Failure to advise properly on allocation of sale proceeds was negligent

In Richards and another v Speechly Bircham LLP and another [2022] EWHC 935 (Comm) the High Court found that a firm of solicitors had failed to properly advise two managers on a private equity-backed transaction about the impact on them of provisions relating to the allocation of sale proceeds.

The facts

In December 2014 the two managers sold their shares in a company to a private-equity backed newco. The managers each acquired a 30% holding of C shares in the newco and became the CEO and sales director.