A pair of north-east oil and gas business heavyweights will bring their bust-up before a court later this year.
Balmoral Group, of Aberdeen, provided credit and backing worth £15 million to Ace Winches and built up a shareholding of 70% in the business from 2017-19.
But the relationship between Balmoral managing director Jim Milne and Ace founder Alfie Cheyne quickly soured.
Mr Cheyne and wife Valerie have accused Balmoral of abusing its position as controlling shareholder and of mounting a campaign to “marginalise” them and force the sale of their 30% stake at below market value.
Balmoral denied the allegations, which it labelled “unduly suspicious and conspiratorial”.
A spokesman for the company also said the court action was “unjustified and unnecessary”.
However, a judge has turned down Balmoral’s request to dismiss an “unfair prejudice” petition from the Cheynes.
Balmoral lodged the motion on the basis that the Cheynes rejected a “reasonable” offer to settle the dispute and were therefore guilty of an “abuse of process”.
But Lord Ericht was not “satisfied” that Balmoral’s offer to sell its majority shareholding to the Cheynes was reasonable in terms of price.
He said the row could only be resolved after taking evidence on the facts and scheduled an eight-day hearing.
This will start on August 10, unless the two parties reach a settlement before then.
The Cheynes’ petition sought 11 separate orders, five of which were granted on an interim basis by judges.
Those included interdicts to prevent Balmoral from issuing more shares in Ace, which would further dilute the Cheynes’ holding.
Judges also approved orders blocking the appointment of advisers to sell the business and assets of Ace to Balmoral, or insolvency practitioners to wind up the deck machinery specialist.
The Cheynes also complained about the suspension of monthly payments to them and objected to the appointment of Paul Mitchell as a director.
Balmoral argued it had no intention of issuing shares without the consent of the Cheynes and that their refusal to consent to Mr Mitchell’s appointment was driven by “personal animosity”.
Balmoral said it was not in Ace’s interests to keep paying the Cheynes at a time when the firm faces “imminent insolvency”, and because the former owners were “not under economic pressure”.
In addition, Balmoral claimed the “genesis” of the row was the Cheynes’ “unwillingness to brook any opposition to the manner in which they were operating the company”.
Mr Cheyne launched Alfred Cheyne Engineering in 1992, rebranding the company as Ace Winches 14 years later.
He was named chief executive of the Year in the 2013 Scottish Business Awards.
But the downturn which struck in 2014 strained Ace’s balance sheet.
In 2017, Balmoral received a minority stake in Ace in exchange for an initial investment, before making a fresh cash injection and becoming majority shareholder in late 2019.
Balmoral announced major changes to Ace’s top order in January 2020 following a strategic review.
Mr Cheyne’s chief executive position was filled by former chief operating officer, George Fisher, and the husband and wife team were moved to non-executive roles.
Mr Milne told the Cheynes he wanted to buy their 30% shareholding in June 2020.
But the Cheynes’ wished to regain control of Ace by exercising an option to buy Balmoral’s shares.
They raised the petition with the court and Lord Tyre granted a number of interim interdicts in July.
A series of offers and counteroffers were then sent back and forth between Balmoral and the Cheynes in October, none of which were accepted.
Once evidence is heard, Lord Ericht said the court had several options, including ordering the sale of the minority shares to the majority shareholder, or vice versa, or regulating the company to protect the position of a party.
Balmoral’s spokesman said the company’s investments had rescued Ace from insolvency and prevented many job losses in recent years.
He also said the new management team at Ace had improved the company’s performance.
The spokesman added: “We strongly refute the allegations in the petition and will vigorously defend these at the full hearing currently scheduled for August.”
Mr Cheyne said: “As this matter is subject to ongoing and continuing legal proceedings, we have no comment at this stage.”