London Antiaging Clinic - Case Update

The shareholders of a London beauty clinic recently faced off over the fate of the company, with one shareholder arguing the company should be put into administration and the other resisting on the basis of an “implied term” in the shareholders agreement.

The company carried on the business of a health, beauty and wellbeing clinic known as The Galen Clinic at 9 Queen Anne Street, London. The shareholders of the company were Marko Ventures Ltd (MVL), the 60% shareholder and principal funder of the company, and the 40% shareholder, London Med Aesthetics Ltd (LMA), a company controlled by by Dr Andreas Androulakakis and his wife.

MVL had provided a £7.5 million loan facility to the company, but remained unpaid after the business failed to become profitable and was unable to meet its financial obligations. MVL demanded payment of the outstanding debt and alleged that Dr Androulakakis and LMA had misused company funds, removing substantial sums from the bank account — allegations which Dr Androulakakis and LMA denied.

MVL then issued an application seeking to appoint Nicholas Simmonds and Christopher Newell of Quantuma Advisory as joint administrators. MVL claimed to have standing as a creditor to seek an administration order. LMA opposed the application, arguing that an implied term in the shareholders agreement between the parties prohibited shareholders from placing the company into administration based on debts owed to them.

Complicating matters further was that MVL’s proposed administration involved a pre-pack sale to Reborne Longevity, a newly incorporated entity owned by the same individuals behind MVL. Reborne offered £195,000 for the business, assumed all trade creditor liabilities, and ensured continued employment of the 22 employees.

The Court ultimately granted the administration order and approved the pre-pack sale, stating that there was no basis to imply the term suggested by LMA into a professionally drafted agreement with an entire agreement clause. The Court also determined that the company was insolvent and unable to pay its debts, administration was likely to achieve a better outcome for creditors than liquidation, and that the Reborne proposal was the best available option, ensuring trade creditors were paid, employees retained, and business continuity maintained.

Read the decision here.

Professionals involved:

• Simon Passfield KC of Guildhall Chambers (instructed by Veale Wasbrough Vizards) for MVL

• Oliver Hyams of South Square (instructed by Reed Smith) for LMA and Dr Androulakakis