SDI Retail Services Ltd v King & Ors [2017] EWHC 737 (Ch) (06 April 2017)

SDI Retail Services Ltd v King & Ors [2017] EWHC 737 (Ch) (06 April 2017)

Permission to continue the derivative claim is granted because there is a strongly arguable case that the directors breached their fiduciary duties by procuring the purported termination of the IPLA and preventing the Company from challenging it, the claim is important to the Company’s survival, the statutory and discretionary tests under the Companies Act 2006 are satisfied, and no mandatory bar applies.

Citation
[2017] EWHC 737 (Ch)
Parties
Claimant: SDI Retail Services Limited; First Defendant: David King; Second Defendant: Paul Murray; Third Defendant: The Rangers Football Club Limited; Fourth Defendant: Rangers Retail Limited
Jurisdiction
England and Wales
Judgment Date
06 April 2017
Procedural Posture
Derivative Claim (companies Act 2006) / Application for Permission to Continue Derivative Action
Outcome
Permission granted to continue derivative action
Legal Topics
Derivative Claims, Directors' Fiduciary Duties, Shareholder Agreements, Breach of Contract, Conflicts of Interest
Company Law Contract Law Derivative Claims Directors' Fiduciary Duties Shareholder Agreements Breach of Contract Conflicts of Interest

Case Brief

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Parties

SDI Retail Services Limited

Claimant

David King

First Defendant

Paul Murray

Second Defendant

The Rangers Football Club Limited

Third Defendant

Rangers Retail Limited

Fourth Defendant

Procedural Posture

Derivative Claim (companies Act 2006) / Application for Permission to Continue Derivative Action

Legal Issues

  1. 1 Whether SDI Retail Services Limited should be granted permission to continue a derivative claim on behalf of Rangers Retail Limited against directors and shareholder for breach of fiduciary duty and breach of contract
  2. 2 Whether the purported termination of the IPLA by TRFC was invalid and actionable
  3. 3 Whether the statutory and discretionary tests under Companies Act 2006 ss.260-263 are satisfied

Ratio Decidendi

Permission to continue the derivative claim is granted because there is a strongly arguable case that the directors breached their fiduciary duties by procuring the purported termination of the IPLA and preventing the Company from challenging it, the claim is important to the Company’s survival, the statutory and discretionary tests under the Companies Act 2006 are satisfied, and no mandatory bar applies.

Court Disposition

Permission granted to continue derivative action

Orders

  • Permission granted to SDI Retail Services Limited to continue the derivative claim on behalf of Rangers Retail Limited against the Defendants.