Davdell Dispute Overview
Preamble:
Nick (Davdell) was making a low % profit and sought a group to manage the premises.
Red & Blue (Chris & Zam) was known to Nick since 2004, 7 years.
Nick was also aware the Red & Blue ran the Fridge Brixton (for well over a year) and had skills in much larger venues).
Nick was also aware Michelle had a great in numbers following and hence adding events would be significant our profitability.
Nick approached Red & Blue to take out a "Management Agreement" (MG) and not a sub-lease as he knew that would 'technically' be in breach of any possible Network Rail intervention even though every club under Network Rail runs operations under a different company. Nick did exactly the same thing when he was running the venue in all of the past times.
In order to make it a Management deal (shared occupancy) he retained a physical presence in the form the ATM, retained keys and un-vetted access to the venue.
Businesses Rational:
Why did we enter into the deal?
As Nick only had 2 to 3 events per week we were confident that we could double that number using our reputation. The club is small but it is run down (all drop fridges broken, Q-Bar removed from VIP bar, electricity crossed, ancient DJ equipment, and air ventilation working in reverse). However we saw potential in that it is located very near to Vauxhall Tube/National Rail station (one of the busiest commuter exchanges) and that in 2012 the USA Embassy will start building a new Embassy within easy walking distance and hence opening up greatly more opportunities for events and hence more profits. (E.g. nightly bars with food or pole dancing events etc.)
With this business model in mind, we decided to pay the premium of ã25k in cash to Nick as he insisted. The first ã10k was in the form of loan which would not be paid back if the deal is not to go back (i.e. the deposit to secure the deal).
The second ã15k he insisted again to be paid in cash and this was done at the club on the first day on 16/10/2010 and we have receipt signed by his wife Kelly.
Background to Dispute:
Nick got an offer from Craig (owner of most night clubs in Vauxhall) to buy the venue. Nick tried to force us to but at ã300k demanding payment in cash within 48hrs (see text messages transcript). It amounted to harassment. After repeated attempts Nick refused to give IDFC any proof of offer or who or value. Our view is the venue is not worth ã300k.
Later we learnt that Fire was being shut down by the Police for 6 weeks from 2/11/2011 and he needs a second venue. Later we also learnt that Nick was offering the venue for sale to Union (next door) at only ã200k. ã200k sounds a much reasonable number.
If Nick would have been open and honest with IDFC showing proof and offering a commercially viable sale price we would not be in this position.
Craig now has exclusive access to the venue and running events. We believe he is in the process of buying Davdell.
So, in our opinion, Nick gave out to short term greed.
Dispute:
Nick used an unenforceable clause in the MG to terminate the agreement and lock IDFC out of the venue on 2/11/2011 the day Fire shut down.
He falsely claims he "got a call a 'phone call' from Network Rail". It is highly unlikely that Network Rail would not make a phone call about this. It should be in writing. Nick to date has refused to give proper details.
Even if Network Rail did this (unlikely), we could demonstrate that this is not a sub-lease rather a MG and hence we are not in breach.
Further to this, the timeline of alleged phone call which was received from Network Rail, which was past midnight on 2/11/2011, and the date of publication of new events in QX magazine which was published on the same day. This alone prove the pre-planned pre-emptive strike on IDFC was in motion well before 2/11/2011 as it takes normally a week to book advertising, creating artwork and to fit in the editorial interview.
Hence by logic, Nick is falsifying the truth.
In the process of Nick locking IDFC out, Nick authorised Craig to remove all stock, production gear, and belongings to Fire.
Craig/Nick allowed our equipment to be held within weather elements and hence damaged by rain.
All of this resulted in IDFC incurring storage charges. The norm would have been Nick pay for all stock in the venue IDFC given the courtesy of removing our own equipment.
As IDFC has built the business by doubling the number of events and looking forward to the US embassy and utilising Vauxhall major transport system, we are over the next 10 years loosing significant profits that could have been made given the above.
Our float was diminished by ã980 out of a secured safe, (stolen).
Further 4 par cans missing and all 28 power cables, 28 DMX cables and other equipment as in the list already provided to our solicitor to Nick via Fire.
Facts on the ground:
We paid a high premium (ã25 in cash) for 10 years (5+5)
Plus we are paying a high monthly rent premium (ã1100/weekly, ã289k/5 years, ã578k 10 years)
Nick built the agreement to be shared occupancy (retaining ATM and access).
Network Rail would not have called Nick at a strange hour.
Nick would have provided details as this happens in real time and work with us to rectify.
Nick has failed to give us any evidence.
The exit clause being used is unenforceable.
Nick has continued to be belligerent on all correspondence.
Nick cancelled our major event 2 weeks prior to take over, showing again, pre planning of lockout.
Nick removed our equipment and production gear and allowed it to be exposed to the elements
Due to the magazine advertising, this is all premeditated.
Nick failed to provide IDFC with any evidence of offer of purchase to this date.
Craig is advertising events being held at the venue well into January.
IDFC believes that Craig is in the process of buying Davdell as a vehicle to obtain the lease bypassing the covenant.
Nick lied about Network Rail due to proof not providing detail information.
Nick failed to provide proof of purchase offer allowing MG agreement pre-emption
Nick was harassing unreasonably for cash (probably under table)
Nick stated that he is good at money laundering at a meeting on Borehamwood, Holiday Inn express hotel.
[Not confirmed fact] IDFC believes through industry rumours that Nick has failed to agree Network Rail lease rent increases and Network Rail is now seeking to find the true operators
IDFC spent approximately ã26k on maintenance to repair the club.
IDFC loss potentially ã2.271m over the next 10 years (not including inflation, or adding extra events or counting for natural increase in business)
Nick has been libellous against IDFC
Nick has not responded to any of our correspondent indicating lack of interest due to possible sale of Davdell to Craig in progress.
Latest magazine indicating Craig occupancy well into January.
[Not confirmed fact] IDFC believes through industry rumours that are Nick is selling Davdell to Craig hence by passing our covenant on the lease.
Strategy/Goals/Exit:
Warning: Nick will be intransigent / belligerent and talk a lot, so hence we want, without a lot of "hot air", is:
Buy the venue at right price discounted by our damages claim
Regain entry and make Craig pay rent to IDFC and again the bar takings
Induct to gain control as a spoiler to Craig and Nick
Put Davdell into liquidation and gain property rights
Claim full damages in addition to above
Bring criminal fraud charges against Mark (director and brother to Nick) and to Nick as acting as a shadow director to Davdell.