Harlequin and Wilkins Kennedy reach £7.5m settlement
The long-running dispute between Harlequin Hotels and Resorts and top 20 firm Wilkins Kennedy has concluded after the two parties agreed a settlement
9 Aug 2017
Having had an appeal thrown out by the Court of Appeal, Wilkins Kennedy was ordered to pay $11.6m (£9.2m) in damages to Harlequin, made up of approximately £7.5m, plus £1m interest and £2m costs.
Wilkins Kennedy were retained by Harlequin between 2006 and 2010 to provide financial and business advice focused on helping to build and create the Buccament Bay Resort in St Vincent and the Grenadines. In all, 2,000 rooms were sold to investors at Buccament Bay and by December 2016, only around 100 had been built.
Harlequin initially sought damages of $68m for losses arising out of an alleged breach of fiduciary duties and breach of contract or alternatively breach of common law duties of care in failing to perform its duties with reasonable skill and care.
According to Accountancy's Top 75 survey of firms, Wilkins Kennedy's fee income in 2016 was £40.5m. However, a settlement has now been reached.
Wilkins Kennedy declined to comment, while Harlequin is yet to respond to a request for comment.
Richard Spector, managing partner of ELS Legal, which acted for Harlequin, said: ‘From the outset, this case highlighted clear professional negligence on the part of Wilkins Kennedy. Over one million documents were disclosed during the case and many hundreds of thousands more documents were reviewed by the parties.
‘The expert witnesses had compiled voluminous reports and there were around 15 witnesses. Despite Wilkins Kennedy making every attempt to appeal and challenge our claim, including our lien on solicitors’ fees and right to be paid under the DBA, the judgment was fair and consistent throughout.’
Separately in March 2017, Harlequin chairman David Ames was charged with three counts of fraud by abuse of position by the Serious Fraud Office (SFO). The SFO, along with Essex Police, has been investigating the Harlequin Group of companies since 5 March 2013.
Ames’ alleged fraudulent activity took place between January 2010 and June 2015 and he appeared at Westminster Magistrates’ Court on 22 March 2017. A trial is scheduled to start in Southwark Crown Court on 10 September 2018. Ames maintains he is innocent of any wrongdoing.
Harlequin said in a statement in March: ‘After almost four years of investigations, the SFO has decided to charge David Ames. Although Ames is understandably disappointed that the SFO has come to this decision, it is not a surprise given the time and resources that have been committed to the investigation since 2013.
‘For the avoidance of doubt, Ames maintains that he is innocent of any wrongdoing and looks forward to clearing his name. Ames would like to assure investors that Harlequin is not going anywhere and will continue to protect investors’ interests.’
The full case is available here.