Malik v Mahboob Hussain Junior & Ors [2021] EWHC 1405 (Ch) (26 May 2021)

Malik v Mahboob Hussain Junior & Ors [2021] EWHC 1405 (Ch) (26 May 2021)

The court ordered that the partnership assets should be offered for sale on the open market with both partners permitted to bid, but if no sale occurs, Mahboob is to buy out Tariq's interest at a valuation determined by the court. The property is to be valued on the basis that the rent will increase to market value at the next review date, and the company is to be valued using a discounted cashflow method reflecting Covid-19 impacts. This approach ensures fairness, maximises value, and reflects the realities of the business and parties' positions.

Citation
[2021] EWHC 1405 (Ch)
Parties
Claimant/petitioner: Tariq Mahmood Malik; First Defendant/respondent: Mahboob Hussain Junior; Second Defendant/respondent: RN Restaurant (Stockport) Limited; Third Defendant/respondent: Nusrat Tariq; Fourth Defendant/respondent: Mirza Begum; Fifth Defendant/respondent: Asad Ali Malik; Sixth Defendant/respondent: Usman Hussain Malik
Jurisdiction
England and Wales
Judgment Date
26 May 2021
Procedural Posture
Partnership Dissolution and Final Account / Judgment on Taking of Final Account After Dissolution Order
Outcome
Partnership assets to be offered for sale on open market with both partners permitted to bid; if no sale, buy-out of Tariq's interest by Mahboob at court-determined valuation.
Legal Topics
Dissolution of Partnership, Winding Up of Partnership, Valuation of Partnership Assets, Buy Out Orders, Discretion in Sale or Buy Out, Family Business Disputes
Partnership Law Company Law Property Law Dissolution of Partnership Winding Up of Partnership Valuation of Partnership Assets Buy Out Orders Discretion in Sale or Buy Out +1 more

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Parties

Tariq Mahmood Malik

Claimant/petitioner

Mahboob Hussain Junior

First Defendant/respondent

RN Restaurant (Stockport) Limited

Second Defendant/respondent

Nusrat Tariq

Third Defendant/respondent

Mirza Begum

Fourth Defendant/respondent

Asad Ali Malik

Fifth Defendant/respondent

Usman Hussain Malik

Sixth Defendant/respondent

Procedural Posture

Partnership Dissolution and Final Account / Judgment on Taking of Final Account After Dissolution Order

Legal Issues

  1. 1 Whether the partnership assets should be sold on the open market or subject to a buy-out by one partner
  2. 2 Proper basis for valuation of partnership property and company shares
  3. 3 Appropriate method for valuing the restaurant business in light of Covid-19 impact

Ratio Decidendi

The court ordered that the partnership assets should be offered for sale on the open market with both partners permitted to bid, but if no sale occurs, Mahboob is to buy out Tariq's interest at a valuation determined by the court. The property is to be valued on the basis that the rent will increase to market value at the next review date, and the company is to be valued using a discounted cashflow method reflecting Covid-19 impacts. This approach ensures fairness, maximises value, and reflects the realities of the business and parties' positions.

Court Disposition

Partnership assets to be offered for sale on open market with both partners permitted to bid; if no sale, buy-out of Tariq's interest by Mahboob at court-determined valuation.

Orders

  • Property to be valued by joint expert on basis of rent increasing to market value at next review date.
  • Company to be valued using discounted cashflow method reflecting Covid-19 impacts.