Mansion Group Gains Ground in Legal Battle with Former CEO

The legal battle between the defunct Mansion Group and its former CEO, Karel Manasco, reached a new chapter after a judgment from the Supreme Court of Gibraltar from last week. The two parties clashed together in a legal battle last year.

Several months ahead of the shutdown of Mansion Group, the Supreme Court of Gibraltar issued a £5 million ($6.4 million) asset freeze order against the company’s former CEO. Manasco had previously left the company late in 2021 after an internal investigation.

Manson Group accused its former boss of using corporate finances for personal expenditures. Moreover, the company alleged Manasco benefitted from bonus payments without authorization, while also alleging he completed unauthorized financial transactions.

However, the former CEO responded to the accusations and filed counterclaims. Manasco alleged Mansion Group engaged in unlawful gambling activities in a number of jurisdictions, offering its services in violation of regulations. The former boss claimed that the company didn’t hold a license in jurisdictions such as Germany, Austria and Belgium, among other countries, but still supplied its services.

In the most recent chapter of the legal battle, the Supreme Court of Gibraltar resorted to applying an exception of the usual confidentiality of settlement negotiations, also known as “without prejudice (WP) privilege.” What’s notable about the case is that this exception, often referred to as “unambiguous impropriety,” is rarely used and recognizes that certain threats made by the defendant against Mansion Group fell outside of the scope of the WP protection.

The Legal Battle Continues

The Supreme Court effectively acknowledged that while some claims are protected under the WP privilege, the defendant submitted claims that fell outside of that scope. Generally speaking, the WP privilege enables parties to settle their dispute without fears about their claims or information being used against them.

“That in all those circumstances the WP Letter far exceeds what is proper and permissible in litigation and clearly abused the without prejudice rule to cloak what amounts to clear unambiguous impropriety,“

reads a judgment by the Supreme Court of Gibraltar

An exception to the WP privilege is claims or communication that suggests blackmail, perjury or other unlawful actions. In other words, some of the threats made by Manasco against Mansion Group were serious enough not to fall under the exclusion from WP protection.

The Supreme Court of Gibraltar moved to dismiss the former CEO’s request to amend his defense. The Court also dismissed the allegations against Mansion Group for unlawful conduct recognizing them as “bare assertions,” which are “not supported by contemporaneous documents.”

While the latest judgment marks a small victory for Mansion Group, the legal battle continues.