Bracewell-Smith settles claim against Deloitte and Linklaters following Arsenal investment dispute
No-one took the blame so the dispute with the magic circle law firm and Big Four accountancy firm was settled
Former Arsenal investor Lady Nina Bracewell-Smith has settled her claims against Big Four business Deloitte and law firm Linklaters.
Bracewell-Smith previously sued the two firms after they advised her on the sale of her 15.9% stake in Arsenal football club to the current majority owner Stan Kroenke, owner of Kroenke Sports & Entertainment.
The investor’s claims that the magic circle law firm was negligent and in breach of its duty of care when advising her on loan notes that were exchanged for the Arsenal stake was settled at the High Court in London on 12 July according to Law360.
In the initial lawsuit it was claimed that the sitting of loans in the UK exposed Bracewell-Smith unnecessarily to £10m of losses and costs of more than £1m. She argued she would not have faced these if the loan notes had been sited offshore.
Deloitte’s defence in court was that it had been unaware that the loan notes would be cited in the UK and it had no such duty to check this.
The top accountancy firm resigned as Linklaters’s auditor earlier in 2018 and was replaced by its rival PwC.
Companies House filings reported that Linklaters paid Deloitte £2.5m for both audit and non-audit services over the 2017-2018 year.
It claimed Linklaters either knew or should have known this, even saying that they had made the law firm aware of this requirement.
Linklaters defended itself by saying its duty of care did not extend to tax advice, which was actually the job of Deloitte.
The law firm said it had ownership of “non-tax aspects of the legal documents needed to effect such a sale.”
Linklaters added that the clearance letter for sale, drafted by Deloitte, “did not specify that the loan notes would be registered offshore”.
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The two firms seemingly blamed each other for the mishap. Deloitte pointed out its duty was simply “to review and to provide comments and suggestions on draft legal documents when specifically requested to do so by the claimant.
The accountancy firm concluded that even if it was found liable the fine would be capped at £500,000.
Linklaters added that it was not responsible for damages.
