Irvine v Irvine & Anor

Irvine v Irvine & Anor

The petitioners' 49.96% shareholding in CIHL must be valued as a minority interest, subject to a 30% minority discount, with both the notional cash surplus (arising from excessive remuneration) and the actual cash surplus (undistributed profits) treated as company assets subject to the same discount. The overall value of the petitioners' shares as at 10 March 2006 is £2,420,000.

Parties
Petitioner: Patricia Mary Irvine; Petitioner: Michael Cleobury Thatcher and Patricia Mary Irvine as Trustees of the Accumulation and Maintenance Settlement dated 6 August 1993; Respondent: Ian Charles Irvine; Respondent: Campbell Irvine (Holdings) Limited
Jurisdiction
England and Wales
Judgment Date
24 July 2006
Procedural Posture
Company Law Petition (section 459 Companies Act 1985) / Valuation of Shares Following Judgment and Buy Out Order
Outcome
Petitioners' shares to be purchased at a value of £2,420,000 as at 10 March 2006, reflecting a 30% minority discount applied to both business value and cash surpluses.
Legal Topics
Unfair Prejudice, Share Valuation, Minority Discount, Excessive Director Remuneration, Remedies Under Companies Act
Company Law Equity Unfair Prejudice Share Valuation Minority Discount Excessive Director Remuneration Remedies Under Companies Act

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Parties

Patricia Mary Irvine

Petitioner

Michael Cleobury Thatcher and Patricia Mary Irvine as Trustees of the Accumulation and Maintenance Settlement dated 6 August 1993

Petitioner

Ian Charles Irvine

Respondent

Campbell Irvine (Holdings) Limited

Respondent

Procedural Posture

Company Law Petition (section 459 Companies Act 1985) / Valuation of Shares Following Judgment and Buy Out Order

Legal Issues

  1. 1 How should the petitioners' minority shareholding in CIHL be valued for the purposes of a buy-out order following a finding of unfair prejudice?
  2. 2 Should a minority discount apply to the valuation of the petitioners' shares?
  3. 3 How should excess remuneration drawn by the majority shareholder/director be treated in the valuation?

Ratio Decidendi

The petitioners' 49.96% shareholding in CIHL must be valued as a minority interest, subject to a 30% minority discount, with both the notional cash surplus (arising from excessive remuneration) and the actual cash surplus (undistributed profits) treated as company assets subject to the same discount. The overall value of the petitioners' shares as at 10 March 2006 is £2,420,000.

Court Disposition

Petitioners' shares to be purchased at a value of £2,420,000 as at 10 March 2006, reflecting a 30% minority discount applied to both business value and cash surpluses.

Orders

  • Ian Charles Irvine to purchase or procure the purchase of the petitioners' shares in CIHL at £2,420,000 as at 10 March 2006.
  • Valuation includes minority discount of 30% applied to both business value and cash surpluses.