Companies

Corbin & King fends off High Court challenge over debt repayment

The owner of London’s Wolseley restaurant has fought off a High Court challenge to a proposed £38mn rescue package, marking the latest round in a fierce battle for control of the upmarket restaurant group.

In an unusual hearing in London on Tuesday, a subsidiary of Thai hotel operator Minor International — Corbin & King’s biggest shareholder — attempted to block the restaurant group from repaying a debt to the Thai company after Minor sought to call it in.

Mr Justice Foxton said, however, he was “not persuaded” to grant the injunction and would set out his reasoning in a ruling on Wednesday.

The judge’s decision comes after a bitter dispute between Corbin & King and Minor, which forced the group into administration in January, saying it faced “major liquidity constraints”.

Minor had called on Corbin & King to repay almost £34mn of loans within 24 hours after a long-running dispute during the pandemic came to a head. It subsequently appointed administrators.

The Thai group holds a 74 per cent stake in Corbin & King, which owns high-end London eateries including The Wolseley, The Delaunay and Brasserie Zédel — famed for being popular with celebrities, businessmen and politicians.

MI Squared, a subsidiary of Minor, had sought an injunction preventing co-founders and partners in the group, Jeremy King and Chris Corbin, from accepting financial backing from US investment fund Knighthead Capital Management to repay their largest investor, on the basis that it was a breach of their shareholder agreement.

King has been in talks with Knighthead for more than a year in an attempt to oust Minor from its ownership of the company following a series of disagreements over how the group should be run.

The court clash came days before the expiry of a legal moratorium protecting Corbin & King’s individual restaurants from insolvency.

Only the group itself is in administration. The administrator to Corbin & King, restructuring specialist FRP Advisory, has received as many as 30 expressions of interest for the entire business, according to lawyers involved in the case.

Fraser Campbell, the barrister representing MI Squared, accused Corbin & King of trying to “disrupt an orderly administration” by pursuing a deal “with a body . . . that has been perfectly plain that it wishes to support them in the battle for the company”.

Campbell said it was “entirely unclear . . . how this new transaction will actually have any effect on rescuing the companies or protecting the interests of creditors”. He added that Minor was “content” not to be repaid the debt.

In a witness statement, King said the landlords of The Wolseley and the group’s other restaurants could forfeit their leases if the moratorium were lifted. He said there was “no doubt in my mind or in the minds of the other C&K director that if the subsidiaries were — as Minor want — put into administration, this would be disastrous for all concerned”.

Barrister Nigel Dougherty, representing King, Corbin and Zuleika Fennell, the restaurant group’s managing director, said the terms of Knighthead’s loan were “manifestly better than the terms on which [Minor] has extended its debt”. 

According to King’s statement, Knighthead offered to buy Corbin & King’s assets for £45mn in February as well as offering a loan to refinance all debts including the sums owed to Minor, in order to avoid insolvency.

Doherty said Knighthead had “confidence” in King and Corbin and was “prepared to work with them” in an effort to “move forward successfully”. 

King declined to comment.

Marion Walsh-Hédouin, a vice-president at Minor, said the judgment “resolves nothing”, with the restaurant group replacing one secured creditor with another.

“As today’s evidence showed, Mr King accepts that Corbin & King is insolvent and in need of strong financial support to secure its future, something Minor International has always been prepared and repeatedly offered to provide,” she added.

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