Private jet group owner Thomas Flohr was accused of fraud in London’s high court last week, in an unusual dispute about his actions two decades ago in business deals that provided a foundation for him to launch the luxury airline VistaJet.
The Swiss entrepreneur, whose heavily indebted private jet group offers an exclusive network of aircraft used by a super-rich clientele including stars such as Taylor Swift, denies the allegations and sought to have the case thrown out in the three-day civil hearing that concluded on Friday.
The court heard arguments by former attorney-general Sir Geoffrey Cox that Flohr was “ruthless, single-minded, cynical and dishonest” during proceedings that referenced highly disputed confidential witness statements yet to be made public.
Those statements may only be tested if admitted at any full trial of the claim, of which this was a preliminary hearing on applications to strike it out, and to amend it from breach of contract to include additional claims of deceit.
The case is directed by the UK investor Timothy Horlick, who resurrected a long dissolved investment partnership to bring litigation which resulted last week in questions about his own integrity, honesty and competence.
Flohr’s lawyers, seeking summary dismissal on multiple grounds, called the claim “hopeless”, said the allegations were “unevidenced” and attacked his former close friend as “a person who does not look beyond the end of their nose”. Jonathan Cohen, KC, said that “Mr Horlick is a fundamentally dishonest person”.
“Mr Horlick is not a mendicant,” retorted Cox.
Flohr previously lost an attempt to strike out the claim related to the circumstances of the partnership’s dissolution.
The case centres on €13.5mn of investments from 2002 onwards by Horlick’s Guernsey partnership, Frontiers Capital One, in a UK business of Flohr’s called Comprendium UK that was involved in document management and storage.
While chair of Comprendium UK, Flohr is alleged to have used a parallel set of companies, also named Comprendium, to purchase the Swiss and German subsidiaries of his former employer Comdisco, a US computer equipment leasing business that had collapsed into bankruptcy.
Cox said “Flohr required Comprendium UK because it was a necessary step in his plan to carry out his Comdisco acquisitions. It provided him, no doubt, with a credible corporate platform and gave him substance and credibility with which to bid for those very valuable assets.”
Comprendium UK subsequently failed and Horlick, who was responsible for the investment, stepped down from the partnership in 2008 as a result of a difficult relationship with his fellow investors. The partnership was then dissolved in 2010.
Flohr is alleged to have made “substantial profits” from the Comdisco assets, and to have “kept hidden the true purpose, extent and structure of the parallel companies” from Horlick and the partnership, to which it is claimed Flohr owed contractual and fiduciary duties.
VistaJet eventually absorbed the assets of a Comprendium business in Switzerland. The case follows increased scrutiny of Flohr’s business practices at the group, which he controls and has funded via public debt issues. While he has not taken money out of the company in dividends or salary, he was paid more than $200mn by it in relation to aircraft purchases he facilitated.
A decision in the applications to strikeout, and to amend the claim, from Master Brightwell is expected next year.
The dispute involves arguments about meetings and communications over several years, in particular what Horlick knew and when: what Cohen described as his “discreditable remembrance of an 18-year-old conversation”.
Horlick, who during his friendship with Flohr extended him a €500,000 personal loan that he contends remains unpaid, filed a personal claim against Flohr in 2020 for breach of contract at Comprendium UK that was subsequently withdrawn.
In 2021 the investment partnership was restored to the Guernsey business register and, so resurrected and directed by Horlick, filed a breach of contract claim against Flohr.
While there is normally a six-year limitation period for filing such claims, the claimant argued that Flohr’s “deliberate concealment” means the action is not time-barred.
The court was asked to consider a request by the partnership to amend its claim to one of deceit, what Cox said was “fraud of unscrupulous, determined and deceitful conduct”. The fund is seeking losses and damages in excess of €150mn.
Making reference to partially redacted witness statements by two other former Comdisco executives, rival potential bidders for its assets, Cox alleged that Flohr had induced one not to bid and another to delay their bid. He said at a trial the claimant would “establish the astonishing lengths to which Mr Flohr was prepared to go single-mindedly to eliminate them by misrepresentation and deceit”.
He added that the discovery of the alleged fraud only occurred in 2022, as the claimant researched its case, and the case for fraud is established by “the wider penumbra of facts”.
Cohen argued that the amendment was improper, an “attempt to shoehorn this in by a backdoor” and the case was time-barred. He also challenged the legal basis for the claims of breaches of contractual and fiduciary duties, said there was no concealment, and attacked Horlick for introducing recollections not included at earlier stages of the dispute as “litigation wishful thinking”.
Referring to the 80 references to fraud in Cox’s arguments, Cohen said the “long narrative about what a terrible person Mr Flohr is, strikes me as having been a jury speech designed to prejudice”.
He said the allegations against Flohr were both unfounded and damaging: “The stain of fraud, once it is alleged, never entirely goes away even if disproved.”
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