Setting the Scene for the Cox - Knox Meeting

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The “Undisclosed Principal”

In another post I reveal the SBG deal in which powerful politically-connected figures make a lowball offer for Kingsland Estates Limited, of which Marjorie Knox is a shareholder. In time, the SBG deal goes away. The Knox family is dealing with lawyer, Clyde Turney. Mrs. Knox is still fighting for audited statements with full disclosure of land value. The information to calculate the fair market value of her shares is withheld from her.

Clyde Turney claims to represent an undisclosed principal of R. G. Mandeville & Co. - This undisclosed principal is a mysterious buyer without a name. (Later it is discovered that the deal is similar to the SBG effort, with some parts of the contract copied verbatim!) The big difference is that now Mrs. Knox DOES NOT KNOW who is behind the offer. The directors strongly recommend that the shareholders accept another lowball offer, with the difference that this one is from an unknown entity! All of the shareholders except Iain Deane and Marjorie Knox have already signed an agreement to sell, but Turney is anxious to get everyone’s approval.

Iain Deane Refuses to Sign but later Succumbs to Pressure

Iain Deane is outraged at the paucity of the Classic offer. He comes to Bannatyne and complains bitterly to me and others in person. He truculently states his intention to fight the sale. At the time, Iain Deane’s calculations show the wholesale value of the land to be worth at least $75 million. He wants $6 million for his shares - this is more than six times what the undisclosed principal is offering.

Cox applies pressure first to Mrs. Knox, and then to Iain Deane. (Iain folds and subsequently emphatically lectures the Knox family that it is impossible to fight as there are powerful people involved. Ironically, it appears that Iain has changed his tune and is now a Classic cheerleader!)

Sir Henry Forde and Clyde Turney set up “without prejudice” meeting

Clyde Turney contacts Knox’s lawyer, Sir Henry Forde. Turney and Forde set up a “without prejudice” meeting between Turney’s client and two of Mrs. Knox’s children at her residence, Bannatyne, Christ Church. The legal term “without prejudice” stipulates that the meeting is not to be used as evidence in court. (Cox and his lawyer later violate this agreement, forcing a response.)

Much to the surprise of the Knoxes, Sir Henry Forde prudently recommends they tape the meeting. Luckily, they comply with his advice.

(The transcript of the recording of the meeting can now be read in my next post.)

Up to this point, the Knoxes do not know with whom they are meeting! They have no idea it is Richard Cox!



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