Delighted Client | Shareholder Dispute Resolved
Resolving shareholder disputes and contract disputes can be complicated and contentious, yet it also offers opportunities for innovative solutions. Over the years, we have assisted commercial enterprises in all aspects of dispute resolution to help them avoid prolonged litigation.
Our 25 years of experience has taught us that each contract dispute is different. Whether dealing with a breach of contract or unclear terms, these disputes can be both complex and disruptive.
In this article, we explore a recent successful resolution to a long-standing dispute arising from a substantial financial investment made many years ago.
Stuart Southall of KANGS briefly outlines the dispute and the successful outcome achieved.
The Background to the Shareholder Dispute
Our client invested a significant amount of money, approximately twenty years ago, in a company which traded in the audio-visual industry and was owned by the defendant.
Two formal Agreements recorded the terms which included:
- the extent of the investment,
- our client’s entitlement to a 7.5% shareholding in the company.
Additionally, it was verbally agreed between the parties that the shares would be held on trust for our client by the defendant who was endeavouring to sell the company.
The defendant represented to our client that this arrangement would not only facilitate a more efficient sale but would provide him with the opportunity to claim Entrepreneurs’ Relief (now called Business Asset Disposal Relief) to reduce his Capital Gains Tax liability upon the sale's completion.
Due to the defendant's failure to fulfil the agreed terms, our client issued High Court proceedings seeking;
- a declaration that the shares were held on trust,
- an order collapsing the trust,
- an injunction restraining the defendant from dealing with the shares,
- payment by the company of the sum due by way of dividends since 2002,
- a declaration confirming our client’s entitlement to 7.5% of the proceeds of any sale of the company,
- damages for Breach of Contract and Trust,
- interest pursuant to section 35A of the Senior Court Act 1981.
The Favourable Settlement
Following detailed discussions which we conducted with the defendant’s solicitors, the dispute was resolved in a manner whereby our client:
- would receive all dividends due since 2002, within twenty-eight days of execution of the Settlement Deed,
- would formally be recorded as a 7.5% shareholder of the company,
- would receive all future dividends as and when payable,
- would be reimbursed, in-part, for the legal fees he has incurred.
Naturally, having experienced a great deal of uncertainty for so many years, our client was delighted that the matter had been resolved to his total satisfaction.
How Can We Assist?
Our Civil Disputes Team provides daily assistance to clients, whether they are claimants or defendants, in resolving all types of disputes, including shareholder disputes.
Our experienced solicitors and mediators offer strategic guidance and effective solutions for navigating complex disputes, from negotiations and mediations to arbitration and litigation.
We represent individuals, companies of any size, and their directors or officers in disputes of any nature or size. We leverage our deep expertise to resolve conflicts efficiently while preserving business relationships.
Whether you are dealing with internal disputes, regulatory challenges, or commercial conflicts, we are here to help. If we can be of assistance, we would be delighted to hear from you, simply contact us using the details below:
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through video conferencing or telephone.
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