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Lawrie Grace v (1) Marcello Biagioli (2) Stephen Van Loggerenberg (3) Cathleen Johannessen (4) Titanium Electrode Products Ltd [2005] EWCA Civ 1222

The most appropriate order to deal with intra company disputes in small private companies would normally be a buy-out order since, where unfairly prejudicial conduct under the Companies Act 1985, s 459 had been proved, a clean break was likely to be necessary to satisfy the objectives of the court's power to intervene under s 461 of the 1985 Act.

25 November 2005

The appellant petitioner (G) appealed against the court's decision not to order the respondents to purchase G's shares in a company (T) despite having found that there had been unfairly prejudicial conduct in relation to T's affairs for the purposes of the Companies Act 1985, s 459. G and the first and third respondents (R) each held one quarter of the shares in T. All three were directors. G had presented a petition under the s 459 alleging unfairly prejudicial conduct in the conduct of T's affairs. The conduct relied on was R's decision not to pay an agreed dividend but to distribute the relevant profits to R alone as management and other fees, and R's decision to remove G as a director. The judge had held that unfair prejudice had been established in respect of the failure to pay the agreed dividend, but that the decision to remove G as a director had been justified because he had been negotiating to acquire a company in the same line of business as T and had therefore put himself i...

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