Unfair Prejudice - a flexible solution

“UNFAIR PREJUDICE” TO A SHAREHOLDER’S SHARES -

A shareholder has a number of options if he (or she) feels that he is being treated unfairly.

One of these is to present an "unfair prejudice" petition.

Recently, courts have made clear that their powers to make orders in relation to an unfair prejudice petition under s.994 and s. 996 of the Companies Act are broad and wide-ranging.

Phrases such as “the company’s affairs”, conducted” and “unfairly prejudicial” should be construed broadly by the court in deciding whether there has been unfair prejudice.

It is usual that a court makes a share purchase order by way of relief if such a petition is successful. However, recent case law makes clear that this is not the only remedy that can be granted. Relief can be granted that the petitioner has not even asked for, including in the form of a winding up order.

It is therefore well worth a chat with our solicitors who act in the area if you are a minority shareholder in a company and wish to do something about unfair treatment of you, or if you are a majority shareholder who would like advice on preventing such claims against the company.

Feel free to contact Richard Kerry on 0121 355 0011 richard.kerry@belllax.com if you would like any advice, or a further discussion.