The Appeals Chamber of the Court of England and Wales upheld the March 25, 2022 judgment ordering wealthy Georgian businessman Irakli Rukhadze, along with his business partners, to pay significant compensation to the companies Revoker and Recovery Partners. This is a win for the family of deceased Georgian tycoon Badri Patarkatsishvili’s family.
The case relates to managing assets owned by a deceased Georgian billionaire named Badri Patarkatsishvili. In 2018, the UK court found that Rukhadze, as the director of Salford Capital Partners International (SCPI), “breached his fiduciary duties by acting against the company’s best interests, conspiring against it, and gaining control of assets.” The duties involved providing recovery services to the family of Badri Patarkatsishvili, necessary to locate and protect assets held by various entities and individuals. Testimonies from various individuals were given, including Patarkatsishvili’s widow and representatives of both claimants and defendants.
After a Phase 2 trial, the Judge ruled that Rukhadze and partners should pay the claimants all proceeds they had earned through the business opportunity taken from SCPI, with interest. On March 25, 2022, the Judge made a reserved judgment, in which she decided on several issues related to how the account of profits should be calculated. The defendants were, however, entitled to an equitable allowance of 25% of the profits they made from a business opportunity. Patarkatsishvili’s family cross-appealed, arguing that Rukhadze did not argue for the market value of their services and that the judge based her conclusion on irrelevant factors such as expectations.
Rukhadze also disagreed with the judge’s decision and appealed on two grounds. The first was about the profit-sharing agreement, which Rukhadze claimed was a 50/50 split that should have been considered in the accounting. The second was about the delay in the case, which Rukhadze believed should limit the amount of compensation he would receive.
However, the court disagreed with Rukhadze’s arguments. It found that there was no binding agreement for the defendants to receive 50% of the profits and that awarding them everything they would have earned without breaching their duties would go against the court’s principle of deterrence. Yet the court upheld the original decision to award Rukhadze 25% of the compensation.
Who was Badri Patarkatsishvili?
Patarkatsishvili was a financial force in Georgia’s politics who initially supported the 2003 “Rose Revolution” but diverged from President Saakashvili’s administration in 2006. He launched and financed anti-governmental rallies organized by the opposition in 2007, which were widely reported and promoted by Imedi TV, a channel he founded. After the violent crackdown on one of these protests, he was charged with an attempted coup, and his assets, including Imedi TV, were frozen. Patarkatsishvili challenged Saakashvili in the 2008 presidential elections but pulled out after the charges were brought against him, although he remained on the ballot and received 7.1% of the vote. His defense claimed that the charges were politically motivated.
Old Wealth, New Wealth
After his death, the family, unsure of what assets existed or how to access them, decided that they needed assistance in identifying, protecting, and recovering the estate’s assets (the “Recovery Services”). Rukhadze, Alexeev, and Marson participated in the Recovery Services with the Family in the early years but fell out. In 2008, the Family signed a non-binding term sheet with SCPI to provide recovery services.
In 2009, Irakli Rukhadze established Hunnewell and demanded that shares of Revoker be registered in his name, but SCPI refused to comply. Rukhadze attempted to turn Patarkatsishvili’s family against SCPI and signed a contract granting them access to $500 million worth of assets. Hunnewell would receive 15% of the recoveries. SCPI lost the opportunity to provide the family with recovery services and significant financial resources. Hunnewell now manages the Patarkatsishvili family’s most significant assets. A dispute ensued over the right to pursue recovery services.
Currently, Rukhadze owns and manages multi-million dollar projects and assets in Georgia, including the third largest bank by market share “Liberty Bank,” the largest metallurgical plant in the country “Rustavi Steel,” owns a minority stake in the largest cement factory “Heidelberg Georgia,” as well as media holding that owns “Imedi” and “GDS” channels. Irakli Rukhadze personally owns a minority stake in the largest communications company in Georgia, “Magti Telecom,”
- 30/10/2018 – Imedi TV Pledges to Fight Against Return of UNM ‘Regime’
- 17/10/2018 – Prosecution: Security Service Planned Patarkatsishvili Murder in 2007
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