Farmison founder suing company, ex-business partner and legal firm after 'being secretly cut out' of takeover deal with former Asda CEO

John Pallagi has already been awarded £145,352 after an employment tribunal ruled he had been unfairly dismissed from the Ripon-based firm following a consortium takeover of the business involving former Asda chief executive Andy Clarke. It saw the firm behind the Farmison brand, FL Meat Realisations Limited, acquired by the newly formed Farmison & Co Limited.

He has now launched a legal claim against Farmison & Co Limited, his ex-business partner and current company director Gareth Whittle and law firm Gateley seeking damages and compensation from them.

Mr Pallagi told The Yorkshire Post that having built the ethical meat company from his bedroom and turning it into a business with a £12m enterprise value as of 2022, losing his involvement with Farmison has been hard to deal with.

"I haven't been able to pick up any work since and my reputation has been hurt. Winning the employment tribunal was a huge relief but it is bittersweet because you are going against something you have founded."

He added: "This further action is an important step I feel I have to take."

A spokesperson for Farmison & Co Limited, along with Mr Whittle and Mr Clarke, said: “Farmison has received the legal claim and is dealing with it through its legal representatives.”

Gateley did not wish to comment.

In a 37-page document filed to the High Court of Justice Business and Property Courts, it states that Mr Pallagi founded the original business in 2011.

In early 2022 private equity fund Inverleith acquired the company and kept Mr Pallagi as CEO but the firm went into administration on April 6, 2023. The workforce, including Mr Pallagi, were made redundant. He had a £650,000 employment claim against FL Meat Realisations made up of salary, a director’s loan and an R&D tax benefit.

The High Court claim states that on April 6 and 7, Mr Pallagi and Mr Whittle agreed to form a consortium to bid for the assets of the business and it was agreed that Gateley through its solicitor Matthew Brown would represent them with Mr Clarke invited to be an investor. Mr Pallagi said he was willing to waive his £650,000 claim “to the extent necessary to facilitate a sale”.

On the day of the bidding deadline, April 14, it is alleged that Mr Pallagi learnt of a group call at 11am involving Mr Whittle, Mr Brown and Mr Clarke that he was not invited to. It led to a separate meeting at 9am on the same day which he did attend and where it is alleged there was no suggestion his involvement in the deal was in jeopardy.

Regarding the 11am call which took place without Mr Pallagi, the legal claim states that in a letter sent this year “Gateley asserted that, during this call, Mr Brown was instructed by Mr Clarke to appropriate the consortium bid to the Whittle consortium, thereby… excluding the claimant. Gateley asserted that Mr Brown duly did so".

The employment tribunal ruling said Mr Pallagi was told on April 17 by Mr Clarke that he was no longer part of the consortium - news that “came as a significant shock to the claimant”.

The sale of the business to the new consortium was completed on April 21 and a new CEO was appointed on the same salary as Mr Pallagi on June 12.

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