The founders of service provider to rich families Squadron Collective and its fund manager Fiftyone Capital – initially backed by Laurence Escalante – have ended up in a court battle over control and ownership.
The founders of service provider to rich families Squadron Collective and its fund manager Fiftyone Capital – initially backed by Laurence Escalante – have ended up in a court battle over control and ownership.
Started in 2021 and backed to the tune of $10 million by Mr Escalante’s company Lance East Holdings, the group’s founders, Sergio Lopes and Scott Williams, fell out more than year ago over management control.
Mr Lopes, a minority interest holder, wants to be bought out of the parent company, alleging oppressive conduct from his co-founder in the venture.
Neither Mr Escalante nor any of his interests are a party to the proceedings, but Lance East Holdings is referenced as a funder of the venture. A spokesman for the online entrepreneur said his interest in the business ceased in 2022 when he opted to establish his own stand-alone family office called Lance East Office.
The revelations have emerged as part of a Supreme Court legal action started late last week by Mr Lopes and trustee company Ziggy Specter against Squadron Collective, Mr Williams and another trustee company Lucky Doug.
The court action hinged on a proposed vote last week to remove Mr Lopes as a director of Squadron Collective.
In her judgement Justice Natalie Whitby granted an interim injunction to prevent the vote, finding that the plaintiffs had made a strong case that Mr Williams' conduct in the affairs of Squadron Collection had been oppressive, prejudicial and against the interests of Ziggy Specter.
Justice Whitby said the relationship between Mr Lopes and Mr Williams fitted the description of a quasi-partnership, from which oppressive conduct often arose.
Justice Whitby said the matter ought to be programmed for an urgent mediation and expedited trial.
Mr Williams and Mr Lopes went into business in June 2021, establishing Squadron Collective as the parent company for Cottesloe fund manager Fiftyone Capital which Mr Williams was to be responsible for and which in turn owned, among other things, an interest in another WA fund manager Endeavor Asset Management.
Australian Securities and Investments Commission records show Fiftyone Capital was also a shareholder in Spitfire Family Office, which a recent search showed interests associated with Mr Lopes were the majority stakeholders.
Mr Lopes was responsible for Spitfire which was established as a multi-family office accounting firm, as part of a suite of services intended to be offered to other ultra-high net worth customers who did not wish to establish their own independent family offices.
Lance East Holdings, part of VGW founder Mr Escalante’s empire , invested the $10 million into both Squadron Collective and Fiftyone Capital in August 2021.
Neither Mr Lopes nor Mr Williams contributed capital to Squadron Collective.
However, according to the judgment, Mr Williams and Mr Lopes have been in conflict over the management and operation of the group since mid-2023, and have unsuccessfully attempted to agree to terms that would see Mr Lopes exit.
Mr Lopes owns 16.7 per cent of Squadron Collective while Mr Williams owns 83.2 per cent, having last month transferred one partly paid share to his wife Emma Williams, who now represents the rest of the company’s shareholding.
As part of their case, Mr Lopes and Ziggy Specter have sought to sell their interest in Squadron Collective to Mr Williams and Lucky Doug.
The plaintiffs allege Mr Lopes was excluded from management, that there was a depletion of capital in the two key entities, a diversion of revenue away from Fiftyone Capital, and unilateral decision making by Mr Williams.
They also alleged Mr Williams incurred expenditure in various group companies that was for his own benefit or other entities within the group of companies.
“The plaintiffs allege that, by diverting funds from FOC [Fiftyone Capital] to entities associated with Mr Williams, Mr Williams has breached his fiduciary obligations to act in good faith and the best interests of SQ [Squadron Collective], further oppressing the first plaintiff as a minority shareholder,” Justice Whity said in her judgement.
The defendants, being Mr Williams, a trustee company Lucky Doug and Squadron Collective told the court that there was no evidence upon which the court could find that there was a serious question to be tried.
A Lance East Office spokesperson said: “This matter has nothing to do with Lance East or Mr Escalante, and we have zero involvement.”
"These were relatively small investments in 2021 that were only held for a short period of time, and we ceased being a shareholder more than two years ago.
"There has been no involvement since.”
