Shareholder Disputes Solicitors in London and Essex
Unfortunately, shareholder disputes are common and usually arise due to a relationship breakdown between the shareholders (who may also be the managers or directors) of the company. A relationship breakdown can occur for a variety of reasons, such as differences of opinion, ego or power struggles, deadlock, conflicts of interest, the payment of dividends (or lack thereof), unfairly prejudicial treatment of minority shareholders, unlawful withdrawal of funds or concerns about fraud or dishonesty.
Shareholder disputes are complicated and expensive, and can have serious consequences on the individuals and businesses involved. We act for majority and minority shareholders, as well as directors and other interested parties, in shareholder disputes. We will advise you on the best strategy for resolving your case in a way that suits your best interests.
In many cases, shareholder disputes can be resolved without the need for a court hearing, although on other occasions resolution by the court is necessary. Where court proceedings are necessary, it is normally the minority shareholder taking action against the majority as the minority does not hold control of the company and may even have been ejected or excluded from their involvement in it.
This type of situation leads to the consideration of making an unfair prejudice petition under section 994 of the Companies Act 2006. If a petitioner succeeds in proving unfairly prejudicial treatment, the court has a very wide discretion and has power to order one party to buy the other out. If a buy-out order is made, the price of the buy-out would usually be determined by an expert valuer. This gives rise to a number of legal issues being contested in court proceedings including whether or not to order a buy-out or, if an order is made, the date of valuation of the company’s shares and the discretion of the valuer.
In some cases, a buy-out is not an option (e.g. because the funds are not available) and the court may instead order a winding-up of the company. This involves the settling of liabilities and distribution of any surplus assets to the shareholders. A winding-up of the company is very rarely an ideal solution due to the expense involved and the fact that, usually, one or more of the shareholders wish to continue running the company.
We know – from experience – that an out-of-court settlement involving the buy-out of one party is frequently a much better solution to resolving the dispute. Accordingly we focus our initial advice on the options of settling the dispute e.g. by way of negotiation or other form of dispute resolution such as mediation.
Our unique selling point is that we understand what clients want from their lawyers. We will manage your transaction proactively, with careful attention to detail while never losing sight of the bigger picture.
We offer a range of pricing options and will be happy to discuss these with you. As a client-centred law firm, we will be transparent with you about our pricing and actively manage these in line with our agreements.
How we can help with Shareholder Disputes
One of the key preliminary questions in any shareholder dispute is to determine who is in legal control of the company? The answer is not always straightforward, but the starting point will always be to consider the ownership and management structure of the company and to review its constitutional documents i.e. the articles of association and any shareholders’ or other private agreement in place.
We will advise you on your legal position and the merits of your case. If necessary, we will instruct a barrister to provide a specialist opinion.
The legalities and procedure involved in a shareholder dispute is a complex and technical area. We are familiar with disputes of this nature and can advise you in a tactical and commercially-minded manner to advance your desired outcomes.
Whatever your situation, we can work with you to devise a plan to minimise the financial and emotional impact of your shareholder dispute.
Why you should instruct us for . matters
We put our clients at the centre of our thinking. It is our mission to create an effortless experience and, in return, we hope to create clients for life.
We strive to understand the specific needs of our clients and, using our knowledge and expertise, focus on delivering real-life and practical solutions.
An essential component of our business is being open, honest, and accountable with our clients, and operating at the highest professional standards.
We encourage our people to think creatively and imaginatively in the legal advice we give, as well as the way we provide services.