JCB heir fails to take control of US company at centre of legal row with ex-best friend | Business

Jthe heir to digging company JCB has failed in his bid to take control of a company run by his former best friend after a bitter US court battle that included lurid allegations about personal conduct – and even revealed an apparent attempt to buy Michael Jackson’s Neverland Ranch.

Jo Bamford, a grandson of JCB founder, sued Joseph Manheim last year in Delaware, claiming his former friend had ‘surreptitiously’ taken control of a company they set up to help wealthy investors , mainly Chinese, to settle in the United States. Bamford, 44, a self-proclaimed ‘green entrepreneur’, claimed Manheim secretly embezzled millions of dollars from the business and Bamford sought damages of $13.8m (£11.3m ).

Bamford is the son of Anthony Bamford, the billionaire peer and chairman of JCB – and a top donor to Prime Minister Boris Johnson. Lord Bamford’s Daylesford estate is believed to have hosted Johnson’s wedding party on Saturday.

The Guardian last year reported on the court case, which spotlighted one of Britain’s wealthiest families, revealing how Bamford admitted to using a company email account to order cannabis and sending unspecified “explicit and inappropriate photos”.

The case also appears to reveal how Jo Bamford structured his relationship with the company to minimize his tax bill in Britain. The court said: “Bamford wished to hold its stake through an entity rather than personally, which it believed would help minimize its UK tax.”

The Delaware court opinion – a 125-page judgment dated June 24 this year – found that Manheim should reimburse the company $2.4 million plus interest for “excess management fees” and certain expenses deemed “not entirely fair”, and that he failed in his responsibilities as a director of the company.

However, the court denied Bamford’s request to cede control of the company to him and his co-plaintiff, according to the judgment. According to the filing, Bamford failed to prove Manheim guilty of fraud or negligent misrepresentation, but all major parties were criticized by the court.

Bamford’s lawyers said he filed a motion asking the court to increase the amount Manheim must pay.

Wrightbus chairman Jo Bamford speaking as Translink unveils Northern Ireland's first sustainable fuel cell buses powered by wind power at its Milewater service center in Belfast in 2020.
Jo Bamford is a grandson of the founder of JCB. Photograph: Liam McBurney/PA

The ruling is likely to raise new questions about the conduct of Bamford, whose family wealth and connections have helped it become a major player in the green economy, particularly around hydrogen. In 2019 he rescued Northern Ireland bus maker Wrightbus with plans for it to build hydrogen-powered buses from Ryze, his distribution company, and he launched a fund that aims to raise 1 billion pounds to invest in hydrogen projects.

The court found that Bamford, along with the other key witnesses, had had his “credibility successfully challenged on various points”.

Bamford’s attorneys said all actions it took regarding its tax obligations were appropriate and in accordance with US tax laws.

The trial provided a rare insight into the world of the super-rich. Bamford was described as a collector of classic Ferraris and rare pheasants, and he admitted to ordering cannabis using a work email. In the case, Bamford successfully challenged some of Manheim’s expenses, including visits to a strip club called Delilah’s Den, expenses related to a ski vacation injury, and fees paid to a manager who, according to the court, acted as a “foil” for Manheim.

The lawsuit also revealed a never-before-seen plan by Bamford to buy the Neverland Ranch that once belonged to Michael Jackson, who died in 2009. The alleged plan for Bamford to buy the 1,092-hectare (2,700-acre) site was discussed in 2013, show court documents.

During cross-examination, Bamford’s attorney asked Manheim about “Project Peter Pan.” Manheim responded by asking if she was referring to “buying the Michael Jackson ranch thing.” The emails mentioned in the lawsuit suggest that Bamford has reached the stage of evaluating nondisclosure agreements related to a potential sale. It’s unclear how far Bamford has progressed with a potential purchase, and its attorneys have not responded to questions about it.

The case centered on the Delaware Valley Regional Center (DVRC), a company established in 2012 to provide US green cards to wealthy foreign investors.

British Prime Minister Boris Johnson waves from an excavator during his visit to the JCB factory in Vadodara this year.
British Prime Minister Boris Johnson waves from an excavator during his visit to the JCB factory in Vadodara, India this year. Photograph: Ben Stansall/AFP/Getty Images

The program was structured as a real investment in infrastructure, building roads in Pennsylvania, but the returns on investment were meager: Expert testimony cited in court suggested annual after-fee returns were negative 1.41% , meaning investors lost money. However, it appears that the real benefit of the controversial program was to grant investors access to the coveted “green cards,” which confer US residency rights.

In exchange for $500,000 each, which was invested in local road and public transportation projects, plus a fee for DVRC, wealthy foreigners could apply for expedited visas to live and work in the United States.

The four-day trial in June 2021 detailed how a once close friendship soured. The pair socialized and vacationed together and were godparents to each other’s children. The court found that Bamford was “strapped for money following disagreements with his father” at the end of 2017, and so turned to DVRC to pay dividends.

Tensions between Bamford and his father, Lord Bamford, began when the father refused to start planning for the son to take over as CEO of JCB, court documents suggest. The maker of diggers and other construction machinery is one of Britain’s biggest private companies, and the Bamfords have used their estimated £4.3billion fortune to exert political influence. JCB and Lord Bamford were among the biggest donors to Boris Johnson and the Brexit campaigns, and Jo Bamford personally lobbied Johnson for a pro-hydrogen government policy.

Bamford asked the court to end Manheim’s control of the company, but the court denied the request. “The plaintiffs are far from proving facts that would justify such an extraordinary remedy,” wrote the judge.

DVRC operated under the EB-5 program, which allowed wealthy foreigners to effectively purchase the right to live and work in the United States. The EB-5 is now on hold for new candidates after criticism from senators that – although legal – it posed a national security risk.

Through its attorneys, Bamford has previously defended its involvement in the EB-5 program as a completely legal business.

Bamford’s lawyers declined to comment on the filing.

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Manheim said, “I’m extremely proud of DVRC’s accomplishments over the past 10 years, enabling and supporting projects that have created tens of thousands of jobs and dramatically improved the rails and roads of southeastern Pennsylvania. .

“I regret, and I am still perplexed, that Mr. Bamford pursued four years of unsuccessful litigation, resulting in the expenditure of millions and millions of dollars in legal fees, in an attempt to increase his profits and gain control of the company.

“I am very grateful, and not surprised, that the court has dismissed the majority of Bamford’s claims and its attempt to take control of the business. All of us at DVRC are excited to move forward and continue to serve the interests of our investors and stakeholders.

Bruce E Jameson, an attorney representing Manheim at Prickett, Jones & Elliott, said: ‘We are pleased that the court, after assessing the complete case, has dismissed the plaintiffs’ allegations that they were defrauded and dismissed their claim for control. of the DVRC.

“While we respectfully disagree with the court’s awarding of certain damages, we are pleased that the court has dismissed the majority of plaintiffs’ claims for damages.”

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