Shareholder Disputes

Whether you have fallen out with a fellow director or shareholder or are a minority shareholder whose interests are being prejudiced by the majority shareholder, we have the skill and experience to protect your interests and find the best legal and commercial solution.

Shareholder disputes can be stressful and expensive often damaging the company itself and with the outcome uncertain, dependent on many factors as well as legal rights. We have the experience to negotiate the best way out or to advise on the best way to use the courts to protect your position.

Many shareholder and director disputes arise because there is either no shareholder agreement or an inadequate shareholder agreement and/or where the company's articles of association are standard. In all these situations, minority shareholders are left legally exposed.

Our specialist shareholder and director dispute lawyers have a wealth of knowledge and expertise. Please get in touch for a free consultation.

What causes shareholder disputes?

Often, the cause of disputes is where a shareholder is also a director and is abusing his or her powers as a director. This can be withholding information from minority shareholders, manipulating dividends or where majority shareholders act in ways that only benefits them, using the Board of directors to achieve this. Situations where shares are owned 50:50 and there is deadlock are also particularly difficult.

How we can help

Our commercial litigation team has experience in a wide range of shareholder disputes, including:

• Where there is deadlock where the company is 50:50 owned.

• Where directors have breached their fiduciary duties.

• Disputes on the strategy and running of the company.

• Removing directors.

• Issues concerning directors defrauding the company of funds or assets.

• Minority shareholders not being treated fairly.

• Unpaid dividends or disagreement about dividend policy.

• Where shareholders are not given access to information such as management accounts.

• Unfair prejudice claims.

• Derivative claims.

Possible outcomes with a shareholder dispute

The courts have wide powers on remedies and outcomes if a shareholder dispute goes to court. Most disputes are resolved by negotiation and settlement. Possible outcomes, either by court order or out of court resolution include :-

• A buyback of shares from one of the shareholders who exits the company

• Agreement to ensure increased protection for the minority shareholders and restricting the powers of directors

• The company is wound up or sold

• Damages for the shareholder who has been prejudiced (proving loss will be necessary if the court is to award damages)