Cinematic Finance Ltd v Ryder & Ors

Cinematic Finance Ltd v Ryder & Ors

Permission to continue a derivative claim should only be granted to a controlling shareholder in very exceptional circumstances. No such circumstances exist here, as the claimant could have procured the companies to act and the companies are insolvent, making liquidation or administration the appropriate route. The application is dismissed.

Parties
Claimant/applicant: Cinematic Finance Limited; Defendant/respondent: Dominic Ryder; Defendant/respondent: John Hirst; Defendants/respondents: Zeus Partners LLP & 17 Others
Jurisdiction
England and Wales
Judgment Date
21 October 2010
Procedural Posture
Derivative Claim (companies Act 2006) / Application for Permission to Continue Derivative Claim (second Stage Hearing)
Outcome
Application dismissed
Legal Topics
Derivative Actions, Shareholder Remedies, Corporate Control, Insolvency Procedures
Company Law Insolvency Law Derivative Actions Shareholder Remedies Corporate Control Insolvency Procedures

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Parties

Cinematic Finance Limited

Claimant/applicant

Dominic Ryder

Defendant/respondent

John Hirst

Defendant/respondent

Zeus Partners LLP & 17 Others

Defendants/respondents

Procedural Posture

Derivative Claim (companies Act 2006) / Application for Permission to Continue Derivative Claim (second Stage Hearing)

Legal Issues

  1. 1 Whether a controlling shareholder can bring a derivative claim on behalf of companies it controls
  2. 2 Whether exceptional circumstances exist to justify permitting a derivative claim by a majority shareholder
  3. 3 Whether the insolvency of the companies affects the appropriateness of a derivative claim

Ratio Decidendi

Permission to continue a derivative claim should only be granted to a controlling shareholder in very exceptional circumstances. No such circumstances exist here, as the claimant could have procured the companies to act and the companies are insolvent, making liquidation or administration the appropriate route. The application is dismissed.

Court Disposition

Application dismissed

Orders

  • Permission to continue the derivative claim is refused