Just stumbled across this news story. Not a good day for one of our co-owners.
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Fund giant wins £10.4m legal claim against co-founder
By Selin Bucak / 05 Oct, 2016 at 14:17
Fund giant wins £10.4m legal claim against co-founder
Marathon Asset Management has won its legal battle against co-founder Jeremy Hosking after his £10.4 million claim was dismissed.
Marathon, which runs $50 billion (£39 billion) in institutional mandates, has been in dispute with Hosking since he gave notice of his intention to retire in 2012. Hosking was accused of breaching ‘contractual and fiduciary duties’ during his time there because he discussed plans for a new business with other employees.
Following private arbitration, Hosking had paid Marathon £1.38 million in damages. Marathon has said that due to his actions it lost the chance to retain three staff members.
He was also ordered to pay back £10.4 million - half of the profits Hosking received for the period between mid-July and mid-December 2012 - in 2015. That was subject to an appeal but this was dismissed today.
In the original decision, the arbitrator had concluded that the profit share of a partner or LLP member could be subject to forfeiture because it could be viewed as remuneration.
Hosking co-founded Marathon in 1986 with Neil Ostrer and William Arah. Following his departure he set up Dublin-listed asset manager Hosking & Co.
Herbert Smith Freehills, the firm that represented Marathon, commented: 'We and the counsel team are delighted with today's judgment, which was clearly the right result. The principle of forfeiture can and plainly should potentially apply to partners or members of an LLP as it does to other fiduciaries.
'The arbitrator found that Mr Hosking acted in deliberate breach of his fiduciary duties and in light of the specific terms of the LLP Deed in this case it was just and proportionate for part of his remuneration to be forfeit.
'The judgment is also helpful in reinforcing the strong bias in favour of finality in the context of disputes resolved by arbitration. Appeals should only be permitted in very limited circumstances for good reason.'
Maria Frangeskides, a partner at Orrick, Herrington & Suttcliffe, who are repsenting Hosking, said: 'We are disappointed with the result but accept the judge’s decision. We expect this decision regarding forfeiture of partnership profits will have wide implications for partnerships and LLPs.'
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Fund giant wins £10.4m legal claim against co-founder
By Selin Bucak / 05 Oct, 2016 at 14:17
Fund giant wins £10.4m legal claim against co-founder
Marathon Asset Management has won its legal battle against co-founder Jeremy Hosking after his £10.4 million claim was dismissed.
Marathon, which runs $50 billion (£39 billion) in institutional mandates, has been in dispute with Hosking since he gave notice of his intention to retire in 2012. Hosking was accused of breaching ‘contractual and fiduciary duties’ during his time there because he discussed plans for a new business with other employees.
Following private arbitration, Hosking had paid Marathon £1.38 million in damages. Marathon has said that due to his actions it lost the chance to retain three staff members.
He was also ordered to pay back £10.4 million - half of the profits Hosking received for the period between mid-July and mid-December 2012 - in 2015. That was subject to an appeal but this was dismissed today.
In the original decision, the arbitrator had concluded that the profit share of a partner or LLP member could be subject to forfeiture because it could be viewed as remuneration.
Hosking co-founded Marathon in 1986 with Neil Ostrer and William Arah. Following his departure he set up Dublin-listed asset manager Hosking & Co.
Herbert Smith Freehills, the firm that represented Marathon, commented: 'We and the counsel team are delighted with today's judgment, which was clearly the right result. The principle of forfeiture can and plainly should potentially apply to partners or members of an LLP as it does to other fiduciaries.
'The arbitrator found that Mr Hosking acted in deliberate breach of his fiduciary duties and in light of the specific terms of the LLP Deed in this case it was just and proportionate for part of his remuneration to be forfeit.
'The judgment is also helpful in reinforcing the strong bias in favour of finality in the context of disputes resolved by arbitration. Appeals should only be permitted in very limited circumstances for good reason.'
Maria Frangeskides, a partner at Orrick, Herrington & Suttcliffe, who are repsenting Hosking, said: 'We are disappointed with the result but accept the judge’s decision. We expect this decision regarding forfeiture of partnership profits will have wide implications for partnerships and LLPs.'
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