Shareholder and Boardroom Disputes

"Kingsley Napley LLP is highlighted for its experience in cases involving failed investments, mis-selling, fraud, insolvency and directors' duties"

Legal 500, 2016

When individuals fall out in business it can have devastating consequences for the company, partnership or LLP. Our litigation team has extensive experience in resolving business disputes quickly and effectively. We recognise that boardroom disputes can be particularly fraught and stressful and we have the expertise to provide a bespoke service in times of crisis.

 Frequently asked questions
relating to
Shareholder and Boardroom Disputes  >

We combine advice about our clients’ legal rights and obligations, with strategic expertise, which is critical in any boardroom battle. We advise when and how to litigate or on alternative means of dispute resolution where appropriate, including arbitration, mediation and round table settlement discussions.

We act for shareholders, members, directors and companies (ranging from small privately-owned companies through to PLCs), and partners and LLPs in partnership in a wide range of disputes, including in the following areas:

  • Unfair prejudice petitions for and against minority shareholders
  • Acting for shareholders in relation to breaches of shareholder agreements
  • Bringing and defending derivative actions
  • Earn out disputes
  • Acting on behalf of shareholders to enforce their rights to purchase or sell shares under sale and purchase agreements
  • Breach of fiduciary duty claims for and against directors, partners and LLP members
  • Fraud related disputes for and against directors, partners and LLP members
  • Director misfeasance claims
  • Acting on behalf of directors defending disqualification proceedings
  • Representing individual partners and partnerships in issues arising out of the dissolution and termination of partnerships, including related partnership disputes about property and profit entitlements

Boardroom disputes are not unusual. In 2013, CEDR and the IFC Corporate Governance Group conducted a global survey of 191 directors and board members which revealed that 29.6% of respondents had experienced a boardroom dispute which affected the survival of the organisation and 42.8% reported that conflict had reduced the level of trust between board members.

We recognise that our commercial clients are concerned about the financial consequences of being involved in a dispute. We therefore provide clear costs advice and consider with our clients various litigation funding options. We also help our clients evaluate the commercial benefit of litigation against settlement at all stages of a dispute to enable them to make informed decisions for the good of their business interests. 

For more information, read our frequently asked questions on shareholder and boardroom disputes here.

WHAT CLIENTS AND DIRECTORIES HAVE SAID

"‘excellent-quality’ practice"

Legal 500 UK 2012

"...sensible, realistic view of cases - seizing only the points worth arguing..."

Chambers UK, A Client's Guide to the Legal Profession

 

"Real expertise across all levels, well led and offering practical advice with no histrionics or game playing."

Chambers UK, 2017

"The country's premier niche white-collar firm. They're very savvy and understand how the corporate world works."

Chambers UK, 2017

...sensible, realistic view of cases - seizing only the points worth arguing...

Chambers UK, A Client's Guide to the Legal Profession

‘excellent-quality’ practice

Legal 500 UK 2012

 

Latest blogs & news

“Lights. Camera. Action!” – Re Motion Picture Capital and standing for minority shareholders to bring unfair prejudice petitions

In the recent case of Re Motion Picture Capital Limited [2021] EWHC 2504 (Ch), the Court greenlit an unfair prejudice petition presented by a minority shareholder who no longer held shares in the relevant company at the time his petition was heard. The petitioner’s position was "Show me the money!", requesting an order that the company purchase his shares at a price reflecting the company’s value, even though his shares had already been transferred into the names of the company’s nominees.

The Court confirms the Legal Costs Principle in Shareholder Disputes

In the case of KOZA LTD and HAMDI IPEK –v- KOZA ALTIN IŞLETMELERI AS [2021] EWHC 786 (Ch), Mr Justice Trower awarded an injunction restraining Mr Ipek, Koza Ltd (“KL”)’s sole director, from causing KL to use its funds to pay legal costs in the litigation, which was in reality a shareholder dispute between Mr Ipek and Koza Altin Işletmeleri AS (“KAI”).  The decision upholds the ‘legal costs principle’ in company disputes, which provides that a company’s money should not be spent on disputes between shareholders.

Ignorance is bliss? Not for directors!

In the recent case of TMG Brokers Ltd (In Liquidation) (also known as: Baker v Staines) the High Court held a director of a company to be jointly and severally liable for payments made by his co-director out of the company’s bank account which were made without proper authority and amounted to  disguised distributions of capital. The fact that he had placed trust in the other director for the company's financial affairs did not excuse him from performing his duties.

One hand in the cookie jar: Fraud and directors’ duties in insolvency

What happens when a director commits fraud by misappropriating company assets?  Or what of the director who continues trading knowing that the company has no realistic prospect of paying its debts as and when they fall due? To whom does a director owe duties at that point and what recourse is there against that director? This article explores these questions.

Money, money, money: what are directors’ duties in respect of the company’s bank account?

Disputes between directors often arise because of, and/or result in, disputes about company money. Directors need to be alert to how they are required to act, particularly in times of conflict.

Can a De Facto Director be disqualified as a Director?

It is well known that directors owe duties to the company of which they are a director and, in certain circumstances, its shareholders, creditors and employees. Many people believe that if you have not been formally appointed as a director, i.e. you do not appear on Companies House records as a director, you will not owe the usual directors’ duties and, therefore, cannot be in breach of such duties or subject to sanctions for breach.

Directors’ communications with their solicitors: perhaps not as privileged as you think (Part 2)

In the recent case of Barrowfen Properties Ltd v (1) Girish Dahyabhai Patel (2) Stevens & Bolton LLP (3) Barrowfen Properties II [2020] EWHC 2536 (Ch), the High Court extended the iniquity exception to breaches of a director’s statutory duties.

The driving force fallacy

Court of Appeal overturns injunction in favour of son who sought to restrain his family from participating in the management of their caravan park business - Loveridge –v- Loveridge [2020] EWCA Civ 1104.

Simply Alarming: when might an unfair prejudice petition fail?

In the recent case of Simply Alarming Security Ltd [2020] 7 WLUK 330 the Court refused to order that the Respondent director/shareholder had to purchase the shares of a shareholder/former director (the Petitioner) who alleged that she had been the subject of unfairly prejudicial conduct by the Respondent. 

Stretching the limits of Directors’ personal liability for torts?

It is a sad reality that the Covid-19 Pandemic is likely to lead to a spike in the number of companies being put into insolvency.  This has the potential to leave parties with claims against those companies with a reduced prospect of full recovery, even if their claims are strong.  As a result, claimants may look for alternative targets, including ways in which they could sue directors personally. 

All swans are white….?

I have always had a soft spot for the Black Swan jurisdiction: nothing to do with the law, but because it reminds me of my previous study of philosophy and the use of “all swans are white” as an example of falsification theory.  

Company money should not be used to pay legal costs in disputes between shareholders

In the recent case of Michael Gott v Rune Hauge and ors [2020] EWHC 1152 (Ch) the court upheld the well-recognised principle of company law that a company’s money should not be used to pay legal costs in disputes between the company’s shareholders.

Unfair prejudice petitions: can a director’s breach of duty bar their claim?

Treating a director who is a minority shareholder fairly in both their involvement in the management of a company and in any offers to acquire their shares is of paramount importance to defeating an unfair prejudice petition.

Directors of a solvent company are under no duty to prioritise the interests of potential creditors when entering transactions, even where there is a recognised risk of insolvency

HENRY GEORGE DICKINSON (Claimant) v (1) NAL REALISATIONS (STAFFORDSHIRE) LTD (2) KEVIN JOHN HELLARD & GERALD KRASNER (JOINT LIQUIDATORS OF THE FIRST DEFENDANT) (Defendants) & JUDITH YAP DICKINSON (Third Party) & ROBERT WILLIAMSON (Fourth Party) [2017] EWHC 28 (Ch)

A director must exercise his/her powers only for a proper purpose

Many obligations are imposed on directors in exercising their duties.  A recent decision of the Supreme Court provides that when exercising your powers as a director you must always consider the actual purpose for which you propose to exercise those powers and ensure that purpose is proper.  It is not sufficient simply for directors to act honestly to promote the success of the company for the benefit of its members as a whole. 

Legal update: Former director liable for copyright infringement and breach of director’s duties despite delay in bringing claim

In the case of IT HUMAN RESOURCES PLC v DAVID LAND [2014] EWHC 3812, a former director was found to have infringed a company's copyright in a software system by providing it to a competitor without the company's consent. He thereby also breached his fiduciary duties as a director. Although the company's claims had been brought over six years after those events, they were not statute-barred because the company's knowledge of them had been delayed by the director's deliberate concealment.

Legal update: Businessman granted leave to serve injunction proceedings on Google out of the jurisdiction

Last Thursday, in the case of Hegglin v Google Inc. & ORS (2014) QBD, the High Court  granted a businessman leave to serve proceedings under the Data Protection Act 1998 out of the jurisdiction on Google, seeking injunctive relief in respect of defamatory comments posted on websites by an anonymous individual. 

Related pages

Shareholder and Boardroom Disputes FAQs

Our experts provide answers to the most frequently asked questions asked about shareholder and boardroom disputes

Civil Fraud and Investigations

The international nature of commerce and growing reliance on electronic communications mean that the number and value of fraud claims is rising.

Commercial and Contract Disputes

Corporate disputes can be stressful, disruptive and damaging. We provide tactical and strategic advice to businesses and individuals.

Dispute Resolution

Dealing with a dispute professionally and commercially takes skill. We assist and support our clients with both legal knowledge and strategy.

Financial Services Disputes

We represent individuals and businesses in high value and complex claims against banks and financial institutions.

Injunctions

If you need to prevent the loss of an asset, damage to reputation, or protect against personal harm, it may be necessary to apply for an injunction.

Insolvency Litigation

Our dispute resolution lawyers represent individuals, companies and insolvency practitioners on insolvency matters.

International and Cross-Border Disputes

When disputes involve individuals or organisations in different countries, those involved often face an array of complex issues in various jurisdictions.

Litigation Funding Options

Funding litigation can be expensive and cause concern. We hope to alleviate these concerns by offering our clients a bespoke funding package.

Professional Negligence

Our experienced team of litigators act for claimants in bringing claims against professionals when they get it wrong.

Reputation and Media

Protecting our clients’ reputation and maintaining control when they are the subject of media scrutiny is what we do.

News and blogs

View all

Blogs

“Lights. Camera. Action!” – Re Motion Picture Capital and standing for minority shareholders to bring unfair prejudice petitions

The Court confirms the Legal Costs Principle in Shareholder Disputes

Ignorance is bliss? Not for directors!

One hand in the cookie jar: Fraud and directors’ duties in insolvency

Money, money, money: what are directors’ duties in respect of the company’s bank account?

Can a De Facto Director be disqualified as a Director?

Directors’ communications with their solicitors: perhaps not as privileged as you think (Part 2)

The driving force fallacy

Simply Alarming: when might an unfair prejudice petition fail?

Stretching the limits of Directors’ personal liability for torts?

All swans are white….?

Company money should not be used to pay legal costs in disputes between shareholders

Fraud Unravels All?

Liquidation and Fiduciary Duties: No Rest for (the Wicked?) Directors

Unfair prejudice petitions: can a director’s breach of duty bar their claim?

Expert shopping is not for the privileged

Alternative Dispute Resolution (ADR) up for discussion

Case update: Court of Appeal criticises judge for refusing to recuse himself

Professional negligence claims - the breach must cause the loss

Litigation and internal investigations: managing data risks to limit the damage caused by a sudden crisis

Why every company should have a sound understanding of legal privilege issues

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