PwC warned Freshstream about the founder. Freshstream invested anyway
How a personal remark by the majority shareholder and CEO during due diligence became an early warning of a risk Freshstream believed it could manage
The case of Peter Waddell HoldCo Limited v Bluebell Cars Holding Limited and others [2026] EWHC 2028 (Ch) arose from the collapse of a relationship that had begun with Freshstream’s investment in Big Motoring World.
Peter Waddell founded the used-car business and, when Freshstream invested in 2022, was its chief executive and retained the majority stake. Peter Waddell HoldCo Limited was subsequently established to hold that stake. The private equity firm invested through Bluebell Cars Holding Limited and obtained extensive contractual protections as part of the deal.
The relationship subsequently deteriorated. By 2024, Waddell had lost control of the group, his directorships had purportedly been terminated and he had been summarily dismissed following an investigation into his conduct.
Waddell and his holding company challenged what had happened. Peter Waddell HoldCo also brought an unfair-prejudice petition under section 994 of the Companies Act 2006.
The eventual judgment did not produce a clean victory for either side.
Mr Justice Marcus Smith found that Big Motoring World had been entitled to dismiss Waddell without notice because some of his conduct amounted to gross misconduct. But he also found that Freshstream had pursued a “pre-conceived and orchestrated plan” to obtain permanent control of the business without using the contractual mechanism under which it could have acquired further shares from Waddell. Peter Waddell HoldCo therefore succeeded on its unfair-prejudice case.
The judge’s criticism of Freshstream was not that Waddell had done nothing wrong. In fact, he said that there were matters which should, long before December 2023, have resulted in some form of disciplinary process against him. His criticism was that Freshstream allowed Waddell’s behaviour to continue “unchecked” until it was in a position to push him out of the business.
For Big4News, however, the more interesting part of the case comes much earlier.
PwC was not a party to the proceedings and no claim was made against it. But evidence given about the original investment opens a window onto the actions taken by the firm during Freshstream’s due diligence.
Freshstream engaged PwC for financial due diligence
Freshstream engaged PwC to conduct financial due diligence.
During that work, however, something happened that had nothing to do with the numbers.
The incident involving X
According to testimony, the PwC team included a young woman, referred to as “X”.
During a meeting which included representatives from PwC, Freshstream and Big Motoring World, Waddell made a personal remark to her.
The witnesses later disagreed about exactly what he had said. Freshstream’s witnesses recalled a comment about X’s appearance, broadly to the effect that Waddell had described her as pretty. Waddell said he had simply commented that it was good to see someone smiling.
Whatever the precise words, the judge treated the episode as materially more serious than an ill-advised compliment.
X subsequently asked to be removed from the engagement. PwC reassigned her.
Now this is where it gets interesting. Moving X onto another engagement addressed the immediate problem facing PwC as her employer. But the fact remained that the firm’s client was on the verge of investing substantial sums to acquire a minority interest in a company with Waddell as chief executive and majority shareholder.
PwC could have let sleeping dogs lie. Its remit was financial due diligence, not an assessment of Waddell’s character. But the firm did not leave the matter there. It raised what had happened with its client.
Gilles Gradassi, then a principal in Freshstream’s investment team, told the court that he received a call from a senior PwC partner about the incident. He regarded the intervention as highly unusual, and what he heard caused him to question whether Freshstream should continue with the transaction.
Freshstream executive Reza Fardad also described the communication chain when questioned by the judge. After PwC raised the issue with Gradassi, the matter moved into Freshstream and was considered at senior level.
There was no PwC memorandum before the court explaining why the firm made the call, and no PwC witnesses gave evidence. But Marcus Smith J drew his own conclusion: PwC had contacted Freshstream ‘to warn a client who was walking into potential trouble’.
Freshstream nearly walked away
Freshstream took the warning seriously. The issue was discussed at senior level, including by members of its investment committee. The company came close to abandoning the transaction.
In the end, however, it decided to proceed. Its reasoning was that it could manage Waddell’s behaviour through protections negotiated as part of the investment.
Things did not turn out quite the way they planned.
The due-diligence episode matters because Freshstream had already confronted the possibility that Waddell’s conduct posed a management and reputational risk. By early 2024, that risk had become intertwined with the struggle over control of the business.
The allegations became much more serious
By March 2024, a much broader case concerning Waddell’s conduct was being assembled. A central figure in that process was Thomas Clarke, Big Motoring World’s company secretary. Clarke was initially employed as Waddell’s personal assistant. From August 2021 he served as head of legal and executive assistant to the CEO, later became known as commercial director, and became company secretary when Freshstream came on board. He was also a member of the MDE Investigation Committee.
On 1 March 2024, Clarke circulated a list of allegations concerning Waddell. Few of the incidents he collated had triggered a grievance or disciplinary process. The judge found that Clarke played an active role in gathering the evidence: he took the lead in identifying incidents, listening to people, interviewing them and persuading witnesses to participate in the independent investigation. Marcus Smith J was sharply critical of Clarke’s reliability as a witness and concluded that his evidence required considerable caution.
That does not mean that the underlying allegations were necessarily false. The final judgment repeatedly distinguishes between weaknesses in the way evidence was gathered and the question of whether particular incidents actually occurred. Indeed, after hearing the evidence himself, Marcus Smith J independently found that several incidents involving Waddell amounted to gross misconduct.
The allegations were serious enough to raise questions about possible breaches of discrimination and harassment law and the potential reputational damage to both Big Motoring World and Freshstream.
Nicholas Siddall KC was appointed as independent investigator. His initial findings, issued on 9 April, addressed six incidents. His final report, delivered on 16 April, concluded that 22 allegations had been made out, including findings of harassment, bullying and direct race discrimination, and that 13 amounted to Material Default Events. Waddell was dismissed on the same day.
When the dispute eventually came to trial, Waddell admitted that on two occasions he had used the racist slur “P*”. The judge also found that he had used “Hyundai” in place of “Hindu” on a number of occasions. Marcus Smith J regarded that usage as inappropriate racist language but concluded that it was not sufficiently serious to constitute harassment; he did not classify the “Hyundai” incident as gross misconduct.
The court also examined a series of incidents involving Huma Rather, a BIG employee. One involved a graphic sexualised remark about bending her over Waddell’s mechanical desk. Waddell denied the sexual wording and said he had been making a joke about the desk and dismissing employees. The judge preferred Rather’s evidence on the tone and sexualised content and, taking that incident together with three other incidents involving her, found that Waddell’s conduct amounted to bullying and harassment and constituted gross misconduct.
The judgment also considered allegations concerning sexualised comments at team meetings in Wimbledon and Leeds. The judge found that the Wimbledon incident occurred and was inappropriate, although it did not amount to gross misconduct. He reached a different conclusion about the alleged Leeds incident, finding on the balance of probabilities that it did not occur.
The final judgment also found that Waddell made a remark to two young female employees cleaning a bar area to the effect that he liked women on their hands and knees. Marcus Smith J found the incident both bullying and harassing and held that it constituted gross misconduct.
Another incident concerned Beth Murphy, a cleaner at BIG’s head office. The court found that Waddell made an explicit sexualised remark to her, but rejected both the characterisation of it as harmless banter and the suggestion that Waddell had been sexually propositioning her. Marcus Smith J concluded that Waddell had lost his temper and used the remark as an offensive reprimand. Viewed together with a connected leaf-sweeping episode that the judge regarded as punishment, he found that the conduct amounted to bullying and gross misconduct.
The judgment also records aggressive communications sent by Waddell after his suspension, including threatening WhatsApp messages. Marcus Smith J expressly left the three post-suspension incidents out of account when deciding the wrongful-dismissal claim, because BIG was itself arguably in breach of its obligations to Waddell at that stage and the judge had already found clear pre-suspension incidents of gross misconduct.
The High Court would later find serious defects in that process, including that the Material Default Event Investigation Notice and subsequent MDE Notice were invalid. It also found that the attempt to accelerate the MDE process on 9 April had been undertaken in bad faith and had undermined the independence of Siddall’s investigation. Those defects did not, however, save Waddell’s wrongful-dismissal claim: the court found that some of his actual conduct was sufficiently serious to justify dismissal without notice.
What the court decided
Waddell’s success on the unfair-prejudice claim did not amount to a vindication of his behaviour.
Marcus Smith J held that Waddell’s wrongful-dismissal claim failed because the court independently found repudiatory breaches amounting to gross misconduct which entitled BIG to dismiss him without notice. But the judge also said that he could place no weight on the reasons given in the dismissal letter itself, having found that the process pursued to remove Waddell as CEO had been pre-determined. He also said that there were matters which should have resulted in disciplinary action against Waddell long before Freshstream eventually moved against him.
In fact, the judge found that Freshstream had its own agenda. Rather than dealing with Waddell’s behaviour when the problems arose, Marcus Smith J found that Freshstream had allowed it to continue “unchecked” until it was in a position to exclude him from the business.
He also found the “formation and execution of a pre-conceived and orchestrated plan” which worked backwards from Freshstream’s aim of obtaining permanent control and removing Waddell without having to exercise its call option.
Peter Waddell Holdco therefore succeeded in its unfair-prejudice claim. The judgment left consequential matters arising from the petition for a subsequent hearing.
Freshstream had been warned
Marcus Smith J summed up Freshstream’s position before the investment bluntly:
“Freshstream knew what they were buying into.”
The judge found that PwC had identified a warning sign before Freshstream invested and made sure its client knew about it.
Freshstream listened. It decided the risk could be managed.
With hindsight, it should have given PwC’s warning rather more weight.
Correction — 13 August 2026
An earlier version of this article stated that by March 2024 Big Motoring World’s HR department had received complaints about Peter Waddell alleging racist, sexist, misogynistic, bullying and abusive conduct. That wording reflected the account given in the High Court’s interim judgment of 25 June 2024, [2024] EWHC 1627 (Ch). The final judgment following the full trial gives a more detailed picture: it records that few of the incidents collated by Thomas Clarke had triggered a grievance or disciplinary process and that Clarke played an active role in identifying incidents and gathering evidence. The article has been amended to reflect the final judgment and to clarify several of the court’s findings on the individual incidents.
Sources
Court Judgments
Trial Reporting and Court Filings
Car Dealer Magazine — Peter Waddell v used car dealer Big Motoring World: What happens next?
The Guardian — Used-car firm boss was properly ousted but investor acted unfairly, judge rules
This article is part of the Big4News Case Watch series.
About Claudine Cassar
I’m a corporate anthropologist and former Deloitte equity partner. I sold my technology business to Deloitte in 2016 and led the Malta Consulting team for five years. I am the founder and editor of Big4News, which provides independent, clear analysis of PwC, Deloitte, EY, and KPMG — free from corporate spin.
Find me on LinkedIn, X, Instagram, or my author website.
Feel free to reply to this newsletter — I read every reply.