Shareholder Disputes Case Studies

Director negotiating to purchase a site for his own personal benefit

We were instructed to act for two out of three directors and shareholders of a family run construction company following the discovery that the third director, with responsibility for identifying potential development sites, had negotiated to purchase a site for his personal benefit.

What effects did this have on the business:

The dispute raised deep rooted relationship issues in addition to the legal implications of the actions of the director and minority shareholder.


Our strategy:

Legal proceedings were inevitable but, simultaneously, determined attempts were made to resolve the dispute away from the court. Mediation was attempted on two separate occasions but without achieving final agreement. 

 

The outcome:

Eventually, when the trial was imminent, settlement was concluded and the minority shareholder departed the company on terms less favourable than those he had rejected during the course of the mediation.

 
Prejudice Allegations

​We were instructed to act for three out of four corporate shareholders and directors of a specialist motor sport company following allegations that the three directors were prejudicing the interests of the fourth shareholder. They refused to refund airline expenses in excess of £75,000.00, allegedly incurred for business purposes and were making undisclosed profits from their other enterprises, to the disadvantage of the motor sport company.

What effects did this have on the business:

The specious allegation of the fourth defendant nonetheless caused chaos and put the business into jeopardy; the fourth shareholder and former director was determined to achieve a sale of its shares and started proceedings.


Our strategy:

In the proceedings the fourth shareholder was faced with either having to provide security for costs or the opportunity to negotiate a settlement at a mediation. All shareholders chose a mediation where, despite emotions running high, a rational and cost effective resolution was agreed.

 

The outcome:

The result was that the specialist motor sport company was able to carry on doing its world beating alloy and part design work. Special thanks to counsel and the mediator involved (you know who you are).

If you need advice and help with a dispute, contact us today.

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