Saxon Woods Investments Limited v Francesco Costa & Ors

Saxon Woods Investments Limited v Francesco Costa & Ors

The company, acting through Mr Costa, breached clause 6.2 of the SHA by failing to work in good faith towards an Exit by the end of 2019 and failing to give good faith consideration to offers. Mr Costa controlled the process, excluded the petitioner, and misled the board as to compliance. This conduct caused unfair prejudice to the petitioner as a member. If, at the quantum trial, it is established that a binding offer above $75m net of debt would have been received, Mr Costa must buy out the petitioner's shares at 22.33% of that value. The company may not indemnify Mr Costa for his legal costs in defending the petition.

Parties
Petitioner: Saxon Woods Investments Limited; First Respondent: Francesco Costa; Second Respondent: Far East Media Holdings Pte Ltd; Third Respondent: Grosvenor Investment Project Limited; Fourth Respondent: HDO Holding Limited; Fifth Respondent: Bay Capital Investments Limited; Sixth Respondent: Khattar Holdings Private Limited; Seventh Respondent: Simon Powell; Eighth Respondent: Spring Media Investments Limited
Jurisdiction
England and Wales
Judgment Date
11 October 2024
Procedural Posture
Petition Under S.994 Companies Act 2006 (unfair Prejudice) / Judgment After Trial
Outcome
Petition allowed, subject to quantum determination
Legal Topics
Unfair Prejudice, Shareholders' Agreements, Directors' Duties, Remedies Under Companies Act 2006 S.994, Breach of Contract, Corporate Governance
Company Law Contract Law Unfair Prejudice Shareholders' Agreements Directors' Duties Remedies Under Companies Act 2006 S.994 Breach of Contract Corporate Governance

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Parties

Saxon Woods Investments Limited

Petitioner

Francesco Costa

First Respondent

Far East Media Holdings Pte Ltd

Second Respondent

Grosvenor Investment Project Limited

Third Respondent

HDO Holding Limited

Fourth Respondent

Bay Capital Investments Limited

Fifth Respondent

Khattar Holdings Private Limited

Sixth Respondent

Simon Powell

Seventh Respondent

Spring Media Investments Limited

Eighth Respondent

Procedural Posture

Petition Under S.994 Companies Act 2006 (unfair Prejudice) / Judgment After Trial

Legal Issues

  1. 1 Whether the conduct of the company and Mr Costa was unfairly prejudicial to the petitioner under s.994 Companies Act 2006
  2. 2 Whether there was a breach of the Shareholders' Agreement (SHA), clause 6.2
  3. 3 Whether Mr Costa was responsible for the unfair prejudice and/or breach

Ratio Decidendi

The company, acting through Mr Costa, breached clause 6.2 of the SHA by failing to work in good faith towards an Exit by the end of 2019 and failing to give good faith consideration to offers. Mr Costa controlled the process, excluded the petitioner, and misled the board as to compliance. This conduct caused unfair prejudice to the petitioner as a member. If, at the quantum trial, it is established that a binding offer above $75m net of debt would have been received, Mr Costa must buy out the petitioner's shares at 22.33% of that value. The company may not indemnify Mr Costa for his legal costs in defending the petition.

Court Disposition

Petition allowed, subject to quantum determination

Orders

  • There will be a further hearing to determine the value of the hypothetical offer (quantum trial).
  • If a binding offer above $75m net of debt would have been received, Mr Costa must purchase the petitioner's shares at 22.33% of that value.