Individuals involved in small and managed businesses can often find that they have a number of different relationships. They may be a shareholder, a Director, an employee, a lender, a guarantor. Sometimes they may also be the landlord. Their shareholders and/or Directors fall out and consequence can be the termination of an employment contract.
The rights of a shareholder can depend on a number of factors:
1. The articles of association.
2. The shareholder’s agreement (if any).
3. Director service contract.
4. The number of shareholders in the business and/or the number of shares that the individual himself might hold.
- Shareholder Disputes - First Steps
- Boardroom Disputes 1
- Boardroom Disputes 2
- Boardroom Disputes 3
- Boardroom Disputes - Deadlock
- Four Reasons to Avoid a Piecemeal Approach to Resolving Shareholder Disputes
- 10 practical steps to take in a shareholder dispute
- What is a reasonable offer to pay for shares?
- Valuing shares in a family business
Examples of recent work includes:
- Advising client as to options available in connection with a dispute with the other main shareholder who clearly acted in conflict of interest with the company taking external appointments and diverting business to a competitor company and resolving the dispute by means of share transfer agreement on term.
- Regularly advising shareholders who are in dispute on options for resolving that dispute and then on the terms for purchasing shares from or selling shares to the other(s) and related documents.
- We successfully concluded a dispute through the use of mediation, for a former shareholder and partner arising out of a self-drafted termination agreement.
- We successfully concluded a dispute for a shareholder/director who had been excluded from the business but still retained a significant minority interest in two group companies. The dispute was resolved through mediation leading to a buyback of the shares and related agreements involving future trade.
- Advising shareholder on potential claim against director arising from director taking unilateral action clearly not in the best interests of the company
- Advice to minority shareholder in respect of his rights within the company and negotiating the terms for him to sell his shares;
- Advising client as to options available in connection with a dispute with the other main shareholder who clearly acted in conflict of interest with the company taking external appointments and diverting business to a competitor company, but where business potentially trading insolvently and resolving the dispute by means of share transfer agreement on terms.
- Resolution of a dispute between shareholders pursuant to a shareholders’ agreement; operating put or call options resulting in the purchase of shares;
- Drafting SPA dealing with buyout of shares on basis of instalments related to performance of business
- Advising on investigation and potential fraud claims against former director/shareholder eventually leading to a recovery of the shares and a resolution of the dispute. Investigating the fraudulent activity of the former shareholder/director and pursuing claims for compensation.
- Urgent advice to director/shareholder/employee as to whether he could leave the Company and allege constructive dismissal in order to take the main customer and set up in competition. Client achieved successful exit from his previous business and avoided injunction proceedings.
- Advising shareholder/director/employee on various claims arising following her departure from the Company; issuing Tribunal proceedings to protect her position, but achieving satisfactory settlement through negotiation, and advising on SPA.
- Advice to shareholders as to ways of approaching dispute with fellow shareholder involving potential claims against him as director for diverting business from the Company, but resolved by agreeing price for buying out shares.
- Advising on dispute between shareholders. Achieving a quick settlement by taking active role in the negotiations rather than threatening proceedings.
- Advising on SPA involving buyout of departing shareholder for deferred consideration
- Advising on terms of an exit from a LLP;
- Pursuing claim against a director/shareholder for the recovery of an unauthorised director’s loan.
- Advice to shareholder/director/employee on best means to extricate herself from failing business without ongoing liability;
- Advice to minority shareholder/director about extent of his rights under complex shareholder agreement
- Obtaining substantial payment for shares for a shareholder who had been excluded from the business
- Dispute with other shareholders over the manner in which company being operated following sale of business; leading to agreed exit terms
- Defending a Director of a company which had gone into liquidation from a claim by the Liquidator for, amongst other things recovery of losses alleged to have arisen as a result of the sale of business assets at an undervalue prior to Liquidation. Settled through negotiation, at a level allowing client to keep a home for his family.
- Advising remaining shareholders in negotiations with a shareholder/director who left without giving notice.
- Advising 50% shareholder in dispute over the future of the business when the other shareholder wished to retire.