L&G fails in Olympia development loss of opportunity case

US real estate investment firm Bugsby Property has won a court battle against Legal & General’s property investment arm over its unsuccessful bid for event space Olympia, W14. In a High Court ruling, judge Robin Knowles ruled Legal & General must pay Bugsby £14,980,000 in damages. Olympia was bought in 2017 by a consortium put together by British investment firm Yoo Capital, with former owner Capco rejecting a bid from Bugsby and a Chinese firm. It is currently undergoing redevelopment. According to court papers, Legal & General’s property investment unit LGIM helped arrange finance for the successful bid. However, Bugsby said it had previously approached LGIM to help finance a bid for Olympia, and they had signed an exclusivity and confidentiality agreement. Litigation followed and Bugsby sued LGIM for as much as £214m for damages caused by “loss of chance”. At trial, L&G accepted it “inadvertently” broken parts of the confidentiality agreement, but agued that Bugsby wasn’t entitled to the damages it was seeking. It argued that its breach of the agreement didn’t cause Bugsby a loss because Capco would still have sold Olympia to the Yoo consortium. L&G said Yoo’s bid was “by far the more reputable, reliable and desirable counterparty from Capco’s perspective and its bid would have appeared to Capco to be more likely to complete and do so quickly”. Even so, in his ruling the judge said L&G had enough initial confidence in Bugsby’s bid to enter into a confidentiality agreement. And Bugsby was motivated to succeed. “On the balance of probability, Bugsby would have done all that was required of it to the end of achieving finance for its bid,” he said. “In my judgment there was a real and substantial chance that Bugsby would have been able to finance its bid. “When it comes to quantification, I would evaluate the chance of Bugsby being able to finance its bid as a near certainty.” Even so, he disagreed with Bugsby’s allegation that, without funding from L&G, the Yoo bid would have failed. He said Yoo would have managed to get financing elsewhere. The judge found that Bugsby was entitled to 35% of the value of opportunities it lost through missing out on the deal and made a detailed evaluation of all the lost opportunities over the life of the project. “My evaluation totals £14,980,000, again acknowledging – despite the specificity of the figure – that this cannot be a precise exercise,” he ruled. He finished his ruling by stating his admiration for the Olympia site. “I am very grateful to Counsel and to the legal and expert teams on both sides for their valued assistance,” he said. “There were a number of references, from many quarters, to what a unique, impressive and interesting asset Olympia is and can be. It was a privilege to try a case about it.” Bugsby Property LLC (a Company Incorporated Under the Laws of Delaware) v (1) LGIM Commercial Lending Limited (2) Legal & General Assurance Society Limited QBD (Mr Justice Robin Knowles) 27 July 2022 Image © Penelope Barritt/Shutterstock