Court cases expose bitter infighting between Gillespie business family

A court heard accounts of one Gillespie brother assaulting another and breaking his skull, and of a phone call in which threats were made to a man that "heavies" would douse him in petrol.

The family, which included Sir David Murray among its associates, has split into rival camps in recent times and the divide has led to a series of litigations in the Court of Session in Edinburgh.

In the latest, Graham Gillespie and his son, Scott, are being sued for a combined 1.2m by Gillespie Investments Ltd (GIL) for alleged breaches of their fiduciary duties while directors of the company by allowing, authorising or receiving payments.

The court also heard Graham Gillespie made payments from company funds to a "professional gambler" that were to his "personal benefit" and to two aviation firms which were "not business expenses".

Lord Hodge said in a judgment that four Gillespie brothers, Graham, Alan, Steven and Gary, had worked together in the open-cast coal industry and made "considerable sums of money". He added: "They had an interest, latterly, in GM Mining Ltd, which was a joint venture between the Gillespie family and the well-known entrepreneur Sir David Murray, and mined coal at Drumshangie.

"When their coal interests began to decline, they moved their attention to investment in property and property development. Graham, Steven and Gary also had interests in breeding and trading in horses."

The judge said the brothers' relationships were volatile at times and there was a history of rows and, on occasion, violence and threats of violence.

Lord Hodge went on: "In particular, Graham Gillespie assaulted Steven Gillespie in about 2000, fracturing his skull and causing him serious injury. Thereafter, Steven pursued business activities, which were not integrated into the other family businesses, through Eastercroft House Ltd."

In 2006, Eastercroft purchased the share capital of GIL, which owned Ingram House, a retail and office block in Ingram Street, Glasgow, for 4m. The use which had been made of GIL assets to promote other interests caused a further breakdown in the family, with Steven and Gary on one side and Graham, Alan and Graham's son Scott on the other.

"Each of the brothers and Scott Gillespie were directors of GIL. Stephen Bird, a 25-year-old and partly qualified accountant, joined them to assist in the financial administration of GIL and the other family businesses," said the judge.

"In March 2007, Steven Gillespie made a seriously threatening phone call to Mr Bird, accusing him of having misappropriated 2m.Mr Bird tried to calm him down, but Mr Gillespie threatened him and suggested that people were coming round to see him with steel bars and baseball bats to make him talk.

"Steven Gillespie denied the threats... I do not believe this evidence and I am satisfied that Mr Gillespie himself knew it to be untrue." The judge said Graham Gillespie had chosen not to give evidence in the case, although he appeared to have been very influential in the way the family operated the businesses and to have exercised a strong influence over his son. Also, Alan Gillespie did not testify.

"Each of Steven, Gary and Scott Gillespie gave some evidence which I cannot accept and which I conclude was knowingly untruthful," he added.

Lawyers in the case produced a list of disputed payments by GIL, authorised by Graham Gillespie.

Lord Hodge rejected a suggestion by Scott Gillespie that payments to his father of almost 200,000 were an agreed bonus.

Another payment, of 86,500, had been to Robert "Rab the Bookie" Duffin, and Lord Hodge was satisfied that it had not been expenses relating to GIL's business. "There was evidence that Mr Duffin was a professional gambler and an associate of Graham Gillespie, who also enjoyed betting. I am satisfied that the payments fall to be treated as appropriations of GIL's funds to Graham Gillespie's personal benefit.

"Similarly, payments (111,000) to Herr Ernst Hofschruer fall to be treated as sums used for Graham Gillespie's personal benefit. The payments related to the purchase of horses for Graham Gillespie's equestrian business.

"Payments to Murray Aviation and Ocean Sky Aviation (20,000) related to the charter of private jets by Graham Gillespie in relation to his equestrian interests or personal expenditure and were not expenses incurred in relation to GIL's business."

Lord Hodge said neither Graham nor Scott Gillespie disputed acting in breach of his fiduciary duty as a director of GIL, but it was claimed GIL had issued a waiver of claims against family members in return for a waiver by Graham and Scott of claims they had against the company.

Lord Hodge called for further submissions before delivering a final ruling in the cases.