Mishcon faces £65m lawsuit over claims its ‘negligent’ advice to led to collapse of London property deal
A Jersey registered real estate fund has sued London law firm Mishcon de Reya for £65.8m over claims the firm’s negligent advice led to the collapse of a major property deal.
Property investor Aurium Real Estate London Ultra Prime Ltd is suing Mishcon after the law firm advised the fund to “build around” a hold-out tenant which refused to leave premises overlooking Hyde Park.
The investor told a High Court today that Mishcon’s advised it to begin demolishing the building from the “top-down,” on the grounds that doing so would not violate hold-out tenant Berkeley Credit & Guarantee Limited’s (BCG’s) lease.
Aurium claimed a £158m property deal, to sell the Hyde Park premises to a Hong Kong listed developer, later collapsed after BCG issued proceedings claiming the build around strategy breached its lease.
Aurium is now suing Mishcon for £65.8m – equivalent to a sum of £48m plus interest – after claiming Mishcon gave it “negligent advice”.
In a statement, a spokesperson for Mishcon said “we believe that this claim is meritless as set out in our defence.”
In court, Mishcon claimed Aurium’s case has been “constructed with hindsight,” as the firm said its advice had “general in nature” and should not have been taken as a “green light” to pursue a build around strategy.
The firm said Aurium’s backers are “wealthy and sophisticated investors” as it accused the “offshore fund” of lacking transparency.
Mishcon’s lawyers said the fund “appears to be a vehicle used by Simon Pearson and Joe Penna… together with another individual, to invest, via a complex series of transactions involving companies in Liechtenstein, Gibraltar and the Cayman Islands, in property development in London.”
Aurium has been approached for comment.