Timothy McMonagle v Lee Harvey & Ors

Timothy McMonagle v Lee Harvey & Ors

The court accepted the expert’s EBITDA calculation, multiplier of 5, and approach to directors’ loans. However, it found that the appropriate minority discount was 15% (not 30%) because Mr McMonagle and his wife’s shareholdings were effectively linked, giving him control of 50% of the company. The final value of Mr Harvey’s shares is to be agreed by the parties, applying the 15% discount.

Parties
Petitioner: Timothy McMonagle; First Respondent: Lee Harvey; Second Respondent: Tracey McMonagle; Third Respondent: Maria Harvey; Fourth Respondent: Integrated Control Solutions (Eastern) Limited
Jurisdiction
England and Wales
Judgment Date
11 October 2024
Procedural Posture
Company/shareholder Dispute (valuation of Shares) / Post Liability Trial, Determination of Share Value and Minority Discount
Outcome
Valuation of Mr Harvey’s shares determined with a 15% minority discount; parties to agree final figure.
Legal Topics
Share Valuation, Minority Discount, Directors' Duties, Financial Reporting, EBITDA Calculation
Company Law Share Valuation Minority Discount Directors' Duties Financial Reporting EBITDA Calculation

Case Brief

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Parties

Timothy McMonagle

Petitioner

Lee Harvey

First Respondent

Tracey McMonagle

Second Respondent

Maria Harvey

Third Respondent

Integrated Control Solutions (Eastern) Limited

Fourth Respondent

Procedural Posture

Company/shareholder Dispute (valuation of Shares) / Post Liability Trial, Determination of Share Value and Minority Discount

Legal Issues

  1. 1 What is the fair value of Mr Harvey’s shares in Integrated Control Solutions (Eastern) Limited?
  2. 2 What is the appropriate minority discount to apply?
  3. 3 Are adjustments to EBITDA, multiplier, and director’s loan account justified?

Ratio Decidendi

The court accepted the expert’s EBITDA calculation, multiplier of 5, and approach to directors’ loans. However, it found that the appropriate minority discount was 15% (not 30%) because Mr McMonagle and his wife’s shareholdings were effectively linked, giving him control of 50% of the company. The final value of Mr Harvey’s shares is to be agreed by the parties, applying the 15% discount.

Court Disposition

Valuation of Mr Harvey’s shares determined with a 15% minority discount; parties to agree final figure.

Orders

  • No adjustments to EBITDA or director’s loan account.
  • EBITDA multiplier of 5 accepted.