Court rejects family business claim request

In a significant ruling on April 4, 2025, the High Court of Justice in England and Wales dismissed a family business dispute concerning the estate of Philippos Embiricos Coumoundouros, a prominent figure in shipping who died on November 20, 2021. The case, titled Olivier Desmarais & Anor v Misbourne Investment Corporation & Ors, focused on Misbourne Investment Corporation, a company owned by Mr Coumoundouros and registered in Liberia.

Presided over by Deputy High Court Judge Paul Stanley KC, the judgment evaluated whether Adriana Embiricos Coumoundouros and her husband, Olivier Desmarais, could continue with a derivative claim on behalf of Misbourne against Green Services International GSI Limited and Libra Holdings Limited. This claim centred on a disputed loan, which GSI asserted Misbourne owed, purportedly amounting to €45 million. The claimants strongly contested the legitimacy of this loan, alleging it was a sham meant to pressure Misbourne for repayment and undermine their legal position following Mr Coumoundouros's death.

During deliberations, the court examined if the applicants could establish a prima facie case. Judge Stanley acknowledged that while the evidence raised suspicions about the loan's legitimacy, the claimants ultimately failed to satisfy the requirements for bringing a derivative action. The court noted changes in the company’s internal management structure due to the resignation of its directors but concluded that this did not imply control by wrongdoers as defined by the established legal tests for derivative claims.

Furthermore, Judge Stanley emphasised that applicants must demonstrate a tangible wrong directed towards the company that those in control ignored. Even with the resignation of directors, the court did not find evidence indicating that these actions were beneficial to GSI. The link between the executives’ conduct and GSI’s claims was deemed too weak under English law standards.

Judge Stanley also assessed whether allowing the derivative claim would create a valid remedy. He determined that dismissing the application would not leave the claimants without options. The ruling highlighted the necessity of adhering to legal frameworks to address such matters properly without expanding the boundaries of established principles.

Consequently, the court's decision prevented Adriana and Olivier from proceeding with their derivative claim against GSI and Libra, underscoring the importance of robust evidence and clear legal definitions in cases involving family businesses with intricate financial narratives. The ruling serves as a reminder that family disputes must also adhere to stringent legal standards to prevent the misuse of corporate structures.

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