Peter Waddell Holdco Limited & Anor v Bluebell Cars Holding Limited & Ors
[2024] EWHC 1627 (Ch)
James Robert Hersov v Energy Research Lab Ltd
15 October 2024
[2024] EWHC 2604 (Ch)
High Court
A former CEO sued to stop the company from selling his shares cheaply after he was fired. A judge initially granted an order to help him, but another judge later cancelled it because the CEO hadn't been totally honest about why he waited so long to ask for help. Because the CEO ultimately wanted his shares bought out for a fair price, the judge said a simple money claim was a better option than the complicated court order.
Key Facts
- •Claimant, holding 8% of the defendant company's shares, was dismissed as CEO.
- •Company articles allowed for compulsory sale of shares upon dismissal without notice.
- •Claimant sought an interim injunction to prevent the sale of his shares at what he considered an undervalue.
- •Interim injunction was initially granted without notice to the defendant.
- •Defendant argued material non-disclosure in the initial application.
- •Claimant filed an unfair prejudice petition under section 994 of the Companies Act 2006.
Legal Principles
Duty of full and frank disclosure in without notice applications for interim injunctions.
CPR rule 25.3, Practice Direction 23A paragraph 3.4, Tugushev v Orlov [2019] EWHC 2031 (Comm)
American Cyanamid test for granting interim injunctions (serious question to be tried, adequacy of damages, balance of convenience).
American Cyanamid Co v Ethicon Ltd [1975] AC 396
Consequences of material non-disclosure in without notice applications, including potential discharge of the order.
Tugushev v Orlov [2019] EWHC 2031 (Comm)
Standing in unfair prejudice petitions; whether losing shareholder status automatically removes standing.
Re Motion Picture Capital Ltd [2021] EWHC 2504 (Ch), Re Contingent and Future Technologies Ltd [2024] BCC 223
Adequacy of damages in unfair prejudice petitions seeking a buy-out order.
Pringle v Callard [2007] EWCA Civ 1075, Loveridge v Loveridge (No.1) [2020] EWCA Civ 1104
Outcomes
Discharge of the initial interim injunction granted by HHJ Monty KC.
Material non-disclosure by the claimant regarding the delay in making the application. The claimant failed to provide a sufficient explanation for the delay despite knowing it was a critical factor.
Dismissal of the claimant's application for a renewed interim injunction.
Combination of material non-disclosure, the adequacy of damages (buy-out order sought), and the lack of prejudice to the defendant. The court deemed a monetary remedy sufficient.