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The founder of London’s Sherlock Holmes museum is embroiled in a “catastrophic” court battle over claims he passed the £20million business to his wife to avoid paying a debt to his sister.
Baker Street Museum businessman John Adenietz has been fighting a “catastrophic” battle with his family, including sister Linda Riley, over ownership of the “gold mine” tourist attraction for more than 13 years.
The dispute – which has appeared in the High Court more than 100 times in its various incarnations and delivered at least a dozen judgments – is also raging over properties owned by the family and the care of his mother.
Now in a new branch of huge litigation, Mr Adenienza is accused of passing his business – which he says is worth £20million – to his wife so that he could deliberately thwart his sister’s efforts to repay a debt of almost £500,000 which she says she owes.
However, Mr Adenietz – who has described the family court battle as “catastrophic” – disputes that he is owed that much and denies that his gifts of company shares to his wife, Andrea von Ehrenstein, were motivated by a desire to thwart court claims against him.
The Sherlock Holmes Museum was founded in 1989 in Baker Street, near Marylebone station, with Mr Adenietz, 69, claiming it to be his brainchild.
It proved extremely successful, with lawyers telling the court during a hearing in 2022 that it was a “gold mine”, generating huge profits in ticket sales.
But the family fell apart in 2012 when relations broke down between Mr Edenientz, his mother and siblings, resulting in a flurry of legal conflicts, with the family arguing over the £1.8million sum owed to the museum, the ownership and possession of various properties and the care of their elderly mother.
The fight has been variously described by judges who have dealt with it as “poisonous,” “heartbreaking” and “tragic” – with “bitterness and contempt” between various members of the family.
The initial dispute over ownership of the museum was resolved in 2013, when Mr Adenietz admitted being the sole owner of the museum’s shares, with his sisters Mrs Riley and Jenny Decoteau each receiving £1 million.
But he has since returned to court on dozens of occasions in further disputes following a family feud.
In his ruling last week, Master Bowles said both Mr Adenietz and Ms Riley had “successes and setbacks” during the lengthy litigation.
“Although … each had the benefit of costs orders in their favour, the net result, as Ms Riley put forward, is that Mr Adeninz owes Ms Riley £493,828.21 in costs, including interest on that sum and that money, in full, is due from January 2023 and is completely unpaid,” he said.
“Although that figure is not agreed upon, or accepted by Mr Adenietz, it appears to be accepted that, at a minimum, unpaid costs total £300,625.24.”
He said the matter was brought back to court when Ms. Riley sued her brother again, claiming that his decision to transfer the museum to his wife was an attempt to avoid paying her bills.
“It is Ms Riley’s claim that the transfer and subsequent re-transfer of the RollerTeam shares to Ms von Ehrenstein… were transactions at an undervalue and were carried out by Mr Adenietz for the purpose of placing his shares in RollerTeam out of the reach of Ms Riley or other persons who had, or at some time might have, claims against him,” the judge said.
However, Mr Adenietz tried to have the claim dismissed before trial, arguing that it was brought too late after the transfer was made.
He also insisted that he was acting legitimately by transferring all his shares to his wife in 2014, then transferring half back, then transferring them to her again in 2016.
He claimed that the transfers occurred because he had just got married and was planning to retire and wanted to leave the business in safer hands.
“The purpose of the gift, as he said, was ‘for posterity’, to allow the Sherlock Holmes Museum to continue after his death and, at the age of 58, to allow him to retire, knowing that the museum would be in the safe hands of his wife and his stepdaughter, Laura, and in the hope … that his wife, as she had allegedly promised, would hold the shares in trust for their son,” the judge said.
But for Ms Riley, barrister Mark James insisted she had a good case to argue that the shares were not transferred for that reason, but to thwart the claims against her.
Alternatively, the shares were transferred, but only on paper, with Mr Edenientz remaining their beneficial owner, he argued.
The judge said: “Mr James’s overall submission is that, given that it is Mr Adenietz’s own proud claim that it was he who, through Rollerteam, developed the Sherlock Holmes Museum into a hugely successful business, it is highly unlikely that he should have given it all away, even to his wife, and left himself to live entirely on her philanthropy.
“It is highly likely that, in fact and despite the share transfer, he continues to control RollerTeam as the beneficial owner of its shares.
“Additionally, Mr James points to the fact that, in March 2017…Mr Adenietz and Ms von Ahrenstein moved out of the jurisdiction to Germany, where they now reside permanently, and did so even though they had recently renewed their tenancy of a four-bedroom family home in Highgate.
“They believe that going to Germany was part of a wider pattern of behaviour, of which the share transfer was a part, whereby Mr Adenietz tried to make himself ‘judgment proof’, or, at least, suffered serious difficulties in relation to the enforcement of any judgment.”
However, Mr Adenietz pointed to the fact that he had paid off the outstanding balance since moving to Germany as evidence that the move and the share transfer had nothing to do with making himself “judgment proof”.
Rejecting Mr Adenientz’s bid to dismiss his sister’s claims about the shares, the judge said: “Although I do not consider Ms Riley’s claims the strongest, I do not consider them unrealistic, or fanciful, such as to entitle Mr Adenientz to summary judgment.
“Although, at trial, the burden will be on Ms. Riley to articulate her case, at this stage the burden is on Mr. Adenientz to convince the court that those claims have no realistic, or serious, prospect of success. Mr. Adenientz has not met that burden.”
He added: “I think Mr James has a point that it is unlikely that Mr Adenietz, who has built up the Rollerteam business, should, in truth, give up any interest in that business, or partake, as he now does, of being entirely dependent on the goodwill of his wife for his living.”
However, he said that during the full hearing the judge would have to decide what Mr Adenietz’s true intentions were in transferring the company to his wife.
He concluded: “I am in no way attempting to predict the likely outcome of the necessary investigation into Mr Adenietz’s intentions with respect to the transfer and beneficial ownership of the RollerTeam shares, which will be at trial.”
The case will return to court for a full hearing at a later date.