A court has dismissed an appeal by Liontrust in a dispute with its former fund manager.
A judgement in March 2016 dismissed Eoghan Flanagan’s claim for damages but ordered Liontrust to make various payments the judge rules were contractually due to him, which the Appeal Court judges have ruled still stands.
The latest judgment also dismisses a cross-appeal by Mr Flanagan on whether he was still a member of Liontrust’s management committee when he was served notice by the group.
Mr Flanagan joined the group in late 2011 when Liontrust took over Occam Asset Management, which had been experiencing financial difficulties.
He had been chief investment officer and head of emerging markets at Occam, running the Occam Emerging Markets Absolute Return fund. Occam had five funds, and Mr Flanagan’s hedge fund accounted for 50 per cent of the group’s total assets under management, although performance had been struggling.
The court heard that Mr Flanagan had been unwilling to join Liontrust but eventually did so after various discussion about how his fund would be promoted in the future.
He joined on a basic salary of £125,000 a year, with bonuses linked to fund performance. According to his contract, he was entitled to remain a member of the firm for two years from the date he joined.
The fund’s assets under management continued to slide until it had just $12.3m (£9.4m) under management by August 2012, from a peak of $355m (£273m) in spring 2010.
Liontrust decided to close the fund because it was no longer viable, and gave Mr Flanagan notice of compulsory retirement and placed him on gardening leave.
The former fund manager disputed the validity of this notice, saying the notice period he was given was too long, and that he was entitled to damages for breach of contract. He also appealed against a second and third notice issued by the group, claiming they were also invalid.
He also accused Liontrust of failing to market the fund adequately, saying this was a reason why assets were so low.
