Kohli v Lit & Ors [2013] EWCA Civ 667 (17 June 2013)

Kohli v Lit & Ors [2013] EWCA Civ 667 (17 June 2013)

The Court held that significant external liabilities, specifically the debts to Global Radio Services Ltd and Asian Broadcasting Corporation Ltd, should be deducted in the share valuation alongside the bank debt, as a purchaser would expect to repay them. The judge's exclusion of other debts was flawed. The appeal...

Source-derived case information.

Citation
[2013] EWCA Civ 667
Parties
Petitioner: Ms Geeta Kohli; Respondent: Dr Avtar Lit; Respondent: Ravinder Kumar Jain; Respondent: Surinderpal Singh Lit; Respondent: Sunrise Radio Limited
Jurisdiction
England and Wales
Judgment Date
17 June 2013
Procedural Posture
Companies Act Section 994 Petition / Appeal From High Court Valuation Order
Outcome
Appeal allowed in part
Legal Topics
Unfair Prejudice, Share Valuation, Minority Shareholder Rights, External Liabilities Deduction
Company Law Shareholder Disputes Unfair Prejudice Share Valuation Minority Shareholder Rights External Liabilities Deduction

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Parties

Ms Geeta Kohli

Petitioner

Dr Avtar Lit

Respondent

Ravinder Kumar Jain

Respondent

Surinderpal Singh Lit

Respondent

Sunrise Radio Limited

Respondent

Procedural Posture

Companies Act Section 994 Petition / Appeal From High Court Valuation Order

Legal Issues

  1. 1 Whether external liabilities beyond bank debt should be deducted in share valuation
  2. 2 Treatment of bank loan interest in maintainable earnings
  3. 3 Treatment of management charges in maintainable earnings

Ratio Decidendi

The Court held that significant external liabilities, specifically the debts to Global Radio Services Ltd and Asian Broadcasting Corporation Ltd, should be deducted in the share valuation alongside the bank debt, as a purchaser would expect to repay them. The judge's exclusion of other debts was flawed. The appeal succeeded only on this point; other grounds failed as the judge's findings were evidence-based and open to him.

Court Disposition

Appeal allowed in part

Orders

  • Sum payable to petitioner to be adjusted to reflect deduction of two additional external debts; parties to agree calculation.