Legal challenge to Torex sale

Torex Retail, the troubled retail IT company that entered administration recently, could face a legal challenge over US investor Cerberus’s purchase of its assets for £204.4m (€302.9m).

Neither shareholders nor unsecured creditors are expected to see anything from the deal, and furious investors are now said to be talking with lawyers about the way the transaction was handled.

The UK Shareholders Association, a body representing private investors, had already requested an extraordinary meeting to oust Torex chairman Steve Marshall and non-executive director Mike Grant. The organisation claimed that “their past actions to pursue a disposal of the operating businesses of Torex might not be in the interests of ordinary shareholders”.

In a statement referring to the Torex “debacle”, the UKSA said on Wednesday that the board had ignored an alternative option to help the struggling company, which is currently under investigation by the Serious Fraud Office for allegations of fraud, money laundering and insider trading.

“Basically what UKSA feared has come to pass,” said the statement. “This company, which was valued at more than £500m at one time, and which had revenues of £300m, with strong product offerings, loyal staff and customers, and great products, has been sold for a pittance.

“But there was an alternative on the table that could have been pursued as Alix Partners, a corporate turnaround specialist, had been introduced to Torex by UKSA and they believed an alternative restructuring and refinancing proposition was achievable.

“Our question is simple: Why did the directors of Torex not consider this alternative more seriously, because it was clear to us that this was likely to be the outcome of their chosen path some months ago.”

The UKSA has said that it was seeking legal advice on the situation.