David Victor Garofalo v David Crisp & Ors

David Victor Garofalo v David Crisp & Ors

There is a high degree of assurance and a strong prima facie case that Mr Crisp knowingly breached sanctions, concealed this from Mr Garofalo, and acted in breach of fiduciary and contractual duties, causing unfair prejudice. The existential reputational and legal risk to the companies justified the exceptional interim removal of Mr Crisp as director and change of management. Ex parte relief was necessary to prevent destruction or concealment of evidence and to secure effective remedies. The balance of convenience and risk of injustice favoured continuation of the injunctions.

Parties
Applicant/petitioner: David Victor Garofalo; First Respondent: David Crisp; Second Respondent: Yulia Crisp; Third Respondent: Valorem Holdings Limited; Fourth Respondent: Valorem Capital One Limited; Fifth Respondent: Valorem Distribution Limited; Sixth Respondent: Valorem Bespoke Limited; Seventh Respondent: CP Parfums Limited
Jurisdiction
England and Wales
Judgment Date
07 May 2024
Procedural Posture
Interim Application Ancillary to Unfair Prejudice Petition Under Companies Act 2006 S.994 / Return Date Hearing for Continuation of Ex Parte Injunction
Outcome
Interim injunctions (including removal of Mr Crisp as director and change of management) continued until trial or further order; ancillary orders adjourned to trial or further application; fortification of cross-undertaking to be considered.
Legal Topics
Unfair Prejudice, Director Removal, Interim Injunctions, Breach of Fiduciary Duty, Sanctions Compliance, Change of Management, Ancillary Relief
Company Law Insolvency Law Commercial Law Unfair Prejudice Director Removal Interim Injunctions Breach of Fiduciary Duty Sanctions Compliance +2 more

Case Brief

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Parties

David Victor Garofalo

Applicant/petitioner

David Crisp

First Respondent

Yulia Crisp

Second Respondent

Valorem Holdings Limited

Third Respondent

Valorem Capital One Limited

Fourth Respondent

Valorem Distribution Limited

Fifth Respondent

Valorem Bespoke Limited

Sixth Respondent

CP Parfums Limited

Seventh Respondent

Procedural Posture

Interim Application Ancillary to Unfair Prejudice Petition Under Companies Act 2006 S.994 / Return Date Hearing for Continuation of Ex Parte Injunction

Legal Issues

  1. 1 Whether Mr Crisp caused the companies to breach Russian sanctions and acted in breach of fiduciary and contractual duties
  2. 2 Whether the threshold for interim removal of a director and change of management is met
  3. 3 Whether ex parte (without notice) relief was justified

Ratio Decidendi

There is a high degree of assurance and a strong prima facie case that Mr Crisp knowingly breached sanctions, concealed this from Mr Garofalo, and acted in breach of fiduciary and contractual duties, causing unfair prejudice. The existential reputational and legal risk to the companies justified the exceptional interim removal of Mr Crisp as director and change of management. Ex parte relief was necessary to prevent destruction or concealment of evidence and to secure effective remedies. The balance of convenience and risk of injustice favoured continuation of the injunctions.

Court Disposition

Interim injunctions (including removal of Mr Crisp as director and change of management) continued until trial or further order; ancillary orders adjourned to trial or further application; fortification of cross-undertaking to be considered.

Orders

  • Change of management order: Mr Crisp removed as director, new directors appointed by Mr Garofalo to remain in place until trial or further order.
  • Ancillary orders (imaging, delivery up, passport) adjourned for consideration at trial or further application.