14:35

New Balance figures 'looked unreasonable'

Mr Morpuss suggests the effect of New Balance employees “closing their minds” to reality is that Nike are “chased away” and Liverpool are stuck in the contract.

GM: “If New Balance went into this without having any reasonable grounds it could meet the clause then it has not been faithful to the bargain.”



Judge Teare interjects: “Again one has to be very careful as to what you mean by that… a person who has grounds but they turn out to be inadequate grounds, has no reasonable grounds….



“If a person does not care whether he can provide the 6,000 or not but simply says yes I can….he possibly is acting in a commercially unacceptable way because he has no belief in his ability to do it.”



Judge Teare highlights that New Balance had a “limited amount of time” to meet the offer presented by Nike.



The company received the Nike contract in August.

“Is it really that unreasonable for them to rely on the evidence their regional managers have provided them?”

Mr Morpuss says the figures “looked unreasonable” and the problems were known to New Balance by August 16.



He says senior New Balance managers were aware of that.

Judge Teare asks him to clarify the decisions were taken by senior New Balance executives including CEO Joe Preston, vice president Chris Davis and manager of global football Kenny McCallum.

Mr Morpuss says: “The reality of what happened here is that New Balance went out to create a careful paper trail to show that they could match the 6,000….undoubtedly they had litigation in mind, there are redactions everywhere…

“They went out to create a careful paper trail and that failed.”

Judge Teare suggests they “certainly had one eye on litigation in the future, because if they knew they failed this obligation they would be held to it...there is nothing wrong with that.”

Mr Morpuss says “They set out to go and do an exercise to show that they could match the 6,000 doors…

Judge Teare suggests there is “Nothing improper” about that.”

Mr Morpuss says: “With respect I am not saying there is anything proper, but one looks at where they started and one looks at where they end up.”

He suggests: “We are now in a position where the evidence from Mr Davis is that none of that (the paper trail) matters because he can just wave his hands and match 6,000 doors.”