F&C Alternative Investments (Holdings) Ltd v Barthelemy & Anor [2011] EWHC 1731 (Ch) (14 July 2011)

F&C Alternative Investments (Holdings) Ltd v Barthelemy & Anor [2011] EWHC 1731 (Ch) (14 July 2011)

The court held that Holdings' conduct did not amount to gross negligence or gross misconduct with a materially adverse effect so as to trigger the Defendants' right to exercise the Put Options under the LLP Agreement. The purported exercises of the Put Options by the Defendants were invalid. The Defendants' claims of unfair prejudice under Companies Act 2006 s.994 were not made out. Holdings' cross-petition for unfair prejudice was also dismissed.

Citation
[2011] EWHC 1731 (Ch)
Parties
Claimant/part 20 Defendant/cross Petitioner/respondent: F&C Alternative Investments (Holdings) Limited; Defendant/part 20 Claimant/petitioner/respondent: Francois Barthelemy; Defendant/part 20 Claimant/petitioner/respondent: Anthony Culligan; Respondent: F&C Partners LLP; Respondent: F&C Asset Management plc
Jurisdiction
England and Wales
Judgment Date
14 July 2011
Procedural Posture
Chancery/companies/contract/unfair Prejudice/part 7 Claim/cross Petition / Trial on Liability (quantum Reserved for Later Hearing)
Outcome
Claims and counterclaims dismissed; declarations granted in favour of Holdings; quantum reserved for later hearing.
Legal Topics
Limited Liability Partnerships, Unfair Prejudice, Put and Call Options, Fiduciary Duties, Breach of Contract, Members' Rights, Corporate Governance
Company Law Contract Law Partnership Law Equity Limited Liability Partnerships Unfair Prejudice Put and Call Options Fiduciary Duties +3 more

Case Brief

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Parties

F&C Alternative Investments (Holdings) Limited

Claimant/part 20 Defendant/cross Petitioner/respondent

Francois Barthelemy

Defendant/part 20 Claimant/petitioner/respondent

Anthony Culligan

Defendant/part 20 Claimant/petitioner/respondent

F&C Partners LLP

Respondent

F&C Asset Management plc

Respondent

Procedural Posture

Chancery/companies/contract/unfair Prejudice/part 7 Claim/cross Petition / Trial on Liability (quantum Reserved for Later Hearing)

Legal Issues

  1. 1 Whether the Defendants validly exercised Put Options under the LLP Agreement
  2. 2 Whether Holdings breached the LLP Agreement in a manner amounting to gross negligence or gross misconduct with materially adverse effect
  3. 3 Whether the affairs of the LLP were conducted in a manner unfairly prejudicial to the Defendants' interests under Companies Act 2006 s.994

Ratio Decidendi

The court held that Holdings' conduct did not amount to gross negligence or gross misconduct with a materially adverse effect so as to trigger the Defendants' right to exercise the Put Options under the LLP Agreement. The purported exercises of the Put Options by the Defendants were invalid. The Defendants' claims of unfair prejudice under Companies Act 2006 s.994 were not made out. Holdings' cross-petition for unfair prejudice was also dismissed.

Court Disposition

Claims and counterclaims dismissed; declarations granted in favour of Holdings; quantum reserved for later hearing.

Orders

  • Declaration that the Defendants' purported exercises of the Put Options were invalid.
  • Dismissal of the Defendants' unfair prejudice petition under Companies Act 2006 s.994.