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29 July 2019
Categories: Features , Company
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Unfair prejudice petitions: can a director’s breach of duty bar their claim?

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Absent any secretive or dishonest conduct, there can be no certainty that a director’s actions will justify their removal, say Richard Foss & Elena Matsa
  • 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.

 You are acting for a minority shareholder who wishes to bring an unfair prejudice claim pursuant to s 944 of the Companies Act 2006 but who is, at the same time, in breach of their fiduciary duties as a director of the company. Will the breach of their duties be a bar to seeking redress under an unfair prejudice petition?

There have been a number of cases where the court has held that the exclusion of a participant from management has been justified on the grounds of breach of duty. Those cases are very fact-specific, but tend to involve breaches of duty involving secretive and/or dishonest

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