We see a large number of shareholder disputes, in particular where allegations of unfair prejudice are being made by minority shareholders.
In shareholder disputes, as well as partnership and franchise disputes, it is often necessary to prepare a business valuation as the ultimate resolution of the dispute is likely to involve the sale or transfer of shares or entitlement to business value.
We work closely with our clients, instructing solicitors and other advisers to understand the basis of any claim and gain a detailed understanding of the business. Often it is necessary to consider how the fortunes of the business would differ in the absence of certain actions by the defendant. In these situations, we focus on understanding how the actions of the defendant have impacted the business and its value.
It is beneficial for us to be involved in shareholder, partnership and franchise disputes as early as possible. The aim for parties involved in many disputes is to settle the case before court proceedings move to trial. Our early involvement ensures that settlement negotiations are undertaken with a clear understanding of the financial amount at stake. We can also assist in claim formulation and in understanding the financial information required to support a claim.
Should proceedings reach court we provide an expert report and expert testimony.
Case examples:
Valuation of companies and trademark for mediation in unfair prejudice
Appointed by the defendant, the majority shareholder, in a claim for unfair prejudice brought by the minority shareholder of three companies involved in hair dressing and producing branded hair products in the name of the majority shareholder. We were required to value both the businesses involved and a trademark held by one of the companies. Our work was used to inform the parties at a mediation which was ultimately successful in resolving the dispute.
Unfair prejudice between siblings
Appointed by the claimant to quantify the amount of personal expenditure incurred by a shareholder/director in a number of property development companies owned equally by two brothers. We were required to analyse bank and credit cards statements spanning a period of ten years and to calculate the current value of the companies. The matter settled on the third day at court.
Loss due to diversion of profits
Acting as expert for two defendant shareholders in response to a claim that the core operations of a business had been diverted to a new company to the detriment of the claimant third shareholder. We reported on the actual losses incurred, restating the accounts prepared to unwind transactions and remove the impact of various actions taken by the parties. Our view was that the claim being made was of minimal value.