Briggs J recognised that the court has very wide powers under s. 996, and referred to the submission that it would be wrong in principle for the court to perpetuate a dysfunctional relationship between the parties into the indefinite future, and that, if minded to grant relief at all, the court should do so by ordering a purchase of the petitioner’s shares at a value calculated by reference to his dividend rights under the 1993 bargain, and on the assumption that the depletion in the shareholders’ funds was made good: ‘I recognise of course that an order for the purchase of an unfairly prejudiced shareholder’s shares, either by the other shareholders or by the company, has become almost the norm in cases where unfair prejudice is established in relation to the affairs of private companies. It is, nonetheless, not the relief sought by the petition, and the submission that (if otherwise minded to grant relief) I should do so by way of buy-out rather than, in effect, specific performance of the 1993 bargain plus compensation for breach, was made only in closing submissions. The result is that the potentially difficult and expensive process of valuing Joe’s shares on the appropriate assumptions has yet even to begin.
More generally I consider that the court should not close its mind to a bespoke solution to a particular form of unfair prejudice, other than by ordering a buy-out, at least in cases where a remedy that leaves the warring parties as shareholders in the same company does not of itself perpetuate an impossible relationship of joint management, or otherwise risk aggravating an existing dispute.’
Briggs J
[2012] EWHC 1613 (Ch)
Companies Act 2006 996
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.663867 br>