Langer v McKeown & Anor

Langer v McKeown & Anor

The Respondent engaged in unfairly prejudicial conduct by selling the Soho Club and Marylebone Club assets at undervalue, diverting the Euston Club opportunity, making excessive payments to himself and associates, and mismanaging the Petitioner’s shareholder loan account, breaching both statutory and equitable duties; relief is granted by ordering the Respondent to purchase the Petitioner’s shares at a value reflecting the business as if the unfair prejudice had not occurred.

Parties
Petitioner: Diana Langer; First Respondent: John McKeown; Second Respondent: The Stratos Club Limited
Jurisdiction
England and Wales
Judgment Date
21 December 2020
Procedural Posture
Petition for Relief Under Section 994 of the Companies Act 2006 / Judgment After Split Trial on Unfair Prejudice and Relief
Outcome
Petitioner succeeds; Respondent ordered to purchase Petitioner’s shares at a value reflecting the business absent unfair prejudice.
Legal Topics
Unfair Prejudice, Director's Duties, Valuation of Shares, Conflict of Interest, Financial Mismanagement
Company Law Shareholder Disputes Director Duties Unfair Prejudice Director's Duties Valuation of Shares Conflict of Interest Financial Mismanagement

Case Brief

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Parties

Diana Langer

Petitioner

John McKeown

First Respondent

The Stratos Club Limited

Second Respondent

Procedural Posture

Petition for Relief Under Section 994 of the Companies Act 2006 / Judgment After Split Trial on Unfair Prejudice and Relief

Legal Issues

  1. 1 Whether the Respondent engaged in unfairly prejudicial conduct under section 994 of the Companies Act 2006
  2. 2 Whether the sale of the Soho Club and Marylebone Club assets was at undervalue and in breach of director duties
  3. 3 Whether the acquisition of the Euston Club by the Respondent breached fiduciary duties

Ratio Decidendi

The Respondent engaged in unfairly prejudicial conduct by selling the Soho Club and Marylebone Club assets at undervalue, diverting the Euston Club opportunity, making excessive payments to himself and associates, and mismanaging the Petitioner’s shareholder loan account, breaching both statutory and equitable duties; relief is granted by ordering the Respondent to purchase the Petitioner’s shares at a value reflecting the business as if the unfair prejudice had not occurred.

Court Disposition

Petitioner succeeds; Respondent ordered to purchase Petitioner’s shares at a value reflecting the business absent unfair prejudice.

Orders

  • Respondent to purchase Petitioner’s shares in Stratos Club Limited at a price to be determined per judgment principles.
  • Valuation to include Euston Club as if acquired by Stratos, exclude Soho Club as if sold at fair value.