Revolution Beauty has ended its long-term battle with co-founder and former CEO Adam Minto, but faces another legal challenge from a former investor seeking potential claims against the group.
The beauty retailer said on Monday that Minto had agreed a “full and final settlement of certain claims between them” and will pay the company £2.9m.
The sum will be paid in six annual instalments of £483,333 due on March 28 each year. If a payment is missed, the remaining sum will be subject to 8% interest per annum.
As part of the agreement with Minto, Revolution Beauty has agreed to drop its case against its former boss and accept “no admission or acceptance of liability by either party”.
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The group said: “Having considered its options and legal advice received, the board of directors believe this is a fair settlement for the company”.
The announcement of a settlement comes days after Revolution Beauty received a pre-action letter from former investor Chrysalis Investments.
Chrysalis, which declined to comment further on the pre-action letter, told investors in financial results published last week that the Revolution Beauty shares had been bought “on the basis [of] information” that later turned out to contain “misstatements and material omissions”.
It added: “The company wrote a formal letter of claim to Revolution Beauty on 22 November 2023, which requested a response within 28 days.
“A response has recently been received asking for a further 28 days to provide a response. The company is now considering next steps with its retained lawyers, Travers Smith.”
Revolution Beauty said on Friday that it contests the allegations brought by Chrysalis, which bought the shares in July 2021 and sold them in late 2022 after a 90% drop in their value.
The group confirmed it had received a pre-action letter from the investor, but added that Chrysalis had not commenced formal legal proceedings.
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