation the Club faces itself in is, in my opinion, wholly unfair and results from the removal of the twelve month notification period and the initial admission of liability. This factor is even more frustrating when you consider the point at calculation of the monies owed to Henning Berg under the contract is higher than the amount of money he would have earned if he had remained at the Club for the full duration. We must not forget that payment ought to have been made within a ridiculously short length of time of 28 days. This again is a mistake that had been made either by the MD or by Brabners Chaffe Street when drafting the contract.
Next Step
In my opinion the Club now have to consider the following:
1. The position of the MD;
2. Whether there are any legal grounds to pursue a claim for damages against Brabners; and
3. Protection for the owners at Boardroom level.
I am happy to advise briefly (and in more detail if requested) as follows:
a) The actions by the MD, either deliberately or by mistake which may constitute gross misconduct and as such suspension / termination are available by way of remedy to the Club immediately. In addition, contractually the Club has the right to pursue such damages against the MD. The owners must consider this matter.
b) Potentially, as a result of the advice that has been given by Brabners, and in some cases not given, could lead to a potential action against Brabners for damages. We should consider this in detail; and
c) Currently the owners do not appear to have any one of their representatives on the Board and as such, I am concerned that the owners are not protected at Boardroom level. Consideration should be given to (perhaps yourself) being appointed to the Board and therefore being in a position to carry out the owners’ wishes. In addition, the position of the MD could also be reviewed (please see my earlier point).
I have to say that for this situation to arise at MD level of a Plc is quite extraordinary and in my view in football is unprecedented.
I would strongly urge for an urgent review of the structure and corporate governance of the Club in order to avoid a repeat or confrontation between the Board and the owners, both of which would be highly damaging to the Club.
Undoubtedly the Club has received over the last few days some bad publicity as a result of the Henning Berg situation and may do so in tomorrow’s press. I would therefore expect that the fans and the press will expect the owners to act decisively on this matter.
I wish to reassure both yourselves and the owners from a legal point of view that everything that could be done was done.
In addition, the Club will also be liable for not only its own legal costs but those of the advisors to Henning Berg.
Should you wish to speak with me to discuss please do not hesitate to contact me on my mobile (07748 980 707)
Kind regards
Yours sincerely
Chris Farnell
Partner
IPS Law LLP
(dictated not read)
David House
10-12 Cecil Road
Hale
Cheshire
WA15 9PA
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