Hampson faces multi-million pay-out after losing High Court battle with Grove

AEROSPACE group Hampson Industries faces a multi-million pound pay-out after a losing a High Court legal action brought against it by a consortium of private investors led by Midland industrialist David Grove.

The Black Country firm is now deciding whether to appeal the judgement.

The consortium, which represents Skelmersdale-based Erlson Precision Components, formerly Hampson Precision Automotive (HPA), had claimed the parent company failed to disclose full details about the state of HPA’s customer relationships prior to the £2.5m deal last June.

In particular, it said it had not informed the group of investors that at the time of the deal one of HPA’s main customers – Cummins Turbo Technologies – was set to pull out of its dealing with the firm.

In view of this, Mr Grove said the consortium had based their decision to buy HPA on unreliable forecasts for the business.

In his ruling, Mr Justice Field said Hampson’s former chief executive Kim Ward, who stepped down last year, had misled the consortium.

The judge’s ruling means Hampson is now obligated to re-acquire the shares in the capital of HPAL and to reimburse Erlson with the original £2.5m outlay. Hampson must also make a contribution towards Erlson’s legal costs.

There is also an associated damages claim, the amount of which has yet to be assessed.  Hampson said a further update on this would be made when information was available.

In an update to the London Stock Exchange today, Hampson chairman Chris Geoghegan said: “We are naturally disappointed and are very surprised at the outcome of this litigation, given the professional advice consistently received by the board on this matter.  

“However, we note that no finding of wrong-doing was made against any serving officer or director of Hampson.  While we respect the court’s findings, we will carry out a detailed review of the judgement and will consider whether to appeal.”

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