Commentary

127.7 Problems in petitioning for breach of a shareholders’ agreement

BUSINESSES vol 4(2) start-up, sale and purchase
| Commentary

127.7 Problems in petitioning for breach of a shareholders’ agreement

| Commentary

127.7 Problems in petitioning for breach of a shareholders’ agreement

Where a court makes a finding of unfair prejudice, the order which it is most likely to make is that the majority buy out the minority at a fair price1. Therefore, petitioning on these grounds may at first sight seem an attractive option for a shareholder who feels that the pre-emption provisions in the shareholders’ agreement involve unfair valuation provisions2.

However, there is one major obstacle for a shareholder who wishes to use unfair prejudice to circumvent unappealing provisions in a shareholders’ agreement. The court will usually expect the petitioning shareholder

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