ESO Capital Luxembourg Holdings II SARL v GSA Invest Management SA & Ors

ESO Capital Luxembourg Holdings II SARL v GSA Invest Management SA & Ors

The appropriate valuation of ESO's 30% shareholding in Promoroche SA as at 10 October 2012 is based on a DCF analysis, not a real estate basis, as there was no reliable evidence of market demand for a condo-hotel conversion. The Hotel's market value is CHF 27.5 million, with adjustments for transaction costs, directors' fees, and legal provisions, but no adjustment for further connected indebtedness. ESO is entitled to damages of CHF 1,879,833, representing 30% of the adjusted company value.

Parties
Claimant: ESO Capital Luxembourg Holdings II SARL; First Defendant: GSA Invest Management SA; Second Defendant: Emmanuel Aim; Third Defendant: Alain Schibl; Fourth Defendant: Henry Gabay; Fifth Defendant: Promoroche SA
Jurisdiction
England and Wales
Judgment Date
12 June 2017
Procedural Posture
Commercial / Final Judgment
Outcome
Judgment for the Claimant
Legal Topics
Breach of Contract, Damages, Shareholder Rights, Valuation of Assets, Implied Terms, Directors' Duties
Contract Law Commercial Law Breach of Contract Damages Shareholder Rights Valuation of Assets Implied Terms Directors' Duties

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Parties

ESO Capital Luxembourg Holdings II SARL

Claimant

GSA Invest Management SA

First Defendant

Emmanuel Aim

Second Defendant

Alain Schibl

Third Defendant

Henry Gabay

Fourth Defendant

Promoroche SA

Fifth Defendant

Procedural Posture

Commercial / Final Judgment

Legal Issues

  1. 1 What is the correct valuation of ESO's 30% shareholding in Promoroche SA as at 10 October 2012?
  2. 2 Should damages be calculated on a real estate or discounted cash flow (DCF) basis?
  3. 3 Are adjustments required for connected indebtedness, directors' fees, legal provisions, and transaction costs under the Settlement Agreement?

Ratio Decidendi

The appropriate valuation of ESO's 30% shareholding in Promoroche SA as at 10 October 2012 is based on a DCF analysis, not a real estate basis, as there was no reliable evidence of market demand for a condo-hotel conversion. The Hotel's market value is CHF 27.5 million, with adjustments for transaction costs, directors' fees, and legal provisions, but no adjustment for further connected indebtedness. ESO is entitled to damages of CHF 1,879,833, representing 30% of the adjusted company value.

Court Disposition

Judgment for the Claimant

Orders

  • ESO Capital Luxembourg Holdings II SARL is awarded damages of CHF 1,879,833 against the Defendants for breach of contract.
  • Further submissions to be heard on interest and costs if not agreed.