<p><a name="_MailOriginal"><strong>From:</strong></a> John Soden &lt;john.soden@moorgateindustries.com&gt;<br />
<strong>Sent:</strong> 11 August 2020 17:18<br />
<strong>To:</strong> James@harcourtinns.co.uk; Rachel@harcourtinns.co.uk<br />
<strong>Cc:</strong> nurse_stephen@hotmail.com; Stephen Phillips &lt;Stephen.Phillips@templebright.com&gt;; sjpmhh@gmail.com; n.curtis123@btinternet.com; Nicholas Stockdale &lt;nicholasstockdale@googlemail.com&gt;; alistair.higgins@gmail.com; Denis Shafranik &lt;denis@ermakgroup.com&gt;; parkhouse87@btinternet.com; shane.gallwey@guinnessfunds.com; Bridget Hallahane &lt;Bridget.Hallahane@guinnessfunds.com&gt;<br />
<strong>Subject:</strong> URGENT NOTICE TO THE DIRECTORS OF THE HARCOURT PUB LIMITED</p>

<p>&nbsp;</p>

<p><strong>To the Board of Directors, The Harcourt Pub Limited</strong></p>

<p>&nbsp;</p>

<p>It has now been five days since we sent a draft letter which we proposed to send to the shareholders to start the process of removing James and Henry as directors.&nbsp; We have not had a response.&nbsp; We asked in the cover email for engagement from the board so that we could discuss the terms of James and Henry standing down and the termination of the operational agreement in each of the 6 pubs. We wish to avoid a messy termination process which will not be in anyone&rsquo;s interest.&nbsp; The board should see this from the shareholders&rsquo; perspective.&nbsp; The current management has had 5 years of operations at the Harcourt and we have been left with &pound;2k in the bank and large debts. &nbsp;&nbsp;All of the pubs seem to be in a suboptimal position with liquidity problems, even before the C-19 lockdown and the management fees and other costs have been excessive, and in the pandemic era even more unsupportable.&nbsp; We have been promised an offer since 2019 and none has been forthcoming although we remain open to consider any offer if one were made.</p>

<p>&nbsp;</p>

<p>It is hardly surprising that in these circumstances that the shareholders have decided to seek a change of both the operational management and at the board level.&nbsp; James himself referred to stepping down as a director in past correspondence. &nbsp;&nbsp;In a meeting at the KPH on 8 July with Stephen Nurse and John Soden he acknowledged that shareholders wished to appoint new directors as soon as they had identified replacements.&nbsp; Clearly if this change is done in a consensual way this will enhance the chances of a successful turnaround, and the directors will be able to avoid the scrutiny of an investigation process and the possible legal claims which result.&nbsp; If &nbsp;a chaotic change of management occurs and any of the pubs become insolvent, perhaps as a result of stakeholders taking action, then an administrator is required by law to make a thorough investigation of directors&rsquo; conduct and send a report to the responsible government department.&nbsp; You will be aware that there are circumstances where directors are required after this kind of investigation to make a contribution back into the estate and where directors may be disqualified to act as directors.&nbsp; We would also anticipate some individual shareholders might wish to take action personally too.&nbsp; We are offering you a dignified way out which is likely to be considerably more preferable than the current direction of travel.</p>

<p>&nbsp;</p>

<p>We strongly believe the pubs are fundamentally sound assets which can be run profitably. &nbsp;&nbsp;&nbsp;In a change of management scenario we expect some shareholders would be willing to put more money into the pubs, to fund a turnaround. &nbsp; Refusing to meet and dragging out the termination process which slows the turnaround is not acting in the best interests of the shareholders or other stakeholders in the pubs including creditors. &nbsp;&nbsp;</p>

<p>&nbsp;</p>

<p><strong>We hope that this can be resolved consensually and we ask again, when is James available to meet to discuss the above? In the absence of any engagement by close of business on Wednesday we will be issuing the request to directors to convene the general meeting which they are required to do under the Companies Act within 28 days of the receipt of notice. Failure to do so will be looked upon very poorly by any liquidator in a subsequent insolvency.&nbsp;&nbsp;&nbsp;&nbsp;We suggest the board takes legal advice as to its possible liabilities and the actions it needs to take at this stage.</strong></p>

<p>&nbsp;</p>

<p><strong>We do not have Henry Harris&rsquo; email address please ensure this email is copied to him and acknowledge receipt.</strong></p>

<p>&nbsp;</p>

<p>John Soden</p>

<p>On behalf of the Shareholder Action Group</p>

<p>&nbsp;</p>