Blue Sky resolves court action with Pinnacle and Riparian amid string of board resignations

Brisbane-based Blue Sky has resolved its court action against three former directors as the company’s chairman and chief executive leave the business.

Blue Sky Alternative Investments has reached a settlement over its court action against Pinnacle Investment Management, newly formed Pinnacle affiliate Riparian Capital Partners and several former Blue Sky directors.

Pinnacle said in an update to the Australian Securities Exchange on Friday that all parties have resolved the legal proceeding “on confidential terms”. Blue Sky confirmed the same in an update to the ASX on June 12.

No other details of the settlement were disclosed and all parties either declined to comment further or did not respond to a request for comment.

Blue Sky secured a court order in April banning three of its former directors – Michael Blakeney, Patrick Hayden and Nick Waters – from using proprietary data they had allegedly downloaded while working at their former firm. The order also applied to Riparian Capital Partners, the new affiliate of Pinnacle Investment Management founded by Waters, as well as Pinnacle itself and its chief financial officer and chief operating officer Alex Ihlenfeldt.

Blue Sky had requested then that the restraint be made permanent and the data deleted should it be held by the applicants, as well as a declaration that Blakeney, Waters and Hayden breached their employment contracts, a declaration that each of the three had contravened the Corporations Act and an undisclosed amount of compensation.

The resolution in the proceeding comes after Blue Sky entered receivership last month after it breached a covenant on a loan from Oaktree Capital Management. KordaMentha was appointed as receiver and Pilot Partners as administrator.

Since then, a string of Blue Sky directors have resigned.

Chairman Andrew Day and non-executive directors Cheryl Edwardes, Robert Kaye and John McDonald have all left. Former Hastings Funds Management chief executive Day took over as chairman in November 2018, with Edwardes, Kaye and McDonald taking up board seats in December as part of a revamp of the company’s board.

Blue Sky also announced this week that chief executive Joel Cann has left the firm because the role of CEO was “no longer required.” Cann was appointed in March this year and began his role on April 15.

Oaktree’s appointed board member, Byron Beath, resigned in May 2019 while discussions between Blue Sky and Oaktree over the loan covenant breach were ongoing.