Maria Mulla successfully defends £1.3 million claim in the Mercantile Court

Fri, 27 Jul 2018

Successful media entrepreneur Howard Kruger has fought off a £1.3m claim from former fellow director Dennis Lloyd.

Maria Mulla of No5 Barristers’ Chambers, and Bruce Drummond of New Bailey Chambers, represented Mr Kruger in a six-day trial in the Mercantile Court.

Mr Lloyd sued Mr Kruger for roughly £1.3m comprising £250,000 lost investment, and £157,000 per annum in lost earnings from 2011 until the date of judgment.

Mr Lloyd’s claim was in the tort of deceit.

On the June 1, 2009 a deal was concluded to transfer the assets of a number of media organisations into a new company Pegasus Entertainment Holdings Limited (“PEHL”), later renamed Elm Street Media Group (“ESMG”).

Mr Lloyd was the Managing Director of Pegasus Entertainment, a division of Eagle Rock Entertainment PLC. Pegasus was sold by Eagle Rock to PEHL. Mr Lloyd invested £250,000 and continued in post.

Mr Kruger was the Principal of Elm Street Media and represented both Elm Street and a number of companies in the TKO Group. TKO was a supplier of music rights and catalogue and had a well respected music, film, and DVD catalogue. Elm Street was concerned with rights ownership/access and exploitation in the area of proprietary/non proprietary music catalogue and music publishing.  The assets of some but not all of these companies were sold to PEHL.

Mr Lloyd claimed he was induced into working for and investing in PEHL by reason of direct and indirect fraudulent misrepresentations made by Mr Kruger, in particular as to the quantity and quality of the audio and audio-visual assets that were supplied under the deal.

The Court heard expert evidence from both parties on whether the formats on which the audio and audio visual works were delivered by the Kruger Companies as part of the deal were suitable for use as master sources, and what as a industry practice would be regarded as ‘largely unexploited.’

In his judgment handed down today, Lionel Persey QC held that the Claimant’s claim in the tort of deceit was not made out and that the claim was statute barred in any event.  

After the trial had concluded Mr Lloyd also sought to challenge the authenticity of documents that had been disclosed by Mr Kruger and provided within the trial bundle.

This application was promptly rejected by the Judge in accordance with CPR 32.19 applying CPR 3.9 and the test in Denton v TH White [2014] 1 WLR 3926,

Maria and Bruce were instructed by Richard Slade and Co.

Maria and Bruce say that this was an interesting and significant case in relation to the tort of deceit and limitation where serious allegations were raised.


Maria Mulla is a member of the Sports and Media Law group at No5. View her profile here:


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