The role of a company’s auditors and accountants in shareholders disputes

A company’s accountants and auditors often play a key role in the business of smaller companies, acting as general advisers to the directors.  This can lead to problems in the event of a shareholder dispute or boardoom battle.

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Derivative Actions - the Court loosens its apron strings

A derivative action is one where a shareholder takes legal action on behalf of the company.  This goes against the general rule that the affairs of the company are managed by the directors.  The reason for this remedy to is to provide a mechanism for redress where, for example, directors refuse to act (particularly where they are the wrongdoers).

The Companies Act 2006 introduced a new procedure for derivative actions which includes a two stage process for permission.  So far the courts appear to have been cautious about allowing shareholders to exercise the remedy but the recent case of Stainer -v- Lee and others may indicate a slightly more relaxed approach.

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Don’t delay - Act today

If you are involved in a shareholders dispute there can be a temptation to do nothing and hope that it all blows over.  Sometimes this is just what happens and it is the right thing to do.  However, a failure to grasp the nettle can also have unfortunate consequences.  You might find that your shareholders rights have been significantly diminished by a delay in taking action.

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Junior Apprentice

Having had my nose firmly stuck in some knotty cases over the last few months the existence of Junior Apprentice had somehow passed me by.  Having finally caught an episode I am sad to have missed the earlier ones.

All the great ingredients of the main series are there - the over-confidence / arrogance, the backstabbing and the spectacular failures - just in a younger package.  Some business commentators have been very snooty about the educational pretensions of the show - but who cares!  This is entertainment but at the same time it is a microcosm of what goes on and what goes wrong in teams and boardrooms around the country.

I shall not be missing any of the future episodes.

Early Share Valuation in Shareholders’ Disputes

In any shareholders dispute one of the first questions that will occur to a lawyer is how much are you arguing about.  However, it is surprising how often this has not been addressed by parties to a dispute.

Shareholder litigation is notoriously expensive.  As part of any risk analysis an assessment of the proportionality of taking legal action is essential.  It is rare that any good lawyer will ever advise that litigation should be embarked on as a point of principle.  It should only be contemplated where a commercial case for doing so can be made out.

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Nipping shareholders disputes in the bud

One clear way to improve your position in a shareholders dispute is to act early and act fast.  It is often the case that lawyers are called in too late, when early intervention could have made a real difference.

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The issues facing NEDs - a view from the FT

In an article in the FT Michael Kavanagh discusses the current challenges facing non-executive directors (with a few quotes from yours truly).

Click here to read the article.

Time to give shareholders real power over directors’ rewards?

As yet another shareholders meeting registers disapproval of executive pay, this time at easyJet, the question arises as to whether now is the time to hand some greater control over directors remuneration to shareholders.

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A shareholder dispute need not result in a messy divorce

When you specialise in dealing with shareholders disputes you become more of a commercial divorce lawyer than a commercial litigator.  The passions that can be aroused in a dispute between the shareholders in a business are as intense as those which my colleagues in the family law sphere are used to dealing with.  How to avoid these passions killing the golden goose in boardroom disputes is a perennial problem.

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All is not well in the boardroom of UK Plc

The UK cabinet is the most powerful boardroom in the UK.  Like all boardrooms it can be be the venue for bitter infighting as the recent attempted coup by Messrs Hoon and Hewitt neatly illustrates.

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