Shareholder Dispute: Fair Value in an Unfair Prejudice Claim
Shareholder Disputes
Background
A minority shareholder in a profitable engineering business brought unfair prejudice proceedings under s994 Companies Act 2006, seeking a fair value buy-out following exclusion from management and diversion of profitable contracts to a connected company.
Instruction
Single Joint Expert under CPR Part 35 to value the company and the claimant's shareholding on a fair value basis, and to provide expert evidence on minority discount and maintainable earnings.
Approach
Analysed five years of audited accounts and management information; normalised director remuneration and related party charges; assessed maintainable EBITDA using sector-appropriate multiples; addressed minority discount arguments with reference to case law and valuation practice; prepared a CPR Part 35 compliant report for joint expert meeting.
Outcome
The SJE's fair value figure differed materially from both parties' initial positions. Following the joint expert meeting and exchange of reports, the matter settled at FDR with a buy-out based on the expert's maintainable earnings analysis and fair value conclusion.
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