High Court ruling backs Stobart Group in bitter feud with former chief executive

A High Court judge has ruled in favour of the Stobart Group in a long-running feud which has threatened to tear the business apart.

The public row at the top of the Cumbria based logistics company saw its former chief executive Andrew Tinkler fired from the board.

Mr Tinkler was attempting to oust Stobart’s chairman Iain Ferguson and replace him with his friend and neighbour Philip Day, who owns the Edinburgh Woollen Mill Group.

The logistics group accused Tinkler, who was paid more than £5m last year in bonuses and long-term awards, of breaching his contract and fiduciary duty to shareholders, and trying to destabilise the company.

And this morning a high Court ruling appeared to back the firm.

His Honour Judge Russen QC announced his findings and a statement has been issued to the Stock Exchange.

According to the ruling Tinkler acted in breach of his fiduciary and contractual duties to the Company in respect of:

Speaking to the Company’s significant shareholders and criticising the board’s management and the group’s business and agitating for the removal of its chairman Iain Ferguson;

Improperly sharing confidential information with Philip Day;

Sending his Letter to Shareholders and the Communication to Employees ; and orchestrating the Executive Leadership Team letter and the “petition”;

The judge ruled the dismissal of Mr Tinkler as an employee of the Company on 14 June 2018 was a lawful and valid act.

And the removal of Mr Tinkler as a director of the Company on 14 June 2018 was a lawful and valid act.

Mr Tinkler’s counterclaim for reinstatement as an employee and a director of the company has been rejected.

The Company did not establish its claim of an unlawful conspiracy.

Four directors, Iain Ferguson, Warwick Brady, John Coombs and Andrew Wood, did not breach their duties to the company, except in respect of a transfer of 5,320,425 shares (equating to 1.5% of the company’s then issued share capital) to the Employee Benefit Trust ahead of the company’s AGM.

However, the court concluded that this transfer of shares was valid as a matter of law, and even if the votes for these shares had been discounted, Mr Ferguson would still have been re-elected.

A further hearing will take place for the court to consider what damages the company is entitled to receive from Mr Tinkler in connection with the breaches of his fiduciary and contractual duties to the company.

At the time of his sacking chief executive, Warwick Brady, said: “Mr Tinkler’s actions, particularly in recent days, have threatened to destabilise the company and severely impacted my ability and that of my team to manage the business on a day to day basis and deliver the agreed strategy. This is against the interests of all of our shareholders.”

In a letter outlining the reasons for his dismissal, Stobart’s law firm Rosenblatt accused Tinkler of having a “flagrant disregard for his fiduciary and contractual duties”, and having “set about subverting and disrupting the company in his own interests”.

Mr Tinkler, who remains a major shareholder in Stobart, said: “In light of the Judge’s findings, Mr Brady, Mr Ferguson, Mr Coombs and Mr Wood have no place on the board of Stobart Group and they should all step down without further delay.”