^{"If your name's not on the list, you're not coming in."}

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The acrimonious break-up of the RBG law group and its ousted CEO, Nicola Foulston, plumbed new depths last week when Foulston showed up at the company's AGM and was barred from taking part.

Foulston is suing RBG, which includes Rosenblatts and Memery Crystal, for wrongfully dismissing her in January from her £445k-a-year job, to which the listed company has responded by counterclaiming against her.

Foulston, previously the chief executive of Brands Hatch, joined the firm at the behest of RBG founder Ian Rosenblatt to shepherd the group through its IPO. But, she alleges, he subsequently “orchestrated” her removal behind the scenes as a “shadow director”.

Foulston is seeking approximately £1 million in damages from RBG, comprising the equivalent of one year's pay on notice, a £20k pay rise, a bonus equivalent to 100% of her salary, and additional damages and interest.

According to her claim, Foulston was summarily dismissed during a meeting with RBG’s non-executive chairman, Keith Hamill, in which he invited her to “resign and leave”.

Foulston alleges that she replied, “No chance why should I? What have I done wrong?” to which Hamill allegedly responded, “Nothing. There is no mismanagement of the business”, and explained that Rosenblatt “had decided to dismiss her”.

Rosenblatt took umbrage at Foulston’s contention that he was a 'shadow director' responsible for her defenestration, telling RollOnFriday that while he was the company’s largest individual shareholder and therefore “unbelievably irritated and annoyed with the state of the share price and the drama that’s been created”, he had not been involved in the management of the business for several years.

RBG also rejected Foulston’s “gratuitous” allegation about Rosenblatt in its defence, and laid out several justifications for Foulston's summary dismissal.

The company claimed that its ex-CEO "engaged in unacceptable conduct which evidenced a closed-mindedness and intolerance to diversity and inclusion and a discriminatory attitude on grounds of race", which included overlooking an unidentified individual for promotion.

Foulston previously conceded that she used a racial slur at a firm dinner, for which she was publicly reprimanded by Rosenblatt.

RBG's defence and counterclaim alleged that Foulston also breached her fiduciary and director’s duties by placing herself “in positions of unauthorised conflict, preferring her personal financial interests” over her duties to RBG.

That involved misleading RBG’s remuneration committee over Robert Parker, who was RBG’s Chief Financial Officer for three years until he agreed to resign in December 2022, claimed RBG.

RBG alleged that Foulston erroneously represented that Parker was owed £300,000 under his contract, payable to a company, Velocity Venture Capital, of which she was a director and a shareholder. It alleged that Foulston did not disclose "the full nature or extent of the proposed arrangements involving [Velocity] and Mr. Parker and, accordingly, of her interest in the transaction".

It also claimed that at Foulston’s direction, Parker wrote off £73,630 in fees generated by RBG fee-earners who had been working on an intellectual property dispute for Velocity. RBG is now suing to recoup the sum.

Foulston's actions “gave rise to a clear (and not just potential) conflict of duty and interest” between her duties to RBG, “including to minimise write-offs”, and “her personal interest in the write-off of fees payable by VVC [Velocity], by which VVC and (indirectly) she would financially benefit”, RBG said.

A spokesperson for Foulston told RollOnFriday that RBG had reneged on its agreement to retain Parker as a consultant “via Ms Foulston’s company”, Velocity, which is suing RBG for £300k in a separate case.

He added that Foulston was sacked in breach of her contract following "a period where she had presided over growth", and that RBG’s defence was "largely technical and will turn on legal argument which is deployed to seek to retrospectively justify the inadequate basis upon which she was dismissed".

In the background, Foulston’s solicitors wrote to RBG’s lawyers at Herbert Smith Freehills in April offering to settle Velocity’s claim in return for approximately £350,000, and Foulston’s claim in return for approximately £95,000.

In case any readers are still unsure just how much bad blood is swilling between the parties, when Foulston turned up to RBG’s AGM last Friday she was prevented from taking part.

Foulston's spokesperson told ROF that "she attended the recent AGM but was not permitted access, despite the board having discretion to do so, because she was not the legal holder of the shares she has an indirect interest in". 

He said that as a "significant indirect shareholder of RBG", Foulston went to the AGM "to ensure that the good governance arrangements she put in place continue after her departure" and that RBG "continues to be managed in a manner which will generate value for shareholders".

Despite being denied entry, "She intends to continue to play an active role as a shareholder and in particular to scrutinise the board’s approach to remuneration of partners and consultant Ian Rosenblatt. She considers it critical that shareholders have transparency about those arrangements and that they represent appropriate value for shareholders", he added.

RBG's (award-winning) spokesperson told ROF, “She did come, but did not have the correct documentation required by the registrar to allow her to take part in the formal meeting”. 

Meanwhile, the CIO of an institutional shareholder which appears sympathetic to Foulston, LBV Asset Management, wrote to RBG’s board after the AGM to “express my dissatisfaction with the value destruction you have presided over, as witnessed by our share price performance since the beginning of the year”. 

In the letter seen by ROF, Emmanuel De Figueiredo complained that LBV had “put forward 2 ex-CEO’s of bigger AIM listed companies which were taken private, yet they have not been contacted to this date…I was left with the impression that you will not consult with institutional shareholders and the focus seems to be on finding people that, above all, would fit in with the rest of the Board”. When all this fun is possible, why wouldn’t a law firm float?

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