Fund giant wins £10.4m legal claim against co-founder 

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Marathon Asset Management has won a four-year legal battle against co-founder Jeremy Hosking, winning a £10.4 million claim against him for breach of ‘contractual and fiduciary duties’.

Marathon, which runs $50 billion (£39 billion) in institutional mandates, has been in dispute with Hosking since he gave notice of his intention to retire in 2012, over his attempt to recruit company employees for a new venture.

Following private arbitration, Hosking had earlier paid Marathon £1.38 million in damages, after three staff members dubbed ‘the global three’ left as a result of his actions.

He was also ordered to pay back £10.4 million – half of the profits Hosking received for the period between mid-July and mid-December 2012 – in 2015. That was subject to an appeal, which has now been dismissed.

In the original decision, the arbitrator had concluded that the profit share of a partner or LLP member could be subject to forfeiture because it could be viewed as remuneration.

Hosking co-founded Marathon in 1986 with Neil Ostrer and William Arah. Following his departure he founded Dublin-listed asset manager Hosking & Co.

Herbert Smith Freehills, the firm that represented Marathon, commented: ‘We and the counsel team are delighted with today’s judgment, which was clearly the right result. The principle of forfeiture can and plainly should potentially apply to partners or members of an LLP as it does to other fiduciaries.

‘The arbitrator found that Mr Hosking acted in deliberate breach of his fiduciary duties and in light of the specific terms of the LLP Deed in this case it was just and proportionate for part of his remuneration to be forfeit.

‘The judgment is also helpful in reinforcing the strong bias in favour of finality in the context of disputes resolved by arbitration. Appeals should only be permitted in very limited circumstances for good reason.’

Source: Wealth Manager

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