Kohli v Lit & Ors [2011] EWHC 3821 (Ch) (16 December 2011)

Kohli v Lit & Ors [2011] EWHC 3821 (Ch) (16 December 2011)

The fair value of the petitioner's shares is determined by calculating the maintainable earnings of Sunrise and its profitable subsidiaries, deducting only legally binding liabilities, excluding minority discount, and applying an appropriate price earnings ratio, resulting in a valuation of £700,000 for the petitioner's shareholding.

Citation
[2011] EWHC 3821 (Ch)
Parties
Petitioner: Geeta Kohli; First Respondent: Avtar Lit; Respondents: Other Respondents
Jurisdiction
England and Wales
Judgment Date
16 December 2011
Procedural Posture
Company Law Petition / Post Trial Valuation Judgment
Outcome
Petitioner's shares valued at £700,000; order for purchase by respondents at that price.
Legal Topics
Share Valuation, Minority Shareholder Rights, Expert Evidence, Fair Value Determination
Company Law Share Valuation Minority Shareholder Rights Expert Evidence Fair Value Determination

Case Brief

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Parties

Geeta Kohli

Petitioner

Avtar Lit

First Respondent

Other Respondents

Respondents

Procedural Posture

Company Law Petition / Post Trial Valuation Judgment

Legal Issues

  1. 1 What is the fair value of the petitioner's shares in Sunrise Radio Limited as at 13 November 2009 without minority discount?
  2. 2 Should liabilities of subsidiaries and consultancy fees be included in the valuation?
  3. 3 What is the appropriate methodology for share valuation in the context of a profitable group with loss-making subsidiaries?

Ratio Decidendi

The fair value of the petitioner's shares is determined by calculating the maintainable earnings of Sunrise and its profitable subsidiaries, deducting only legally binding liabilities, excluding minority discount, and applying an appropriate price earnings ratio, resulting in a valuation of £700,000 for the petitioner's shareholding.

Court Disposition

Petitioner's shares valued at £700,000; order for purchase by respondents at that price.

Orders

  • Respondents to purchase petitioner's shares in Sunrise Radio Limited at £700,000.
  • Valuation based on maintainable earnings, adjusted for debt and asset values, without minority discount.