Millbrook Healthcare Bidco Ltd v Paul Croll & Ors

Millbrook Healthcare Bidco Ltd v Paul Croll & Ors

The Sellers breached warranties in the SPA by failing to disclose the East Sussex Contract Variation Agreement and the waiver of the Somerset invoice, resulting in overstated accounts and management accounts. This led to an inflated purchase price based on an incorrect maintainable EBITDA. The correct measure of loss is the difference between the price paid and the price that would have been paid had the true position been known, less mitigation. The Claimant is entitled to damages of £1,709,000.

Parties
Claimant: Millbrook Healthcare Bidco Ltd (formerly Cairngorm Acquisitions 9 Bidco Limited); Defendant: Paul Croll; Defendant: Colin Croll; Defendant: Mark Croll
Jurisdiction
England and Wales
Judgment Date
13 February 2023
Procedural Posture
Commercial Claim (breach of Share Sale Agreement Warranties) / Final Judgment After Trial
Outcome
Claim allowed in part; judgment for the Claimant for £1,709,000.
Legal Topics
Breach of Warranty, Share Purchase Agreement, Damages Assessment, Mitigation of Loss, Disclosure Obligations
Commercial Law Contract Law Mergers and Acquisitions Breach of Warranty Share Purchase Agreement Damages Assessment Mitigation of Loss Disclosure Obligations

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Parties

Millbrook Healthcare Bidco Ltd (formerly Cairngorm Acquisitions 9 Bidco Limited)

Claimant

Paul Croll

Defendant

Colin Croll

Defendant

Mark Croll

Defendant

Procedural Posture

Commercial Claim (breach of Share Sale Agreement Warranties) / Final Judgment After Trial

Legal Issues

  1. 1 Whether the Sellers breached warranties in the SPA regarding the accuracy of accounts and management accounts
  2. 2 Whether the breaches caused loss to the Claimant and the quantum of such loss
  3. 3 Whether the Claimant failed to mitigate its loss or breached notification obligations under the SPA

Ratio Decidendi

The Sellers breached warranties in the SPA by failing to disclose the East Sussex Contract Variation Agreement and the waiver of the Somerset invoice, resulting in overstated accounts and management accounts. This led to an inflated purchase price based on an incorrect maintainable EBITDA. The correct measure of loss is the difference between the price paid and the price that would have been paid had the true position been known, less mitigation. The Claimant is entitled to damages of £1,709,000.

Court Disposition

Claim allowed in part; judgment for the Claimant for £1,709,000.

Orders

  • Sellers to pay the Claimant £1,709,000 in damages.