A nasty legal battle is brewing around U.K. phone brand Vertu

Vertu Signature Touch back camera

There are concerns over the future of British luxury smartphone manufacturer Vertu, following the takeover by Turkish exile businessman Hakan Uzan, reports of unpaid bills and wages, and growing fears over a legal fight that may end up ruining the company. It’s a drastically different picture than the one initially painted by Uzan himself, and in the announcement that TCL Communication has been brought in to produce tens of thousands of new devices with Vertu.

Concerns have been raised by staff at Vertu in the U.K., according to anonymous sources speaking to the Telegraph, including complaints wages are overdue, and pension contributions are being removed from salaries without being paid into retirement schemes. These grievances were listed to Vertu management in a letter, but no explanation was given. The newspaper says it has reviewed related documents and testimony from Vertu staff, both present and past. This is compounded by accusations that suppliers haven’t been paid since 2016.

Suppliers calling in debts apparently include Qualcomm and Microsoft, which sub-leases the buildings Vertu uses, after acquiring them when it acquired Nokia. Outstanding bills extend beyond Vertu’s technical partners and into waste management, pest control, and other property services, according to the Telegraph’s sources. Mr. Uzan promised to invest in Vertu when he took over, to allow the company to, “realize its full potential.”

Unfortunately, unpaid wages and bills may only be the start of Vertu’s problems. A legal fight between new owner Uzan and former owner Gary Chen, who managed the hedge fund which sold Vertu to Uzan earlier this year, is brewing. Chen claims he has not received payment from Uzan following completion of the sale, while Uzan claims the level of debt and other aspects of the business were concealed from him, and only became apparent after he took control. The pair are now threatening to sue each other, and there are worries Vertu will not survive if the lawsuits happen.

The last we heard from Vertu was the announcement TCL Communication had been enlisted to bring in advanced technology and build 30,000 new phones, in a deal worth $40 million. The news also shared that Vertu’s corporate offices had been relocated to France under the name Vertu AK France, through which Uzan’s representatives have been running the company.

We’ve contacted Vertu for comment on the report, and will update when we hear back.