The company which was formed to combine one party’s expertise in the manufacturing of precision bellows with the general experience of two others in financial, commercial and industrial matters. For several years the company’s affairs had worked smoothly and prospered until in a spirit of mutual recrimination, at an extraordinary general meeting two of the directors, the plaintiff minority shareholders were removed. The majority consented to an order to purchase the minority interests, and the parties asked the court to settle the price. The judge had ordered payment of the value of the shares pro rata, without deduction of the usual element for the fact that they were minority shareholdings. The majority appealed.
Held: In acting under the Act, the judge was exercising an unfettered discretion. He had only to do what he thought just and equitable in the circumstances to remedy the fault. The appropriate remedy was one which would ‘put right and cure for the future the unfair prejudice which the petitioner has suffered at the hands of the other shareholders of the company.’ He had properly allowed for the fact that the business had developed from a quasi-partnership. The fact that the order was made by consent created no inference that an open market value would be used.
Oliver LJ
[1986] Ch 658, [1985] 3 All ER 523
Companies Act 1985 75(3) 74(4)(d)
England and Wales
Citing:
Applied – Dean v Prince CA 1954
The court had criticised an auditors’ valuation of a company’s shares.
Held: The criticism was not correct. However. if the court was satisfied that the valuation was made under a mistake, it would not be binding on the parties.
Denning . .
Appeal from – In re Bird Precision Bellows Ltd ChD 1984
The court considered the method of valuation of a minority shareholding in a forced purchase by the other shareholders. Nourse J said: ‘I would expect that in a majority of cases where purchase orders are made under section 75 in relation to . .
Cited by:
Cited – CVC/Opportunity Equity Partners Limited and Opportunity Invest II Limited v Luis Roberto Demarco Almeida PC 21-Mar-2002
(Cayman Islands) The respondent was a minority shareholder. An offer was made to buy out his interest. He petitioned for the winding up of the company on the just and equitable ground. The claimants obtained an injunction to prevent him doing so, . .
Cited – Grace v Biagioli and others CA 4-Nov-2005
The petitioner complained that he had first been removed as director, and that the remaining directors had misdescribed the company’s profits and paid those profits to themselves as management expenses and in breach of a resolution requiring an . .
Cited – G v G and Another FdNI 25-Oct-2003
There had been a long but argumentative marriage, and the parties disputed distribution of the assets on an ancillary relief application.
Held: The husband could not claim to discount shareholdings as a minority shareholding where he also . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 22 January 2022; Ref: scu.182784