The former directors of Media Square – who now run MSQ Partners – have had a £263,933 compensation claim thrown out against Porta Communications and chief executive David Wright, who they blame for triggering the collapse of the marketing services group.
MSQ was formed in December 2011 following an £11m buyout of Media Square’s companies, including CMW, The Gate and Twentysix, after it was refused financial assistance by the bank on debts of around £26m.
This deal was itself slated by former Willott Kingston Smith boss Bob Willott who called for a change in the law to prevent former directors from buying back a defunct company.
But legal proceedings had already been brought against Porta and Wright for a total of £760,000, claiming that he led “an unlawful conspiracy” to back the acquisition of all or part of the Media Square Group. The £263,933 claim was the largest of a number of separate actions.
The claim stems back to October 2009 when shareholders within Media Square requisitioned a General Meeting to get Wright appointed as a director and chief executive of the group. The requisition however was withdrawn in March 2010.
Yet the other directors claimed the move had caused “disruption to Media Square’s advertising division”.
In a statement released at the time it said: “This disruption and the provision for a bad debt of approximately £100,000, resulting from the administration of MF Global (a client in New York), are likely to mean that the Group will not now meet its profit expectations for the year ending 29 February 2012 and that profit will be below the level reported for the prior year.”
Following this week’s judgment, Porta continued to refute the claims by Media Square and other claimants around a conspiracy against Media Square. Wright (pictured) commented: “We are obviously delighted by the findings, and believe that our stance has been completely vindicated as a result. We will continue to contest vigorously any action the claimants may wish to continue with.”
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