Out-Law / Your Daily Need-To-Know

PwC is preparing to launch an action for hundreds of millions of pounds in damages against EE, O2 and Vodafone, accusing them of having forced retailer Phones4U out of business, the UK's Daily Telegraph has reported. 

The action relates to 2014 when the three telecoms companies stopped selling phones and contracts via the chain, sources told the Telegraph.

PwC will say that the three companies colluded in this move, which left Phones4U unable to service its debts to private equity owner BC Partners, the Telegraph said.

Any money raised by the damages will be used to pay the retailer's creditors including holders of £430 million in secured bonds, the newspaper said.

The action is based on an investigation by law firm Quinn Emmanuel Urquhart & Sullivan which has previously contacted the companies warning them of a potential claim, the Telegraph's sources said.

PwC and Phones4U creditors have also been working with another law firm, Brown Rudnick, on whether BC Partners or the retailer's management could be liable, the Telegraph said.

O2 and EE declined to comment, and Vodafone did not respond to a request. 

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