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Hello everyone.
Some years ago, I worked for a UK-based tech company that was eventually sold to a US firm. Through the years, i had been awarded share options, so they vested during the sale and became of value. The US firm split the sale price into a principle and an earn-out portion, with the principle paid straight away and the earn-out being due if we hit certain targets in the first year. This is apparently a common thing. The question of whether we hit the target became the subject of court action when the US employer refused to pay the earn-out 12 months later. As a result, by not opting out, i automatically became part of a US-based class action of shareholders against them for breach of contract. That case was originally won, and the company duly paid out. I was awarded approx $14000, of which i received around £7500 after deductions and transfer fees. The class's legal council did warn in the small print that an appeal was possible, but said it was highly unlikely to be overturned based on the judge's decision comments. So, of course, like any good citizen, i spent the whole lot (i actually was getting married at the time, so it got gobbled up into that).
However, 3 years later they appealed and, to everyone's surprise, had the decision overturned! They're now demanding the return of the full payout, plus 10% annual interest, from all that were part of the class. This of course means i'd be paying back much more than i originally received, as i naturally can't deduct legal fees! At today's rates, it'll cost me around £3500 more than i ever received.
Having done some research, I understand that the US court has no direct jurisdiction in the UK, but now that the case has concluded they can apply for a summary judgement from an English court and force recovery of the debt. I assume the costs of this would be added to my bill.
My involvement in the case was pretty much zero from start to finish, as a lowly UK employee that just happened to have share options, and i've certainly never been part of any US court proceedings other than to not formally opt out of the class action, and of course to accept the payout when it came. While this case was going on, the business unit of which i am a part was sold on, so i have no connection anymore to the original US company.
The class's legal council (that won the case, but lost the appeal) suggested that we should individually contact the lawyers acting for the US company and try to negotiate repayment terms. Consequently, last year I made an offer of just over half (basically, all my savings could stretch to), but they've just come back and said that was unacceptable and made a counter-offer to just deduct the interest added since the judgement last year (which equates to about $1000). They've made this offer appear very time-limited and want agreement and full repayment before the end of January.
The question is, where do i go from here? I've no idea whether their threat of action is real, or if this counter-offer is some attempt to get me into an agreement so they don't have to go to the hassle of obtaining a foreign judgement. Should i bite the bullet, take out a loan, and accept the counter-offer, or should i wait for the English court summons if it comes?
If they do pursue a summary judgement over here, what will happen? Will the court just dish out a CCJ on me, with the consequent debt recovery, or would i have the opportunity to respond? Would the court acknowledge, in any way, that i have made an offer previously? And what about the extortionate post-judgement 10% interest - would the English court care?
Many thanks for any advice you can give.
Some years ago, I worked for a UK-based tech company that was eventually sold to a US firm. Through the years, i had been awarded share options, so they vested during the sale and became of value. The US firm split the sale price into a principle and an earn-out portion, with the principle paid straight away and the earn-out being due if we hit certain targets in the first year. This is apparently a common thing. The question of whether we hit the target became the subject of court action when the US employer refused to pay the earn-out 12 months later. As a result, by not opting out, i automatically became part of a US-based class action of shareholders against them for breach of contract. That case was originally won, and the company duly paid out. I was awarded approx $14000, of which i received around £7500 after deductions and transfer fees. The class's legal council did warn in the small print that an appeal was possible, but said it was highly unlikely to be overturned based on the judge's decision comments. So, of course, like any good citizen, i spent the whole lot (i actually was getting married at the time, so it got gobbled up into that).
However, 3 years later they appealed and, to everyone's surprise, had the decision overturned! They're now demanding the return of the full payout, plus 10% annual interest, from all that were part of the class. This of course means i'd be paying back much more than i originally received, as i naturally can't deduct legal fees! At today's rates, it'll cost me around £3500 more than i ever received.
Having done some research, I understand that the US court has no direct jurisdiction in the UK, but now that the case has concluded they can apply for a summary judgement from an English court and force recovery of the debt. I assume the costs of this would be added to my bill.
My involvement in the case was pretty much zero from start to finish, as a lowly UK employee that just happened to have share options, and i've certainly never been part of any US court proceedings other than to not formally opt out of the class action, and of course to accept the payout when it came. While this case was going on, the business unit of which i am a part was sold on, so i have no connection anymore to the original US company.
The class's legal council (that won the case, but lost the appeal) suggested that we should individually contact the lawyers acting for the US company and try to negotiate repayment terms. Consequently, last year I made an offer of just over half (basically, all my savings could stretch to), but they've just come back and said that was unacceptable and made a counter-offer to just deduct the interest added since the judgement last year (which equates to about $1000). They've made this offer appear very time-limited and want agreement and full repayment before the end of January.
The question is, where do i go from here? I've no idea whether their threat of action is real, or if this counter-offer is some attempt to get me into an agreement so they don't have to go to the hassle of obtaining a foreign judgement. Should i bite the bullet, take out a loan, and accept the counter-offer, or should i wait for the English court summons if it comes?
If they do pursue a summary judgement over here, what will happen? Will the court just dish out a CCJ on me, with the consequent debt recovery, or would i have the opportunity to respond? Would the court acknowledge, in any way, that i have made an offer previously? And what about the extortionate post-judgement 10% interest - would the English court care?
Many thanks for any advice you can give.
