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Shareholder dispute solicitors

Get expert advice on resolving shareholder disputes

Our diverse and experienced team advise clients across all sectors in all forms of shareholder and corporate and boardroom disputes and regularly act for minority and majority shareholders and directors.

We understand that disputes are not good for business and so we work with clients to resolve matters in a commercial, efficient and cost-effective manner, helping our clients to achieve their desired outcomes whether that be by negotiation, ADR (such as mediation), civil proceedings, arbitration or expert determination.

We manage this by providing quality, clear legal and strategic advice and by utilising innovation to ensure that things are managed effectively and to a high standard.

Our shareholder dispute solicitors have expertise in bringing and defending unfair prejudice petitions, breach of warranty claims, claims against directors and claims for earn out payments or deferred consideration. For example, shareholders may present a petition to the Court if they have been excluded from the day to day running of the business or have not been provided with the information they are entitled to, or if there is an allegation of mis-management or a dilution of a shareholding.

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How our shareholder dispute solicitors can help you

There are a number of tactics available for resolving shareholder disputes. Here are just some of the ways in which our experienced shareholder dispute solicitors can help you:

Unfair prejudice claims (Section 994 petitions)

One of the most common ways that a shareholder can raise a dispute is by bringing an unfair prejudice petition under Section 994 of the Companies Act. This remedy is designed to protect the shareholders interests when a company or its directors take actions that unfairly harms (or ‘prejudices’) their interests as stakeholders in the company.

Examples of what might constitute unfair prejudice include:

  • Being excluded from management or decision making
  • Financial prejudice, such as the withholding of dividends
  • Share dilutions
  • Mismanagement or misconduct

‘Just and equitable’ winding-up petitions

In extreme circumstances, a shareholder can ask the court to liquidate (or ‘wind-up’) a company on a “just and equitable” basis under Section 122 of the Insolvency Act. This is a nuclear option and is typically used only when a shareholder sees no other avenue to recover their investment.

Derivative actions and claims against directors

A derivative action effectively allows a shareholder to bring a claim on behalf of the company. It can be a powerful tool to bring claims against an individual director if they are alleged to have done something wrong or illegal.

A derivative action can sometimes be necessary where a claim against a company is unlikely to be successful because the director who facilitated the wrongdoing is one of the key decision makers.

Resolving shareholder deadlock and exit strategies

If two directors who own a company in equal shares fall out, the end result is often that the company finds itself in deadlock, with the company unable to move forward since a majority cannot be reached.

In such situations, our shareholder dispute solicitors can help resolve the conflict, whether by negotiated buyout or through identifying and enforcing any deadlock-breaking mechanisms in the company’s articles or association or shareholder agreements.

Key shareholder dispute cases

  • Advising a client in respect of unfair oppression of the minority shareholder and issues in relation to deferred consideration payable  under an earn-out following the sale of the company.
  • Advising a client regarding their majority shareholding in an international supply company, where there were concerns over the actions of the managing director/minority shareholder and alleged breach of fiduciary duties.
  • Advising on an unfair prejudice petition issued by a minority shareholder whose shares had been significantly diluted by the majority shareholder, following our client’s sale of the majority shares in the business.
  • Acted for a director and shareholder in relation to a dispute with regards the payment of deferred consideration following the sale of a business in respect of the interpretation and construction of the terms of the earn out in the sale and purchase agreement and related corporate documents.
  • Acted for the claimant in 116 Cardamon Limited v McAllister [2019] EWHC 1200 (Com) (link) where (after proceedings were served in Western Australia via WhatsApp) the maximum damages allowable under an SPA were ordered to be paid after it was established that the Defendant had breached the warranties it had given to the claimant.  
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Early resolution via negotiation or mediation

Shareholder disputes don’t always need to end up in court. Many disputes can be resolved more cost-effectively through forms of alternative dispute resolution, such as mediation. We have a team of accredited mediation solicitors who can support you in exploring a negotiated settlement.

Why choose Weightmans for shareholder dispute resolution?

Here’s what sets our shareholder dispute solicitors apart:

  • National coverage with local knowledge: We operate across the UK and internationally from our offices in Birmingham, Cardiff, Glasgow, Leeds, Leicester, Liverpool, London, Manchester, Newcastle and Nottingham. We have one of the largest litigation teams in the country, with those in each office all having a strong understanding of their local markets.
  • Experienced and recognised advisors: We regularly act on high-stakes shareholder disputes — from multi-million-pound unfair prejudice cases to urgent injunctions — and we’re recognised as leading experts by the independent legal directories.
  • Part of a full-service law firm: Our shareholder dispute solicitors don’t operate in a vacuum, we’re backed by the full-service expertise of Weightmans and can draw on experts from other areas, such as our employment and  corporate teams.
  • Dispute funding options: We are able to offer commercial litigation funding for appropriate cases, allowing you to share the financial risk of litigation.