Unfair Prejudice

We were approached by a minority shareholder due to a breakdown in his relationship with his other directors and majority shareholders. The majority shareholders were marginalising the involvement of the minority shareholder at director level and engaging in conduct which saw misuse of company monies, inflated salaries (to the majority shareholders), dilution of power at board level and an intended further appointment to the board of a director from a competing business.

Shareholder disputes are usually described as a business divorce and this case was no different. With our involvement an unfair prejudice petition, along with an injunction was issued to preserve the status quo of the company and its assets.

The difficulty with shareholder disputes is the untangling of the business affairs, which not only involves reaching terms on purchase of the shares, but a valuation of the business, the impact of the prejudicial conduct complained of and employment rights.

These claims are often extremely personal to those involved, whose income and livelihoods have often been suppressed by the conduct of the majority controlling shareholders. In this case, with our support and involvement, the minority shareholders have been able to fight back against this oppressive conduct and claims are being pursued to recover substantial damages.