Tom Hunter in court
Newly-knighted Scottish venture capitalist Tom Hunter will be accused of acting in bad faith in the High Court this morning by his former partners in the Gadget Shop, highly-successful UBS trader John Woods and Freeserve founder Peter Wilkinson.
Hunter and his sidekick Chris Gorman could end up paying out as much as £150m in damages if the case is successful. The court case will feature some of the City’s most colourful characters and could be embarrassing for Hunter, a major Labour party donor.
Hunter and Gorman are expected to be cross-examined by Woods’ heavyweight QC Michael Crystal later this week on whether they breached the duties of good faith they owed to their fellow owners. The pair have hired their Lord Grabiner QC — Britain’s most highly paid lawyer — to defend them.
The case relates to a spat over the ownership of greetings card chain Birthdays, which the Gadget Shop considered buying earlier this year.
The Gadget Shop was put into administration in April of this year when a deal to sell it to the Game group fell through.
Meanwhile, Gadget’s owners were bogged down in a separate argument over Birthdays. Wilkinson and Wood claim that Gadget Shop had agreed to buy Birthdays, but instead Hunter and Gorman bought it privately.
The pair later sold Birthdays to Clinton Cards at a loss, but Wilkinson and Wood believe that had the original sale to Gadget Shop gone ahead, the combined group would have been worth between £200m and £300m. Hunter and Gorman are expected to vigorously contest the claims.