Magnus Lofgren accused of breaching duties to employer in sale of Swedish site
Resolution Property has accused its former European director of diverting a development opportunity to a rival company he owned secretly.
Robert Laurence’s investment company is taking Magnus Lofgren, who left in March 2006, to the High Court over the sale of a development site in Jarfalla, Sweden.
Resolution claims Lofgren breached his duties to the company by arranging for the land to be bought, developed and sold by companies connected to ML Holdings, which he controlled.
In a 14-page claim filed on 19 March, Resolution says Lofgren was acting ‘for his own direct or indirect benefit’ in order to ‘make a secret profit’.
The claim centres on the sale of land known as the Barkarby site, which was next to a retail park owned by Resolution.
Resolution claims that, towards the end of 2004, Lofgren was asked to investigate whether the company could buy the site, which was a temporary car park at the time.
But in early 2005 Lofgren told Laurence that he did not think the land was of significant size to be of interest to Resolution and that the site was being sold to Lofgren’s father.
On the 21 June 2005 the municipality of Jarfalla sold the site to real estate vehicle Dormy Fastigheter which was later taken over by NREP Barkarby, a subsidiary of ML Holdings.
The company alleges that throughout 2005, while still working for Resolution, Lofgren held meetings to discuss the deal known as ‘Project Dormy’.
On 6 October 2005 Lofgren was made chairman of NREP Barkarby, which then merged with Dormy Fastigheter, and on 15 November 2005 Lofgren joined Dormy Fastigheter’s board.
In late 2005 and early 2006 the Barkarby site was developed into a superstore with golf retailer Dormy.
In October 2006 the 71,000 sq ft store was sold by NREP Barkarby to Aberdeen Property Investors’ Pan Nordic Sweden fund for SKr28.6m (£2.41m).
Resolution is suing Lofgren for the profits he made from the sale of the developed building. It claims Lofgren resigned in January 2006, saying he was going to assist his father with the family business in Sweden.
Resolution waived his contractual 12-month notice period and gave him £17,000 under the termination agreement.
Resolution says Lofgren then joined North Real Estate Opportunities Fund, which is now managed by Absolute Capital Management. In so doing he breached the terms of his service to the company.
The amount for which Lofgren is being sued for could reach the £1m mark and includes the £17,000 payment, a £51,850 bonus he was given in January 2006 and £10,602 expenses he claimed, as well as the profit from the sale of the store.
Resolution confirmed it was taking High Court action against a former employee but declined to comment further. Lofgren declined to comment.