Re Edwardian Group Ltd
Claim for relief under sections 994-996 of the Companies Act 2006 on the ground that the affairs of the Company have been and are being conducted in a manner unfairly prejudicial to their interests as members of the Company.
Held: The misleading and inadequate terms in which the shareholders had been informed of certain findings of the company had been unfairly prejudicial to all of the shareholders, as being contrary to the good administration of the company and the interests of the shareholders in having matters of complaint about a director of the company fairly and fully investigated and reported on.
Fancourt J rejected the contention that since the relevant breaches of fiduciary duty had caused no loss to the company, the misconduct of the company’s affairs was not unfairly prejudicial to the interests of the shareholders generally, or to the petitioners in particular. By their very nature, the breaches of duty had caused all of the shareholders prejudice, in that the respondent was wrongly putting himself in a position where his duty to the shareholders of the company conflicted with his own interests, and was then preferring his own interests. ‘That kind of conflict is corrosive of good administration and trust between shareholders and directors. Further, the prejudice was by its nature unfair. The members did not know of [the chief executive officer’s] personal interest: they were unaware of the undisclosed conflict that the CEO of the Company continued to have. They were deprived of the right to give or refuse consent to [him] taking the opportunity for his personal benefit.’
Fancourt J
[2018] EWHC 1715 (Ch)
Bailii
England and Wales
Cited by:
Cited – Macom Gmbh v Bozeat and Others ChD 21-Jun-2021
Order regulating company’s affairs
COMPANY – Unfair prejudice – Petitioner 60% shareholder – Respondents 40% shareholders – Alleged breaches of director’s duties and failures to observe Shareholders’ Agreement – Undermining company’s corporate governance – Appropriate remedy – . .
These lists may be incomplete.
Updated: 10 July 2021; Ref: scu.619892