Sports Direct has won a High Court claim over disputed shares in its rivals.
The sports specialist controlled by Mike Ashley took a £53m hit when it had to write off stakes in blacks” class=”intextlink”>Blacks Leisure and JD Sports Fashion which were lost when the Iceland banking system collapsed in 2008.
Yesterday the High Court ruled that Sports Direct had bought the shares in question from Kaupthing Singer & Friedlander (KSF), a subsidiary of Icelandic bank Kaupthing, before it collapsed.
The dispute between KSF’s liquidators Ernst & Young and Sports Direct had arisen as the shares had originally been pledged as security against a loan from a subsidiary of Kaupthing. KSF had refused to hand over the shares without first receiving cash for the loan. Sports Direct did not want to hand over cash before receiving the shares.
An agreement was later made to sell the shares, by which time their value had risen. The legal aspect of the dispute was whether Sports Direct should pay the difference in shares from when it first tried to buy them and the date they agreed to sell them.
Justice Lewison wrote ruled: “I hold that [Sports Direct] did acquire a proprietary interest in the shares before KSA entered administration.”
Sports Direct bought back its 29% stake in Blacks and went on to make an unsuccessful bid for the outdoor retailer.