The court has allowed former Wasps owner Derek Richardson to pursue a deceit claim against former advisers as part of wider litigation connected to the club’s administration in 2022. The allegations remain contested and will be determined at trial.
While the case centres on a professional sports club, the issues are familiar to business owners across all sectors.
When Ownership and Control Are Not the Same Thing
Modern businesses often operate through multiple entities, investment vehicles and funding arrangements. These structures may be created for perfectly legitimate reasons, including investment planning, tax efficiency or succession purposes.
However, a recurring cause of shareholder and director disputes is a misunderstanding of who ultimately controls key decisions.
The lesson from the Wasps litigation is not whether a particular structure was right or wrong. It is whether everyone involved fully understood how it operated, where decision-making authority sat, and what risks it created.
I’d always say to my clients: “The greatest risk is often not the structure itself. It is the gap between what people believe a structure achieves and what it legally delivers.”
Why Governance Matters to Funders
Corporate structures do not exist in isolation. Lenders, investors and stakeholders need confidence in how a business is owned, managed and governed. Where questions arise around transparency, decision-making authority or ownership, funding can become more difficult to secure, regardless of the underlying strength of the business.
In sectors where cash flow is already under pressure, loss of confidence can quickly become a significant commercial issue. Put simply, perception matters almost as much as legal reality.
The Often-Overlooked Personal Risk
One of the most important reminders from the case is that business difficulties rarely remain confined to the company itself.
Personal guarantees, director responsibilities and shareholder commitments can become highly significant when financial challenges emerge. Arrangements that seem routine during periods of growth often attract much greater scrutiny in times of crisis.
Regular reviews of governance arrangements, personal liabilities and funding commitments can help businesses identify risks before they become disputes.
Five Takeaways for Business Owners
- Keep structures as simple and transparent as possible.
- Understand the difference between ownership and control.
- Consider how lenders, investors and regulators will view governance arrangements.
- Maintain clear records of advice and key decisions.
- Review personal exposure, including guarantees and contingent liabilities, regularly.
My View
The Wasps litigation will ultimately be decided by the courts. However, the wider business lessons are already clear.
Strong businesses are not necessarily built on the most sophisticated structures. They are built on clarity, accountability and a shared understanding of who is responsible for what. Ambition drives growth. Good governance protects it.