Butters & Ors v BBC Worldwide Ltd & Ors

Butters & Ors v BBC Worldwide Ltd & Ors

Clause 16.2.5 of the MLA and clause 26.7.3 of the JVA are void for infringing the deprivation principle, as they enable BBCW to acquire Media’s shares at less than Fair Value upon insolvency. The MLA was terminated by implied surrender and grant of a new licence. The offending words in clause 16.2.5 should be struck...

Source-derived case information.

Parties
Applicant: Daniel Francis Butters; Applicant: Neville Barry Kahn; Applicant: Nicholas James Dargan; Respondent: BBC Worldwide Ltd; Respondent: 2 Entertain Ltd; Respondent: BBC Video Ltd
Jurisdiction
England and Wales
Judgment Date
20 August 2009
Procedural Posture
Civil / Judgment
Outcome
Declaration granted; offending provisions struck out.
Legal Topics
Deprivation Principle, Share Valuation, Termination Clauses, Public Policy, Negotiation in Good Faith
Insolvency Contract Company Deprivation Principle Share Valuation Termination Clauses Public Policy Negotiation in Good Faith

Source-derived case record

Summary, issues, holding and outcome

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Parties

Daniel Francis Butters

Applicant

Neville Barry Kahn

Applicant

Nicholas James Dargan

Applicant

BBC Worldwide Ltd

Respondent

2 Entertain Ltd

Respondent

BBC Video Ltd

Respondent

Procedural Posture

Civil / Judgment

Legal Issues

  1. 1 Whether clause 16.2.5 of the MLA and clause 26.7.3 of the JVA are void for infringing the deprivation principle
  2. 2 Whether the MLA was terminated by implied surrender and grant of new licence
  3. 3 How Fair Value of Media's shares in 2 Entertain Ltd should be determined

Ratio Decidendi

Clause 16.2.5 of the MLA and clause 26.7.3 of the JVA are void for infringing the deprivation principle, as they enable BBCW to acquire Media’s shares at less than Fair Value upon insolvency. The MLA was terminated by implied surrender and grant of a new licence. The offending words in clause 16.2.5 should be struck out, preserving the option agreement and allowing BBCW to acquire the shares on the basis that the MLA was terminated, without linkage to the acquisition of shares.

Court Disposition

Declaration granted; offending provisions struck out.

Orders

  • Clause 16.2.5 of the MLA and clause 26.7.3 of the JVA declared void for infringing the deprivation principle.
  • Offending words in clause 16.2.5 struck out; option agreement preserved.