“Q. Truth is you had raised£500,000 and you had burnt through it all by December 2018? A. That is not true Q. Maybe I am ungenerous. Perhaps if we look at [the bank statements]. You are quite right, by February 2019 out of the£500,000 you had raised, you have£3,000 left? … A. We had burnt through the 500,000 that I had initially put in, yes.”
“… that to comply with insolvency law, we had to be confident that we could either trade out of the Company’s losses, or find investment ….”
“3.3 Please confirm that: 3.3.1 no receiver or administrative receiver has been appointed in respect of the whole or any part of the assets or undertaking of the Company; Confirmed 3.3.2 no step has been taken by the Company or by any other person to appoint an administrator in respect of the Company; Confirmed 3.3.3 no administration order has been made in relation to the Company and no petition has been presented for any such order; Confirmed 3.3.4 no steps have been taken with a view to winding up the Company and no winding up order has been made in relation to the Company; Confirmed 3.3.5 the Company has not stopped payment of its debts, become unable to pay its debts as they fall due or has otherwise become insolvent; Confirmed 3.3.6 no judgment, order or award has been made and is outstanding or unsatisfied against the Company and no distress, execution or other process has been levied on any part of its assets or undertaking; and Confirmed 3.3.7 the Company is not aware of any circumstances that have arisen which entitle or have entitled any person to appoint any person or commence any proceedings for or obtain any order of a type mentioned in any part of paragraph 3.3.
“the Company became insolvent because the investment was made too late and in too piecemeal a fashion. The extensive delays to the factory becoming operational and to the Tetra Recart line being installed meant that the majority of Market Fresh’s investment was swallowed up by overheads and general running costs, e.g. rent, utilities and salaries and not by building the elements of the business which would produce revenue (organising product trials, marketing to new customers, commissioning the second Tetra Pak line)”; and “Had either the original£700,000 been paid in a timely manner, or the subsequent£1.1 million , the Company would undoubtedly have been able to get the factory up and running at full capacity and to thereby be in a position to earn revenue.”
“[Mr Seneschall] stated that there is a long-standing issue with [Ms Jones’] conduct” and that he had provided a history, and the names of individuals who he said would corroborate that allegation. They further recorded, “John — wants Lynne removed.”
“You may have also noted earlier, the plan is to look to suspend John from the board via 51% majority vote and I would like to do that as soon as possible. If we keep to this and then pay the Tetrapak deposit next week, we will be close to the point whereby we have 51% of the board with Lynne's support.”
“Q. Why can you not remember any of this, Mr. McCormick? I have hesitated from asking this question so far, but you can remember literally nothing about all of the things that I am putting to you. Why can you not remember a single thing? A. It was a long time ago. Q. Is that it, passage of time? That is the only explanation for your – I was going to say amnesia, I will not say that word – your inability to recall things? A. It was a long time ago and I cannot remember every conversation. Q. You cannot remember any conversation so far in relation to this stuff. Why is that?
“(1) A member of a company may apply to the court by petition for an order under this Part on the ground— (a) that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or (b) that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial.” (a) that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or (b) that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial.”
“If the company is a joint venture company and the joint venturers have arranged that one, or more, or all of them, shall provide working capital to the company by means of loans, it would, in their Lordships' opinion, be inconsistent with the purpose of these statutory provisions to limit the availability of the remedies they offer to cases where the value of the share or shares held by the applicant member would be enhanced by the grant of the relief sought. If the relief sought would, if granted, be of real, as opposed to merely nominal, value to an applicant joint venturer, such as Gamlestaden, in facilitating recovery of some part of its investment in the joint venture company, that should, in their Lordships' opinion, suffice to provide the requisite locus standi for the application to be made.”
“Prejudice will certainly encompass damage to the financial position of a member. The prejudice may be damage to the value of his shares but may also extend to other financial damage which in the circumstances of the case is bound up with his position as a member. So, for example, removal from participation in the management of a company and the resulting loss of income or profits from the company in the form of remuneration will constitute prejudice in those cases where the members have rights recognised in equity if not at law, to participate in that way. Similarly, damage to the financial position of a member in relation to a debt due to him from the company can in the appropriate circumstances amount to prejudice. The prejudice must be to the petitioner in his capacity as a member but this is not to be strictly confined to damage to the value of his shareholding. Moreover, prejudice need not be financial in character. A disregard of the rights of a member as such, without any financial consequences, may amount to prejudice falling within the section.”
“(1) The concept of unfairness, although objective in its focus, is not to be considered in a vacuum. An assessment that conduct is unfair has to be made against the legal background of the corporate structure under consideration. This will usually take the form of the articles of association and any collateral agreements between shareholders which identify their rights and obligations as members of the company. Both are subject to established equitable principles which may moderate the exercise of strict legal rights when insistence on the enforcement of such rights would be unconscionable; (2) It follows that it will not ordinarily be unfair for the affairs of a company to be conducted in accordance with the provisions of its articles or any other relevant and legally enforceable agreement, unless it would be inequitable for those agreements to be enforced in the particular circumstances under consideration. Unfairness may, to use Lord Hoffmann's words, “consist in a breach of the rules or in using rules in a manner which equity would regard as contrary to good faith”: see p.1099A; the conduct need not therefore be unlawful, but it must be inequitable; (3) Although it is impossible to provide an exhaustive definition of the circumstances in which the application of equitable principles would render it unjust for a party to insist on his strict legal rights, those principles are to be applied according to settled and established equitable rules and not by reference to some indefinite notion of fairness; (4) To be unfair, the conduct complained of need not be such as would have justified the making of a winding-up order on just and equitable grounds as formerly required unders.210 of the Companies Act 1948 ; (5) A useful test is always to ask whether the exercise of the power or rights in question would involve a breach of an agreement or understanding between the parties which it would be unfair to allow a member to ignore. Such agreements do not have to be contractually binding in order to found the equity; (6) It is not enough merely to show that the relationship between the parties has irretrievably broken down. There is no right of unilateral withdrawal for a shareholder when trust and confidence between shareholders no longer exist. It is, however, different if that breakdown in relations then causes the majority to exclude the petitioner from the management of the company or otherwise to cause him prejudice in his capacity as a shareholder.”
"whereas the law of tort does not permit an action against an individual defendant who has caused injury to the plaintiff, the law of torts does recognize a claim against them in combination as the tort of conspiracy if: (1) whether the means used by the defendants are lawful or unlawful, the predominant purpose of the defendants' conduct is to cause injury to the plaintiff; or, (2) where the conduct of the defendants is unlawful, the conduct is directed towards the plaintiff (alone or together with others), and the defendants should know in the circumstances that injury to the plaintiff is likely to and does result. In situation (2) it is not necessary that the pre-dominant purpose of the defendants' conduct be to cause injury to the plaintiff but, in the prevailing circumstances, it must be a constructive intent derived from the fact that the defendants should have known that injury to the plaintiff would ensue. In both situations, however, there must be actual damage suffered by the plaintiff."
"clear distinction between the requirement of predominant purpose under one variety of the tort of conspiracy and the lower requirement of intentional injury needed for the other variety."
"From these and other authorities I derive a general assumption, too obvious to need discussion, that criminal conduct engaged in by conspirators as a means of inflicting harm on the claimant is actionable as the tort of conspiracy, whether or not that conduct, on the part of a single individual, would be actionable as some other tort … In my opinion your Lordships should clarify the law by holding that criminal conduct (at common law or by statute) can constitute unlawful means, provided that it is indeed the means (what Lord Nicholls of Birkenhead in OBG Ltd v Allen[2008] AC 1 , para 159 called 'instrumentality') of intentionally inflicting harm."
"a conspiracy is tortious if an intention of the conspirators was to harm the claimant by using unlawful means to persuade him to act to his own detriment, even if those means were not in themselves tortious." "whereas the law of tort does not permit an action against an individual defendant who has caused injury to the plaintiff, the law of torts does recognize a claim against them in combination as the tort of conspiracy if: (1) whether the means used by the defendants are lawful or unlawful, the predominant purpose of the defendants' conduct is to cause injury to the plaintiff; or, (2) where the conduct of the defendants is unlawful, the conduct is directed towards the plaintiff (alone or together with others), and the defendants should know in the circumstances that injury to the plaintiff is likely to and does result. In situation (2) it is not necessary that the pre-dominant purpose of the defendants' conduct be to cause injury to the plaintiff but, in the prevailing circumstances, it must be a constructive intent derived from the fact that the defendants should have known that injury to the plaintiff would ensue. In both situations, however, there must be actual damage suffered by the plaintiff." "clear distinction between the requirement of predominant purpose under one variety of the tort of conspiracy and the lower requirement of intentional injury needed for the other variety." "unlawful means, both in the intentional harm tort and in the tort of conspiracy, include both crimes and torts (whether or not they include conduct lower on the scale of blameworthiness) provided that they are indeed the means by which harm is intentionally inflicted on the claimant (rather than being merely incidental to it)." (para 93, and cf para 95) "
“What is it that makes the conspiracy actionable as such? To say that a predominant purpose of injuring the claimant in the one case and the use of unlawful means in the other supply the element of unlawfulness required to make a conspiracy tortious simply restates the proposition in other words. A more useful concept is the absence of just cause or excuse, which was invoked by Bowen LJ in Mogul Steamship Co Ltd v McGregor, Gow & Co(1889) 23 QBD 598 , 614, by Viscount Cave LC in Sorrell v Smith[1925] AC 700 , 711–712, and by Viscount Simon LC with the support of his colleagues in Crofter Hand Woven Harris Tweed Co Ltd v Veitch[1942] AC 435 , 441–444 (cf Viscount Maugham at pp 448, 449–450, Lord Wright at pp 469–470, and Lord Porter at p 492). A person has a right to advance his own interests by lawful means even if the foreseeable consequence is to damage the interests of others. The existence of that right affords a just cause or excuse. Where, on the other hand, he seeks to advance his interests by unlawful means he has no such right. The position is the same where the means used are lawful but the predominant intention of the defendant was to injure the claimant rather than to further some legitimate interest of his own. This is because in that case it cannot be an answer to say that he was simply exercising a legal right. He had no interest recognised by the law in exercising his legal right for the predominant purpose not of advancing his own interests but of injuring the claimant. In either case, there is no just cause or excuse for the combination.”
“I will add at this point, Lynne and myself have discussed things at considerable length over the last several weeks and we would be happy to release more equity, an additional 10%, to you in the next month or so, based on a valuation of£350,000 , if that is of interest, bringing your shareholding up to 30% by the end of August, given the already agreed to 10% for£400,000 by the end of that month.”
“General terms agreed at a meeting on 14/05/19: • Dave M to invest£700,000 -£300,000 immediately. As mentioned above c.f270,000 has been paid already and I will share details once Jodie C has collated for me. -£400,000 by end of August. • For this investment Dave will have 20% share in the factory and become the 3rd member of the board. • No board decisions to be made without Dave's input. • Dave to have first refusal to buy out the factory as and when John Seneschall decides to sell. • Dave would like to introduce a potential additional partner alongside himself/Market Fresh in return for a further 10% stake. • I will take up the position of Sales Director for the business, and be Dave's representative on a day to day basis. That said, I will hold no voting rights and Board decisions specifically require Dave's input and vote.” -£300,000 immediately. As mentioned above c.f270,000 has been paid already and I will share details once Jodie C has collated for me. -£400,000 by end of August. • For this investment Dave will have 20% share in the factory and become the 3rd member of the board. • No board decisions to be made without Dave's input. • Dave to have first refusal to buy out the factory as and when John Seneschall decides to sell. • Dave would like to introduce a potential additional partner alongside himself/Market Fresh in return for a further 10% stake. • I will take up the position of Sales Director for the business, and be Dave's representative on a day to day basis. That said, I will hold no voting rights and Board decisions specifically require Dave's input and vote.”
“As requested please find below a broad outline of where the next two tranches of money from Dave's investment will be spent. Clearly, these are broad areas and there needs to be flexibility with some of the sums, but it gives a very clear flavour of what we need, when”
“Effectively there are two tranches we need, one covers the building etc and the second one in early September is to cover the loan re-payment. Clearly, if you can't/don't want to take the option up on the additional 10% for£350,000 we need to make alternative arrangements to cover the loan repayment off (end August), there are several options open to us but I need a plan in place sooner rather than later.”
“… if Market Fresh could demonstrate a working capital need for itself - perhaps to pay upfront for product this would mean that the requirement stayed within Market Fresh or can any of the assets be purchased under the ownership of Market Fresh - this would remove the ownership complication? Alternatively given the delay are there staffing costs which would now be funded through Market Fresh - again showing a working capital need?”
“Post meeting and walking to Oxford Circus with John, it feels like there is a realisation that why would they not do the 50.1%/how can they avoid doing it. Reality as you pointed out, 49.9% with no money in is a pretty good deal.”
“As we all agreed, the next critical step is to get things up and running as soon as possible, to which end, I've had a brief chat with Lynne and shared with her the thinking behind the next tranche of shares to be taken up and by Market Fresh and as I thought she is in broad agreement that it is both the right thing to do and with the right partner. As such, we are in a very good place all round. However, having thought about things on the journey home, I think there's a couple of additional elements we need to include as part of the overall deal. Nothing which is overly dramatic, but elements which allow Lynne and myself to get a little more long term value out of the share sale. So, I think the total 50,1% sale should come in at£2,000,000 , so effectively increasing the value of the 20.1% we've not really touched on before to nearer£47,500 per original share. My reasoning here is if we need£1,800,000 or thereabouts to run the business properly, some money coming to us both would sweeten the pill slightly and be politically expedient from our partners view. (David, I know you can see Sally asking what's in it from our perspective and this would go some way to dealing with that negative). Additionally, I think we would like an increase in salaries, nothing huge, but we are both running well below where we need to be and finally I think we need to build in a couple of employment options which I am sure you already have in place with Market Fresh etc such as health insurance, company car options and for the sake of the business key man insurance cover. Clearly, I am raising these things now as food for thought. As you know, we are very flexible and very adaptable but I feel giving away 50% of the company for what I'm sure will prove in time to be quite cheaply, needs a little sugar coating now just to make the last two years feel worth the effort.”
“I’ve spoken to John again and reiterated how important balance sheet is, re Barclays coming in and allowing everything else to flow.”
“I caught up with David this morning on the money front and all that sounds good and positive. I just want to confirm a couple of things though, so everyone is on the same page. When we discussed the next steps in Soho you proposed an additional£1,100,000 for the next 30.1% of the business, given you currently hold 20%. I countered by suggesting£1,300,00 was a more realistic figure, valuing the business as it stands at£4,000,000 which seems about right. Can we agree what the additional 30.1% will cost you please? Additionally, the one date set in tablets of stone is the repayment (or re-structuring) of the loan against my house. This has to be resolved by 7th September, preferably before. Can you confirm that we will be in a position to satisfy this charge? Other than that, there's the other items mentioned in my last email, which seem unimportant in the great scheme of things, but politically carry much significance.”
“Q. It is fair to say that you kept pushing throughout the summer for the Nucleus loan to be paid by Market Fresh, and we can see an example of that [in the email referred to above at paragraph 255]. So by now we have got to 22nd August. Towards the bottom of [the same email], we can see that you have added to the list of immediate requirements you have added: "And of course, Nucleus Finance£336,000.00 on or before 7th September!!!!!" But you knew by that stage did, you not, that it might not be paid off by 7th September? A. It might not be paid off, yes. Q. And again nobody had guaranteed that it would be cleared, had they?
“Hi John, Managed to catch up with Dave briefly, he is in Ireland. The level that Barclays came back at isn't what was expected, but is ok and can manage it within the cash flow. With that there isn't the cash to clear the Nucleus loan by 7th September. Although clearing the loan has been discussed back in May, as the original financing requirements have changed and increased we have also talked about rolling this over or adding the monthly repayments into the balance sheet for the business to cover. To clarify the latter would not mean the£17,000 a month coming from the£1.8m agreed for the 50.1% share. This would be managed in the overheads within the business. We still aim to get the Nucleus loan away from your house by31st March 2020 as we said last time we were together in London and Dave is currently working on structuring selling a share in Market Fresh for that. The costs continue to raise to bring the site on stream and additional debts added and we are prepared to work with that but we need to work together until we start producing and become commercially viable.
“What I am really upset about is the issue regarding the loan against my house. I have made it very clear from day one of discussions, this is the most important element for me in agreeing to the deal. To be told on Friday that it isn't possible because Barclay's haven't provided the full amount asked for is a huge issue. We agreed to 50.1% of the company so Barclay's would provide the money, if this now isn't the case do they still expect the 50.1%? I suggest not, so what is the deal here. I need more clarity and more explanation please.”
“I think we have to agree a date by which point all of the£1.8 million for the 50.1% of the business will be paid over by,31st March 2020 was mentioned yesterday, is this still the target date? I am looking at ways of flipping the loan against my house, again, I am looking at an extension to the end of March, I believe that was what was agreed as suitable from your position.”
“...I want to put some clear time lines into the agreement, with a section which guarantees all money for the shares will be paid into the Trisant account by31st March 2020 . I'd quite like to give dates for each of the 10% lumps if we can, they will push back on this I have no doubt, but first 10 end October, second 10 end December and final 10 end March might work and be worth proposing and seeing how they react. I'd also like to put in a penalty section (again they will push back) saying failure to deliver against this will result in interest being charged at a rate of 10% per day against the outstanding amount or a figure/timeframe which is workable.”
“So, in an ideal world, next week£100,000 would be very useful and would allow us to get real momentum behind several projects. We could manage with less, but I'd need to do some quick footwork and let people know early to ease things through.”
“I am slightly concerned that this is an investment and as such how we spend it, when we spend it etc is down to us. Clearly, we are investing every penny back into the business so we can get the factory operational as soon as possible. However, if we'd treated this as a standard investment lump sums of£300,000 followed by one for£400,000 would have been the norm, in return for shares in a business with a rosy future. The fact that this hasn't happened, for very understandable reasons, is one of the factors as to why we are facing issues with builders and landlords and why managing the money has been so difficult over the last couple of months.”
“John is very keen for you to confirm a time whereby you can agree and sign the details of the investment. Once you have the agreement in place it will give everyone clarity on the partnership and facilitate more involvement, not just around the sales element but any other areas you feel MF/NWI can be utilised.”
“At the meeting in Soho Square on 14th May, John confirmed further payments were due through May and June. For your due diligence, it would be good for you to get a full list of payments required and have NWI accounts work with John and Andrew (Trisant Accountant) to keep a track of spend. It will also be a lever to ensure work is being carried out in a timely manner as required.”
“We also need an account manager as soon as possible or we simply won't be able to cope and I can't do the job I need to.”
“IMPORTANT PLEASE READ: Trisant Investment I NWI Accounts Team”): “Do you plan to use the NWI accounts team for Trisant and have you spoken to Jodie about it? You mentioned a few weeks ago that as most of the accounting will be invoice generating that may not be a necessity. That makes sense, but when we met on Friday I said it would be prudent for us to be involved especially during these early stages of set up. Start ups as you know are notoriously cash hungry, and I believe it would be hugely beneficial if our NWI team were involved in working with John and Andrew in relation to the ongoing expenditure, particularly in the short term.”
“We will need more money in the (very) near future, be good to catch up in this regard. So, at some point soon, I need£30,000 for more building work,£25,000 for rent, plus£10,000 working capital and certainly by the 28th of the month,£35,000 for wages.”
“For your own due diligence and on your behalf as a proactive investor, I am very keen for us to be involved in the accounting side of things, mainly in this start up phase to ensure we have the right checks in place against investment and proposed spend. Anyone receiving investment should not see this as a negative, and need to remember that it is your investment that is bringing this to fruition as quickly as it now is. Without it, this wouldn't be happening at this pace.”
“That was all I intentionally asked though and didn't speak to him at all about who will control it so for now keep it very top line asking for his access details. He has way to many other things to focus on at the factory to worry about that at the moment. Assume we are managing it and if by any chance he does raise the question let me know and we can agree what to say.”
“A real positive from yesterday's meeting with John is the willingness to bring Will/NWI accounts into the mix. This will give us greater visibility and control going forward. The short term objective of continuing to fund until the Barclays money arrives is still the plan, but will of course be driven by the group cashflow during that time. I am with Will this afternoon to start assessing critical payments, but we will need to agree the level we can fund on a week to week basis.”
“By installing a Tetra Pak line at Trisant, our business model was transformed from a small scale niche-operation to an entirely unique production facility, which had the backing of a global business like Tetra Pak.”
“As just discussed, I can confirm that we will make two payments, one of£75,000 on or before the31st May 2019 and one for around£80,000 (depending on the exchange rate) on or before the31st July 2019 . This is to cover the down payment on the machines being provided as part of the venture between the two parties. I believe we will need to sign a new contract to confirm this. I also understand that the second payment needs to be made before we can sign of on the machines being commissioned. As such if we have to bring the second payment forward, we will do so. I understand this is an unusual and exceptional plan and want to thank you for your flexibility and your energy in sorting this for us. I also understand how important it is to honour this agreement and will ensure we do so.”
“This was discussed in our face to face and I left with the understanding that this was "in the cashflow" and would be paid within 2 weeks. By the terms of the contract, the downpayment was due before installation even started as per the rules on financing from TLC. As far as the rest of the Tetra Pak organisation outside of this email is concerned this has been overdue for 8 months and to be blunt is causing concern at senior management level within Tetra Pak, particularly considering the constant change in scope and VO's we continue to add into the financing, far more than any of our other customers enjoy, against a backdrop of continued non-payment. Some consideration was given to the difficult processing installation, but there have also been several good will gestures made through the project including considerations on equipment pricing, financing flexibility and access to other equipment which has been used in the installation. The downpayment is contractual, non negotiable, and overdue. As there is now no practical reason to withhold payment our only alternative is to put the account on stop until this is resolved which is not the start that this venture needs.
“As you both know I have very recently discovered that the second instalment of the deposit on the Tetrapak machine wasn't put on the lease agreement as indicated, and is in fact now 8 months overdue and they have been chasing. The outstanding balance is€152,742 I£138,856.36 (@ 1.10) Tetrapak work very much in straight lines and although I put a payment plan to Ben Cutts (Business Development Director) because of the length of overdue deposit, Tetra Lavel Finance are not willing or able to accommodate. There is the potential of a deferment of the quarterly rental payments if we get back up to date though. • When the machine is commissioned, lease agreement kicks in and first payment of£33,000 will be due in 3 mths. Currently that would be Feb 2020. ◦ Machine is ready to be commissioned. • If we pay and get up to date they will look to defer payments until we get (more) business through the factory. Although they have rejected a payment plan over 6 months I would at the very least ask for the outstanding balance to be paid in 2 instalments. Tetrapak will not authorise or guarantee use of the machine until deposit is paid, which would result in a delay to our first product launch with Muru.”
“Q. Preference has a certain meaning in insolvency law and I was just wanting to check that what you were saying in your witness statement is the same understanding I have as a lawyer. Was your understanding that it was preferring one creditor over another in a company which was insolvent; the test is a bit more complicated but that is the gist of it? A. I would accept the fact that you, Sir, would know a lot more of the detail. From my accountant's understanding is it is you choose to pay one creditor in front of another to the detriment of all of the creditors and the shareholders not just the action of preferring one. Q. And that issue arises when the company is insolvent? A. Yes, that is my interpretation of it. Q. And so your understanding was company insolvent in November, therefore these issues arise? A. Yes. Q. Would it be fair to say that on your understanding the company was insolvent on one or other of those tests throughout your experience, your time, your involvement with it? A. Yes, like many start-ups, and I think all the forecasts that I generated did not disguise that fact at all. The balance sheet showed that one of the first tests is net current liabilities. On several occasions net current liabilities were shown in the forecast. So, yes, I think during my time I was always very conscious to advise the directors that we were trading under those circumstances but I also advised them that it is legal to be technically insolvent but you can still be a going concern if there is a realistic proposition of trading out of that circumstance for the benefit of all creditors and shareholders.”
“TF and MF recently entered into heads of terms as part of which MF has the right to invest£1.1m (in addition to the previous agreed investment of£700k ) in exchange for shares totalling 50.1% of TF. However, as you know MF has no obligation to proceed with that investment. The longstop date for the investment is31St March 2020 . If MF does not make the full investment by that date, then the position in relation to the shareholdings will be regularised and those shares which have not been paid for will be returned.”
“We appreciate that TF needs a cash injection and also that MF (and the TF board) want good financial governance”, and that to meet those objectives, they had given thought to “other potential solutions”, including (“such as”), “A binding commitment that the investment from MF provided for in the heads of terms is paid in specific tranches with specific payment dates, which will give TF assurance that it will receive funding, rather than handing over control of its financial decision-making with no assurance that any money will be received”
“As for MF, I’ll be stitching them up over the next few weeks too!!”
“Picking up an email from early this week and building on a brief conversation between David and myself yesterday, I thought I'd pop down a few thoughts on how we can improve on roles and responsibilities going forward, particularly now that we are in a new phase of development of the business, which is all about getting more business through the door and making Trisant Foods the go to choice for any company looking for retorted pouches or Tetra Recart. Clearly, Lynne is fully on top of running the factory and all the elements needed to make it work and is very effectively building a team down in Llantrisant to ensure that all future production can be handled efficiently and cost-effectively. The factory always was and should always be Lynne's responsibility. David's team in the broadest sense is looking after the money side of things and the sales side with the multiples and larger accounts. This plays to the strengths of David, Dave and Andrew and utilises the backend staff with Will in particular being key in keeping things tight and running efficiently. As for myself, I think it would make sense to step away from being at the factory quite so much and spend my time building relationships with brands (smaller opportunities than David and co are chasing), putting Trisant on the map through PR and in particular the internet and social media working with the Neverwhatif team in Essex, attending exhibitions and doing the prospecting for new business which is key in making the most of the opportunities that exist. By spending less time at the factory I think will actually improve communication as I will need to actively keep Lynne in particular in the loop of where we are with opportunities, although of course when potential customers and existing customers are on-site I will be there. Likewise, given we are stretched at the moment I am always happy to help out on the factory floor as required.”
“You may have also noted earlier, the plan is to look to suspend John from the board via 51% majority vote and I would like to do that as soon as possible. If we keep to this and then pay the Tetrapak deposit next week, we will be close to the point whereby we have 51% of the board with Lynne's support.”
“are you in the office on Thursday for a catch up on John? Had a chat re his valuation on shares and have emailed you and Jodie. Need to run my next steps proposal by you as I'll also need some of Eileen's time that you will need agree too. Lynne still on the same page.”
“I have been going back through Andrew's [Mr Williams’] emails looking for anything relating to factoring. Nothing yet. But...You and Dave can do your worst as far as I am concerned. He has slated me and my family via emails. I am furious.”
“John Seneschall/Potential Next Steps”
“In order to get John off site, one of the considerations we looked at last week was making his role redundant due to core responsibilities moving to the right members of staff ie operations Lynne and the team, sales/commercial David & the team and accounts Will and Faith. Following a discussion John and I had on Friday (ahead of the Little Freddie meeting) John might have given us some scope to pursue this further. We could probably benefit from Rue's input, but he has sent an email supporting the change in responsibilities.”
“Morning mate, if I send an email today/tomorrow re next steps for John, do you think you might be able to spend a little time on it this week? Email will be an extension of last discussion when Lynne was over. Would like to start taking the necessary steps now. Cheers”
“As you know from the meeting you came to a number of weeks ago, there was discussion about John’s role and the proposal to make the role of MD redundant. We want to try and do this in March. If we do it in that time frame, it will give Dave [Mr Marshall] and the team some time to work on the wider offer of him agreeing to step away from the business. We now have control of the business which was our aim but has been time consuming. Between myself, Will [Mr Farrell], Lynne Jones and Faith Jones we now manage the business and John has little input into any crucial areas.”
“Trisant Foods/Managing Director Redundancy”), and said: “As we have previously, briefly discussed, with the changing priorities of the factory and subsequent requirements of personnel, it has been decided that the role of Managing Director is no longer required. Can we schedule some time as early as possible next week to discuss how we manage and start the process please? John did not start his official employment until August 2018. Until that point, John, Lynne, Sally and Andrew we all consultants iii) Later that day, Ms Harries replied: “Thanks for the update. I cannot advise correctly without having sight of all his personnel files. I need his contract of employment signed, the company handbook or their redundancy policy and an outline of the full business case for the redundancy proposal. If the MD role is no longer needed how was this decided, what was the selection criteria and or business /rational for it ie restructure, finance lead, what etc. This is what he will need to be advised of in writing as part of the process. Initially you stated he was employed from April 2018 so where is the paper trail to confirm it was actually August? It is essential we have paperwork and audit trails or this will end up with a claim I am sure, so it must be done correctly. I will need all this information and copies of all his signed paperwork to outline time scales and process and letters needed.
“[Mr Seneschall] stated that there is a long-standing issue with [Ms Jones’] conduct” and that he had provided a history, and the names of individuals who he said would corroborate that allegation. They further recorded: “John — wants Lynne removed. The business cannot continue as it is. It's not a safe environment, it's not friendly when you come in you say hi morning and Lynne is rude and grunts at you. He even feels bullied by her. She is negative, confrontational and physically obstructive. Her fractious behaviour is damaging to the company. Staff won't work for the company recruitment Company's now won't send them candidates and they are losing client several in the last few months.”
“I openly admit to saying, I knew Mr. Seneschall was on an absolute witch hunt to discredit me and get me out of the business and I made it very clear that if he was going to come after me, we would look at his wrongdoings as well.” “Q. So that is promotion of a dispute, it is not trying to avoid a dispute. Do you agree with me, Ms. Jones? A. I do not, because he has been involved with John for at least a month earlier compiling witness evidence and witness statements against me and I made it very clear that if – for as much as we are all in it together, if we are going to go down that road it is tit for tat. Q. When did you start compiling your evidence then? A. When I found out what John was doing.”
“I might text Dave later. If there was a problem he would let us know, but would be good to know what did or didn’t happen though”
“It would as dependant on the outcome, we could be in the firing line”
“That’s what I was thinking”
“After all due consideration, I find no other alternative but to uphold the decision to terminate your employment. Surrounding the allegation of your behaviour, namely, your foul language and comments made about noted employees, I take your points on board. These things happen due to stress and work pressures. You recognise the behaviour was not appropriate, and you regret it. This in isolation could have easily been dealt with through a dignity at work training course or effective commination's workshop. On the other allegations concerning whether or not you instigated the ET1 claim made by Emma Tucker; the conversations around how things unfolded was inconsistent and seems disingenuous. I have no doubt, based on reasonable probability, and your own statements and accounts, that you instigated or fuelled this matter. You had advance knowledge of a situation developing and it is my view that you were not working in the Company's best interest and at minimum encouraged instead of tried to defuse this issue. This was further compounded by an orchestrated attempt to implicate a fellow director. On viewing the evidence around this allegation, I found that you had very early conversations with Tetrapack employees, these actually took place prior to raising them with Rue. During those conversations, your aim was to gain support from these employees as clout to your allegations which were still to be made. Some of these discussions happen prior to the ET1 being received. On many of the other examples given by you, the stories were half-truths which painted a picture that you wished us to see. Your intention from the outset was indeed to orchestrate a basis on which to remove your colleague Lynne Jones. Finally, my view of this intention was crystallised and made clear from your first interview with Rue Harries, Thursday11th June 2020 @ 10:30am where you stated for the record: 'She is a saboteur and that she will lose nothing, she can walk away after working to destroy things.' and 'She needs to be removed.' Regarding the financial misrepresentations made by you noted in the original allegations, looking only at the legal due diligence questionnaire dated11th June 2019 , you confirmed the financial matters as being a true representation of the liabilities. There is no plausible way you did not know about several of the funds that were not included. I feel these breaches of trust and negligence displayed in your fiduciary duties were as noted by the original chair, Karen Fleming, and as such her decision to dismiss you is upheld. This decision is final and there is no further right is appeal.” and 'She needs to be removed.'
“Appreciate you looking at this and agreeing. You are right, addressing how it is treated needs looking at. Recognising it as a business loan for now would be ok, however we might need to avoid anything relating to board approval just now.”
“It is a one item agenda Administration or funding options and implications on Reward Capital and Market Fresh loans. There is a very short window in which to see a way out of this as so please make yourself available... ...please understand that this is not posturing, my business is under pressure on a number of fronts and should we not see a way through this week I suspect the company will be in administration by Friday.”
“...We note your client's offer to provide the interim funding, for which all parties will be appreciative. We reiterate that any approval for any future loan(s) is only for future loans, and any consent will not be in relation to past lending. That will have to be an issue to be discussed in mediation. As requested our client will need up to date and complete management accounts before he can agree to the further funding but as Market Fresh will be in the trenches producing the financial data for the independent expert, that should not be onerous...”
“...Your clients cannot expect a director to agree a loan without the Board being presented with full and proper financial information, and if the company does go into administration we will draw the attention of the administrators to the poor financial management since Market Fresh came on board. Further, the Board is inquorate without Mr Seneschall and the Board cannot therefore pass a resolution to put the company into administration.”
“...The Chairperson reported that the purpose of the Meeting was to approve a loan facility from Market Fresh to the Company covering payments required to be made by the Company during the period from and including25 January 2021 up to the maximum amount of£339,720.00 (Loan) ...IT WAS THEREFORE RESOLVED that the Company's acceptance of the Loan be fully ratified and approved without reservation..”
“Administration”)and said: “...Due to the continued uncertainty of the future of the company Market Fresh is not prepared to provide any further funds to Trisant. Bank balance: -15k with the following payments due immediately: • Hampshire Trust£1,869 • Reward Capital£9,000 • Tetra£64,500 • Tetra£20,000 • Rates£15,836 By the end of the month there will be a further£178,363 which creates a total of£289,568 . Trisant has no funds and is therefore unable to meet these payments. Accordingly, unless either of you have a solution for funding that is acceptable to the Board, we have no alternative but to place the company into administration in line with our duties as directors. Please provide any solution or comment by 4pm today.”
“As such, there are no funds within Trisant and no third party with any obligation to make payment of Trisant's debts falling due this week.”
“The court … has a very wide discretion, but it does not sit under a palm tree”.”
“…the Court of Appeal said that Mr. O'Neill had a legitimate expectation of being allotted more shares when the targets were met. No doubt he did have such an expectation before 4 November and no doubt it was legitimate, or reasonable, in the sense that it reasonably appeared likely to happen. Mr. Phillips had agreed in principle, subject to the execution of a suitable document. But this is where I think that the Court of Appeal may have been misled by the expression “legitimate expectation.”
“All... I have spoken to Dave (albeit the call was very broken up) and John respectively a short time ago... For info — Final payment of rent was due today in line with the proposal put to the landlord and Alfandari direct debit has bounced back twice this week. I understand John has had to speak to them twice.”
“All... Trisant have a number of payments due once the shareholders agreement is completed. These are listed below. We may need to prioritise but Rent and Alfandari are critical and if not paid can bring it to a close very quickly. Rent was due today as part of the payment plan agreed with the landlord and Alfandari is the regular monthly payment, that they are already chasing, forcefully. If we are to pay anything while the revision on the shareholder agreement is being considered again, it would be these two.”
“Hi all, A positive meeting with John earlier...he has now signed the shareholder agreement, Lynne will do so on Monday. Can we pay the rent and Alfandari?£16,000 and£6,674.8 ?”
“it appears that the shareholders documents are now signed... below is the immediate list that I would like Will and I to pick up in the morning. Watkins Boiler Hire£4,500 Builder£60,000.00 Pension contributions 1,500.00 Leepack Second Half 28,000.00 ... RCT rates 3,000.00 ... PSL (steam etc) 4,000.00 ... Recruitment 6,000.00 126,000.00 ...can we proceed to start to make these payments to the remaining 20%? This of course is not proposed to be a full transfer of£200k but a measured approach. As always builder is key at this stage, although I do want to speak to him to agree a deal on payment schedules.”
“Good morning. Any news? It’s all getting a little difficult now. Timings are going out the window and I’ve run out of things to say to people who are expecting payment. With everything signed I don’t get the hold up. Let me know when you can. Thanks. Very Best J.”
“As discussed, please find attached a full set of forecast figures from September as required. If you have any questions, drop me a line or of course you can talk direct to Andrew. All pretty straightforward, conservative but sensible.”
“... Moving on, these are all the things that are urgent, I'm not doing the pence on things, as that seems unnecessary. So from the top; HMRC£20,277.00 Haraled£3,600.00 Watkins Hire£4,037.00 Baldwins£1,494.00 CL recruitment£5,760.00 Houseman environmental£1,712.00 Thimmonier£1,432.00 PSL/Bibby£27,108.00 Dragon Fire£507.00 Selo machine£28,000.00 Rycon£82.00 HSS Hire£1,139.00 Rasanco£697.00 Thimonnier£1,230.00 Holchem£662.00 HSS Hire£264.00 Europest£46.80 Ultimate Asset Finance£4,086.00 Alfandani/Blackrock£6,675.00 Pensions£1,500.00 RCT£3,000.00 ....All the above are either over due or due. Clearly there is a little flexibility here with some of them, but we need them cleared in the very near future. There's a couple of other things, like wages for January where Lynne, Sally, Andrew and myself weren't paid. Plus loans from my brother which I need to pay off, totalling£30,000 . But let's start with the above, plus some cash in our account so we can operate and buy ingredients etc so we can run trials...”