In a complex case, Tom Walkinshaw, managing director and a 45 percent shareholder of Arrows, is also to take action against Morgan Grenfell Private Equity (MGPE), which also owns 45 percent of Arrows and has a stake in Coral. Being a shareholder in both the Arrows and Coral gives the MGPE board seats at both companies.
Coral signed a two-year sponsorship contract with Arrows at the start of 2000, in a deal worth $15m (B16.7m). But the betting operator cut the contract early, which Arrows believes contravened the binding deal. Coral however claims it was within its right, exercising an exit clause. Walkinshaw is also alleging that MGPE had a hand in the contract’s breach.
Coral executives told the Financial Times newspaper: “This writ is a load of rubbish. The company has taken legal advice and we are convinced it's a water-tight legal case and will defend it in the courts.”
The case is the latest in a troubled past for MGPE, including managerial disputes, and a $360m (B401m) loss on the sale of its stake in SLEC, the F1 commercial holding, to EM.TV, the German media firm.
