The High Court has ordered both sides to disclose specified documents in a dispute over the distribution of proceeds from the 2017 sale of a Munich property. The ruling addresses contested discovery applications only; the validity and enforceability of the disputed agreement remain for trial.
Munich 1 Property Fund GmbH owned a building leased to BMW. It was sold in May 2017 for €41.7 million. After repayment of a secured loan, €7.95 million remained before sale costs and tax.
The plaintiff says an agreement made with Gemside Limited on 5 May 2017 settled Gemside’s claims. Under its terms, the plaintiff was to pay Gemside €1.4 million, assign a debt balance of about €6.415 million to the plaintiff’s managing directors for €1, and transfer its shares in the plaintiff to them. The plaintiff says it paid €1.135 million and is ready to pay the remaining €265,000 when the required assignment and share-transfer documents are executed.
Gemside disputes the agreement’s validity and effect. It says it was induced to sign by representations that €1.4 million was its full entitlement and that participants were treated equally. It claims it would have received more under a 2011 participation agreement, seeks an accounting and other relief, and alleges that the 2017 agreement benefited the plaintiff’s managing directors to its detriment. The plaintiff denies those allegations and says the 2017 arrangement implemented an agreed, tax-efficient distribution. These competing claims have not been decided.
Justice Quinn considered Gemside’s request for discovery in 14 categories and the plaintiff’s request in one category. He refused broad requests for the plaintiff’s books and records over six years, its expenses over that period, and all documents concerning the sale. Instead, he ordered discovery of documents recording or evidencing the sale transaction, along with documents identified in an affidavit; the plaintiff’s 2017 accounts and all Cushman & Wakefield reports relating to the property; and specified legal, accounting or tax advice received up to and including 5 May 2017 concerning distribution of the sale proceeds and execution of the agreement.
The court also ordered records of managing-director remuneration and member approval for 2012–2017, and documents recording or evidencing secured debt owed by the plaintiff to its members, including the security documents. It refused a request for documents about invitations to potential investors, finding no pleading that any such invitations had been issued, and rejected a general request for any additional trial documents.
The plaintiff’s separate request was granted: Gemside must disclose documents recording or evidencing money it provided by loan or otherwise to the plaintiff or Munich 2 Property Fund GmbH. The court said those records could be relevant if the plaintiff’s claim for specific performance fails and the counterclaim is considered under the earlier participation agreement. No final determination of the parties’ underlying claims was made in this judgment.