Month: June 2016

Having originally lost a lawsuit against Citigroup in New York 6 years ago for fraudulent misrepresentation in relation to his disaster purchase of EMI, Guy Hands was  putting that reputational blot behind him when up popped news of the London-based retrial, where he hoped for a markedly different outcome. It soon became clear all Mr Hands’ good reputation restoration work between trials would be forgotten.

As the London case opened we were reminded Hands lost $230m on the EMI acquisition and that he has failed to raise a new fund since. The Daily Telegraph headline “Guy Hands‘ record remains stuck on EMI” aptly summed up his predicament.

For investors and the business world to now know Guy persisted with this legal battle when his memory of events was ‘hazy’ (according to Mark Howard QC) and his testimony ‘confused’, leaves the impression of someone prepared to gamble both time and money in the process of doggedly pursuing an unconvincing case.

It was so different back in 2010. Then, in the wake of the financial crisis, Mr Hands was perceived as a brave man prepared to take on powerful names at a venerable financial institution.  Now, David Wormsley, Michael Klein and Chad Leat now look positively hero-like against the diminished figure of their opponent.

On withdrawing his claim in London today, Mr Hands maintained in his statement: ““The matter is now closed. Terra Firma is looking to the future. We have an exciting portfolio of companies, a talented and experienced team, supportive and loyal investors and one billion euros of capital to invest.”

Perhaps. Yes, Terra Firma recently took a positive step of recruiting former Sainsbury’s Chief Executive Justin King and has acquired and improved solid businesses like Wyevale. However isn’t it a little naive to think this Citi matter can be swept so easily under the carpet?

Mr Hands now has two choices – keep a low personal profile for a while to let the dust settle and allow Terra Firma to speak for itself, taking to the airwaves only once he has business success to promote. Or demonstrate some real bravura, do a reflective profile interview, explain the reasons behind bringing the London case, whilst accepting the defeat with grace (even if Oscar-worth acting skills are needed) admitting the lessons learned from a bruising experience, but crucially, ending the profile with a positive focus on his current successes and future ambitions.

Whatever his preference, he should not enter the Brexit debate as he has done of late. No need to remind people of his offshore status at a time of public disquiet over perceived different tax rules for the rich. He should create a narrative to explain ownership of his businesses on a lifeline like Four Seasons and not be tempted to give Michelin-star or equivalent restaurant reviews to the likes of the FT’s ‘How to spend it’ magazine column. He must be aware that the media vultures are circling, looking for every sign of trouble such as cracks in Terra Firma’s team, company failings and fund redemptions.

Mr Hands almost recovered from his New York debacle. Even by curbing any tendency towards hubris, it’s now doubly challenging for the once ‘star financier’ truly to put this litigation behind him and shine once more.

10 June 2016

It takes a brave, or perhaps admirably thick-skinned, person to bring legal action against a former employer, particularly one that attracts incredible publicity and in an industry known for its heightened egos, celebrity and eye-boggling wealth.   Yet Dr Eva Carneiro’s determination to achieve a fulsome public apology from Chelsea Football Club, and high-profile recognition for her medical talents, appears to have succeeded.

Dr Carneiro and CFC settled their differences. However, the longed-for statement extracted from the Club well after the 11^th hour, has not come without a price.  The (presumably) tactical reference in the Respondent’s filings to a previous financial offer of £1.2m to settle the case, attracted the overnight headlines, thus providing a rather different hue on proceedings.  This is what can happen when a case formally opens, allowing journalists to read-in, at the back of the courtroom and, in some circumstances, be spoon-fed the relevant passages of a Respondent’s Opening.  The gloves tend to come off in a PR war that runs parallel to proceedings inside the Tribunal, and the reputational blows can have longer-lasting effect.

Interesting, for some time the public has been led to believe that Dr Carneiro wanted a public apology from Mr Mourinho above all – yet noticeably this settlement announcement does not provide one.  The ‘Special One’ was forced to a South London employment tribunal to be put on the spot to settle or face the consequences. An appearance in Croydon probably wasn’t high on Mourinho’s wish list, but he had little choice.

Dr Carneiro may believe she needed recognition for her medical judgment in order to secure meaningful employment elsewhere.  Yet is she any more employable as a sports medic now, following Chelsea’s climbdown, than she would have been had she saved herself the exacerbation of ‘distressing and difficult times’ during the past 10 months, by not issuing proceedings?  Negotiating a severance package rather than litigating may have allowed her to have moved on more smoothly, without the enduring attention she will attract as she takes up any new employment. Perhaps though, maximizing attention became part of the game plan, thereby expanding her employment opportunities beyond the sports medicine sphere.  Pure speculation, but an interesting thought.

Of course, no one should have to put up with discriminatory or derogatory treatment in the course of doing their job – but many in less well paid circumstances do take the view that rushing to court is not the only way to put an end to inappropriate, and possibly unlawful, conduct.   There could well be a potential employer who decides to resile from taking on the extremely competent sports doctor in these circumstances because they fear attracting the spotlight of publicity that may follow after a high-profile bust-up with a former boss and employer.  This would never be publicly acknowledged as a reason against hiring, but I’d not bet against it featuring in future considerations – unless the new role would be enhanced by the increased publicity she will attract.

Employment rights are vital in any mature economy, but choosing how and when to rely on them is a practice not always best just left to lawyers.  There is often a reputation aspect to litigation that should not be underestimated. Hard working season ticket holders, having suffered years of ticket price inflation (until the price freeze), may well be wondering what language they’d each put up with for an annual salary of purportedly £280,000 + pitch side attendance at matches, before demanding a 40% salary increase.  Harsh, but true.

7 June 2016