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In todays AFR:

Henry Morgan founder Stuart McAuliffe battled legal dispute
The founder of the Henry Morgan investment group was named as a defendant in a discontinued court action that reveals a dispute with a former business partner.
According to a claim filed in the Brisbane District Court in January 2016, an entity named Anderson Capital sought more than $600,000 in damages (including interest) from defendants Stuart McAuliffe, Brett McAuliffe and McAuliffe Partners.
The action was withdrawn in May 2017. Stuart McAuliffe is the head of the fast-growing John Bridgeman-linked investment companies.
The agreed facts in the dispute are that a former Bond University student of Stuart McAuliffe's, William James Anderson, in early 2010 negotiated to invest in McAuliffe Partners, a private equity style firm with a return target of 25 per cent. The firm's most ambitious prize was bringing the Carl's Jr burger chain to Australia, but it failed to close a deal.

Stuart McAuliffe owned 50 per cent of McAuliffe Partners, according to the claim; Brett McAuliffe was a director and shareholder until 2010. Mr Anderson was the sole director and shareholder of Anderson Capital and invested $450,000 in McAuliffe Partners.

Beyond that, the parties disputed almost everything. None of the allegations were examined in court because the action was discontinued. Comment was sought from Mr Anderson's solicitor; Stuart McAuliffe said the action was without merit and as such, the McAuliffes represented themselves.
The claim alleges that Stuart McAuliffe invited Mr Anderson to invest in McAuliffe Partners in 2010; Mr McAuliffe disputes this and says it was Mr Anderson who pursued him. The claim further alleges that Stuart McAuliffe told Mr Anderson that McAuliffe Partners had no debt and owned seven assets plus other investments collectively worth more than $5 million.
Mr Anderson also makes the disputed allegation that McAuliffe Partners really owned only two assets and his first equity investment was not worth $175,000.
Stuart McAuliffe rejected representing that the business owned $5 million of assets. He countered that McAuliffe Partners was just a holding company with three investments at the time, and the valuations submitted by Mr Anderson in the claim were more correctly framed as "asking prices" and a draft, which the plaintiff was aware of.

But negotiations to snare the Carl's Jr deal were already under way, according to the defence, and this business was what Mr Anderson appeared most interested in.
Mr Anderson would also become a director of McAuliffe Partners and the business would pay him $1600 a month in consulting fees to meet loan repayments, the claim contends.
Stuart McAuliffe argued that Mr Anderson "cherry picked" specific businesses for transfer into McAuliffe Partners for $450,000, a 50 per cent stake. Stuart and Brett McAuliffe thought this was because Mr Anderson only liked certain assets. They later concluded it was for financial reasons. Stuart McAuliffe says he had no idea Mr Anderson's stake was financed.
Brett McAuliffe showed an interest in remaining invested to pursue the Carl's Jr idea, but didn't have the resources for such a large investment. Neither did Mr Anderson, the defence alleges, "although he held himself out as having them" including "presenting false documents to Carl's Jr executives", a claim Mr Anderson disputes in his reply.

In July 2010, Mr McAuliffe indicated to Mr Anderson that he planned to restructure McAuliffe Partners' investments, and offer $1.5 million to Brett McAuliffe for his stake; Mr Anderson was offered alternatively half of that stake, all of it, or part of it, according to the plaintiff's version of events.
Mr Anderson would be given a "VP position". At a subsequent meeting, Mr Anderson verbally agreed to assume 50 per cent of McAuliffe Partners from Brett McAuliffe for $275,000. This time, McAuliffe Partners would pay $1600 a month in dividends so Mr Anderson could repay his loan in lieu of the previous consultancy agreement.
The McAuliffes said Mr Anderson backflipped on negotiations and the final deal bore "no resemblance" and "radically" differed to the initial multi-asset proposal. Further, dividends were not discussed.
The claim again alleges that, contrary to the representations said to have been made, the only assets McAuliffe Partners owned were 20 per cent of a business called Ashdale Integrity Solutions and 100 per cent of a business called Busy Bloke; it never declared a dividend; and Mr Anderson's subsequent stake was not worth the $275,000.

In the defence filed in March 2016 by the McAuliffes and McAuliffe Partners, they repeatedly say this is untrue, and redundant because Mr Anderson did not want those assets, and could have been disproven by an ASIC search.
Besides, three months after the deal was struck, Stuart McAuliffe sold 5 per cent of his stake in McAuliffe Partners for $250,000, valuing the business at $5 million, he claims. (In a separate reply filed to the court, Mr Anderson said this sale was to a related party and unreliable, nor did he have any idea this happened).
Stuart McAuliffe met with Mr Anderson's accountant, BDO Kendalls, which convinced him Mr Anderson was capable of completing the Carl's Jr deal. Stuart McAuliffe had already met with Carl's Jr executives via the US embassy and he was invited to the US to finalise the deal.
Stuart McAuliffe took five people at his own expense to Orange County; he claims Mr Anderson wanted to come too and was presented to Carl's Jr as the vice-president of finance. After three days the president of Carl's Jr international joined the talks.

The deal was upgraded to 25 restaurants, which Stuart McAuliffe says Mr Anderson was on board with, and required funding of $25 million or $12.5 million each. Mr Anderson subsequently advocated for 50 restaurants, according to the defence.
Later, a consultant linked to Carl's Jr took Stuart McAuliffe aside. "Stuart, there is a shortfall in James' asset numbers," the consultant allegedly said, to which Stuart McAuliffe asked, "how much?" "Above $10 million," the consultant replied, adding, "this could jeopardise the deal".
Stuart McAuliffe confronted Mr Anderson, who said his uncle took some money out of his account, according to Stuart McAuliffe's version of events, and this was not temporary. But McAuliffe Partners had for all intents and purposes already obtained the rights to 50 Carl's Jr restaurants, Stuart McAuliffe believed.
Stuart McAuliffe told the consultant he would go ahead regardless and the contract proceedings continued, the defence states.
The defence document asserts that at a business breakfast meeting set for 9am in the Orange County Hyatt, Mr Anderson failed to turn up, and Mr McAuliffe was told by hotel reception he had already checked out. Mr Anderson was headed to Los Angeles to party, he allegedly later admitted to Mr McAuliffe.
Stuart McAuliffe upon returning home found other willing investors in the burger chain but stated that Mr Anderson was "reluctant" to reduce his equity, and no alternative partner could be brought in.
This wasn't the end of the relationship. Stuart McAuliffe and Mr Anderson each invested $200,000 in a hedge fund from which Mr Anderson extracted profit of more than $350,000, Stuart McAuliffe attests, despite allegedly having done no work and contributed no costs.
On March 16, 2014 Mr Anderson sent a text message to Stuart McAuliffe that he had "withdrawn 100 per cent" and "at the right time", although the unnamed vehicle appreciated a further 30 per cent before an initial public offering, according to the defence.

The defendants expressly denied any accusations of breach of contract or the Trade Practices Act, and submitted that Mr Anderson suffered no losses.