- Unfair prejudice petitions successful where business and revenue had been diverted and companies dissolved absent shareholder approval (Re GO DPO EU and others; Ritchie and others v Kolah and others)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Restructuring & Insolvency analysis: The petitioners succeeded in two unfair prejudice petitions pursuant to section 994 of the Companies Act 2006 (CA 2006) concerning four companies operating in the field of data protection, data privacy and General Data Protection Regulations training. Insolvency and Companies Court Judge Jones determined that the respondent majority shareholders, Mr Kolah and Mr Verrian, had diverted business and revenues from the relevant companies including by forming and operating a new company. The respondents had also dissolved two companies absent the requisite shareholder approval. The court was satisfied that the affairs of the relevant companies had been conducted in a manner that was unfair and prejudicial to the petitioners as members. The court also determined that one of the petitioners (Mr Ritchie) had been invalidly removed as a director of two of the companies. Owing to the other unfair and prejudicial conduct of the respondents, it was unnecessary to make a final determination as to whether that petitioner’s own conduct could be relied upon to avoid a conclusion of unfair prejudice and/or to affect the nature of any relief which might otherwise be granted. Written by Darragh Connell, barrister at Forum Chambers.
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