Embattled law firm owner RBG Holdings has issued a public attack on its largest shareholder, accusing him of ‘offensive behaviour unbecoming of a solicitor’.
In a statement to the London Stock Exchange, the company alleged that Ian Rosenblatt had breached the terms of his consultancy agreement and restrictive covenants through manoeuvres to set up a rival firm. The notice said Rosenblatt’s consultancy agreement had been terminated with immediate effect.
Rosenblatt issued a requisition notice at the end of last year demanding that three members of the RBG board be replaced.
Speaking to the Gazette today, Rosenblatt said the RBG statement was ‘one big lie’ and he denied any wrongdoing. In a formal response he also accused the directors of making defamatory statements in an 'attempt to damage my reputation'.
The latest public row hit the market capitalisation of RBG holdings, with shares on London's alternative investments market falling by one third.
RBG, which owns the law firms Rosenblatt and Memery Crystal, said in its statement that the board had become aware that Ian Rosenblatt had acquired 100% of the share of a company then known as AWH Acquisition Corp Corporate Limited, an SRA-regulated firm.
That deal was said to be concluded prior to 10 September but the notification was not filed until 20 December. Rosenblatt and Tania MacLeod – a director of RBG until resigning from the board in October – were appointed directors of AWH Acquisition Corp on 19 December. On the same day the company changed its name to Rosenblatt Law Limited.
MacLeod resigned from her employment with RBG earlier this month.
The RBG statement said both Rosenblatt and MacLeod are listed on the SRA website as regulated members of AWH Acquisition Corp Corporation (with Tania MacLeod listed as compliance officer for finance & administration (COFA) and legal practice (COLP)). The SRA's records have not yet been updated to reflect the current name.
The statement continued: ‘From the chronology of these events, it is evident that Ian Rosenblatt was in control as the owner of another company regulated by the SRA to provide legal services, at least three weeks before he first contacted the chair of RBG Holdings plc demanding a change of CEO in late September 2024.’
It was stated that the RBG board had written in September last year to inform Rosenblatt and MacLeod it would no longer provide litigation funding on the Winros litigation in which they were involved.
It was further outlined that the company had reached an agreement with Rosenblatt to extend his restrictive covenants when he joined the RBG board in July 2023.
Negotiations started at the end of last year about a three-year pay structure which would align with the terms of the covenants, but these talks stalled over what RBG called ‘excessive expenses demands from Mr Rosenblatt’. These allegedly included a private office suite to be fully funded and a renewed demand for the Winros litigation to be funded by the company.
The RBG statement added: ‘In light of the evidence set out above that, well before any public demands for change or any initial negotiations around remuneration were made, Ian Rosenblatt was already the sole owner of another law firm, these negotiations would seem to have been in bad faith.’
In a further accusation, RBG said that Rosenblatt had been ‘verbally abusive’ to the firm's lender at a meeting in November 2023. This information was communicated to management only last month, when it was said that the lender had cited ‘egregiously foul and offensive language used’.
Rosenblatt said that, while he could not respond to an unspecified 'perjorative description of my language', the tone had been set by the 'offensive, vulgar and aggressive' way he had been addressed at the beginning of the meeting.
Speaking in response to RBG's public statement, Ian Rosenblatt said the company was insolvent and had been attempting to dispose of assets in recent months. He was a bidder for the Rosenblatt part of the business and had been in discussions with the company’s insolvency adviser Interpath.
He explained that these talks were not held in secret or with any ulterior motive other than finding a vehicle for making a bid to buy the Rosenblatt business. Rosenblatt said today’s announcement ‘sounded the death knell’ for the company and added: ‘[The law firm] Rosenblatt is a fantastic business that I am incredibly proud of, it is my life’s work and I am surrounded by a team of extremely talented and loyal colleagues who are – to a person – desperate to be out of the clutches of RBG and back involved in a creative, entrepreneurial environment that we had from the firm being founded in 1989 to its listing.’
The Rosenblatt group has had a turbulent time since listing in 2018. It initially enjoyed a post-IPO boost, acquiring Memery Crystal and other businesses, with shares peaking at 160p in mid-2021. However they plummeted over the past four years amid the airing of boardroom disputes and worsening financial performance. While RBG remains one of few listed legal businesses its struggles may deliver the final blow to the prospect of other firms taking this route.
Shares in RBG Holdings plc fell by more than one third this morning, to 1.74p.
