A Scottish businessman is preparing one of the biggest lawsuits in UK legal history amid claims he lost about £174 million over the sale of his company.
Bob Kidd, a former amateur boxing champion who grew up in a council estate in Aberdeen, believes he was unfairly treated after he sold a chunk of his North Sea oil and gas firm International Tubular Services (ITS) to a private equity investor.
His company was later sold on, by which time it is claimed Kidd’s shareholding had become worthless.
The businessman, described as a “wheeler dealer” by a court, started the company, supplying tools and equipment, with £5,000 in 1986.
It experienced huge growth and had made profits in excess of £25m by 2011.
A complex sale transaction followed which Kidd claims eventually rendered his shares worth nothing.
A source close to the case said: “Bob just wants his children and grandchildren to be proud of what he achieved in business.
“He’s a working-class guy who started ITS with five grand in his pocket and grew it until it was making millions. He believes he has a very strong case and will pursue it as far as it takes.”
The Sunday Post understands a summary of a potential claim was sent to each of 11 prospective defendants at the end of last month.
They include Lime Rock – the investment firm that bought ITS – and its sections based in the Caymen Islands, the UK and US.
Jason Smith, of Aberdeen, who worked for Lime Rock in its Aberdeen office for seven years, is also included.
Lime Rock co-founder John Reynolds, of Connecticut, US, and former Lime Rock accountant Hamish Lawrence Ross of Banchory, are also among potential defendants.
Also named are Rod Hutchison, of Aberdeen solicitors Ledingham Chalmers, who it’s claimed had involvement in the sale of ITS, and Malcolm Laing, who was with the law firm and is now retired.
Ledingham Chalmers is itself also facing possible action. The firm denies any wrongdoing.
Former ITS chief executive Jeff Corray, of Cults, and former ITS director Scott Milne, of Aberdeen, may also face action.
Each of those claimed to be involved has until August 28 to respond or it is understood court proceedings will begin.
Kidd is being represented by international law firm Kobre and Kim, who have an office in London, and proceedings are likely to go through civil courts in London.
A previous court judgment in 2016, described Kidd as a “wheeler dealer” and a “very successful businessman who grew his enterprises from humble beginnings to a turnover exceeding many millions of pounds”.
He was ITS chief executive until 2007, when Jeff Corray succeeded him and Kidd became chairman. He owned all of ITS prior to the deal in which he sold a third of his shares.
He claims it left his own shareholding worthless as he effectively surrendered control to Lime Rock who were able to determine company strategy.
It’s also claimed the deal prevented him appointing other directors, removed his casting vote and that, even though he was the majority shareholder on paper, Lime Rock shares carried more rights than his.
He believes individuals and companies involved in the sale were affected by a conflict of interests and breached their duties.
The prospective lawsuit alleges he lost the entire value of his shareholding in ITS, a loss of at least £174m with one firm of investment bankers valuing ITS at up to £490m in 2008.
It is claimed the deal Kidd “inadvertently signed up to” also gave Lime Rock the power to take control of the company and force its sale.
In 2013, ITS was placed in administration and was subsequently bought by Texas-based Parker Drilling with no return for any shareholder.
Jennifer Young, Ledingham Chalmers’ chairman and partner, said last week: “Given we have received intimation of a claim from Robert Kidd’s lawyers, it would be inappropriate to comment further other than to say the firm holds itself to the highest of ethical and professional standards, and we believe these allegations are unfounded.”
Lawrence Ross said he was aware of the matter but did not wish to comment. No one at Lime Rock was available for comment. No other individuals named in the claims responded to our request for comment.
ITS handed over more than £170,000 to Scottish prosecutors in 2014 after admitting paying bribes in Kazakhstan. The payments are understood to have been made by a former employee to secure work from a customer.
The £172,000 paid represented profit made under the deal and was given to the Scottish Consolidated Fund.
Businessman claims of illegal charges over company sale
Businessman Bob Kidd is suing his former lawyers for £3 million in a case related to the fallout from the sale of his firm, ITS.
Kidd launched a case against blue-chip law firm Levy & McRae and the advocate they used to represent him, Jonathan Brown, over claims the fees they charged him were “illegal”.
He and his firm, A&E Investments Inc, are seeking £2,925,000 in the case at the Court of Session in Edinburgh.
Glasgow-based Levy & McRae count former First Minister Alex Salmond among their clients.
Leading advocate Brown acted for Charles Green in a case against Rangers over legal fees.
The row relates to court action Kidd took against his previous lawyers, Paull and Williamsons, over the sale of his stake in ITS.
Kidd hired Levy & McRae but the case was settled out of court for a “significant” undisclosed sum last year. However, he was dissatisfied with the amount Levy & McRae and Brown took from the settlement as their charges. Kidd agreed to pay Levy & McRae a fee for legal services based on their staff’s hourly rates. He also agreed to pay a very large “success fee” should he win the case.
Levy & McRae said last week they did not wish to comment. They said last year: “We consider the action raised to have no merit and it is being defended vigorously.”