Duneau v Klimt Invest SA & Ors [2022] EWHC 596 (Ch) (17 March 2022)

Duneau v Klimt Invest SA & Ors [2022] EWHC 596 (Ch) (17 March 2022)

The court found that the company's substratum had failed following the sale of its assets and business in January 2019, and that the company had no ongoing business purpose other than holding cash. The court found no binding agreement or understanding entitling ED to board membership, and did not accept the company...

Source-derived case information.

Citation
[2022] EWHC 596 (Ch)
Parties
Petitioner: Eric Duneau; First Respondent: Klimt Invest SA; Second Respondent: Klimvest PLC; Third Respondent: Frederic Senegas
Jurisdiction
England and Wales
Judgment Date
17 March 2022
Procedural Posture
Petition for Just and Equitable Winding Up Under Insolvency Act 1986 S.122(1)(g) / Final Judgment After Trial
Outcome
Petition granted; order for just and equitable winding up of Klimvest PLC.
Legal Topics
Just and Equitable Winding Up, Loss of Substratum, Quasi Partnership, Shareholder Disputes, Board Exclusion, Alternative Remedy, Clean Hands Doctrine
Company Law Insolvency Law Just and Equitable Winding Up Loss of Substratum Quasi Partnership Shareholder Disputes Board Exclusion Alternative Remedy +1 more

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Parties

Eric Duneau

Petitioner

Klimt Invest SA

First Respondent

Klimvest PLC

Second Respondent

Frederic Senegas

Third Respondent

Procedural Posture

Petition for Just and Equitable Winding Up Under Insolvency Act 1986 S.122(1)(g) / Final Judgment After Trial

Legal Issues

  1. 1 Whether it is just and equitable to wind up Klimvest PLC under s.122(1)(g) of the Insolvency Act 1986
  2. 2 Whether the company's substratum has failed or ceased to exist
  3. 3 Whether there was an agreement or understanding entitling ED to board membership

Ratio Decidendi

The court found that the company's substratum had failed following the sale of its assets and business in January 2019, and that the company had no ongoing business purpose other than holding cash. The court found no binding agreement or understanding entitling ED to board membership, and did not accept the company was a quasi-partnership. However, the breakdown of trust and confidence, the exclusion of ED from the board, and the lack of a viable ongoing business purpose justified winding up on the just and equitable ground. The alternative remedy offered was not reasonable in the circumstances, and the petitioner did not lack clean hands to a degree that would bar relief.

Court Disposition

Petition granted; order for just and equitable winding up of Klimvest PLC.

Orders

  • Klimvest PLC to be wound up under s.122(1)(g) of the Insolvency Act 1986
  • Official Receiver or other appropriate person to be appointed as liquidator