Wetherspoon warns against double-dealing property agents
JD Wetherspoon chairman Tim Martin has warned the hospitality industry to keep a close eye on property agents, after winning a High Court action against the pub group's former property adviser Van de Berg (VdB).
The High Court yesterday ruled that VdB and its managing director Christian Braun had breached their fiduciary duty to Wetherspoon by concealing the fact that freeholds on new pubs were available and advising it to take leases on the properties instead.
VdB then secretly arranged for the freeholds to be sold to other clients and associates at a large profit, once Wetherspoon had committed to taking the lease.
The agent advised Wetherspoon in the opening of around 600 new outlets between 1989 and 2005 and received some £14m in fees before its contract was abruptly terminated.
Wetherspoon submitted 12 examples of VdB's double-dealing to the court, which it said cumulatively added some £5.5m to its property costs.
The judge ordered Van de Berg to pay 80% of the £5.5m claimed by Wetherspoon into court by 22 April and also to pay 80% of £2.8m in legal costs by the same date.
Speaking to Caterersearch after the verdict was delivered, Martin issued some advice to operators when dealing with property agents.
"First, you must get them to confirm in writing that they have no interest in any property company connected with the landlord or the vendor," he said.
"Two, ask them to list their property holdings. Agents should be obliged to list the properties in which they have an interest."
Martin admitted that he had "felt sick" when he discovered the irregularities in 2005 and added: "We had to go to extraordinary lengths to set matters straight."
Wetherspoon wins fraud case against property agent >>
Wetherspoon in multimillion claim over property deals >>
Property agent launches counter-claim against JD Wetherspoon >>
Wetherspoon snapping up failed pubs to fuel expansion >>
By Mark Jansen
E-mail your comments to Chris Druce here.
Caterersearch.com jobs
Looking for a new job? Find your next pub job here with Caterersearch.com jobs
|
