MI Squared Limited v Jeremy King

MI Squared Limited v Jeremy King

Directors' fiduciary duties to creditors in insolvency context override contractual obligations under SHA unless improper purpose is established; Proposed New Loan was at least one reasonable option open to directors; balance of convenience favours refusal of injunction due to risk of irreparable harm from administration.

Parties
Claimant: MI Squared Limited; Defendant: Jeremy King; Defendant: Christopher Corbin; Defendant: Zuleika Fennell; Defendant: Robert Holland; Defendant: Corbin & King Limited; Interested Party: CK Opportunities Fund I
Jurisdiction
England and Wales
Judgment Date
16 February 2022
Procedural Posture
Application Under S.44 Arbitration Act 1996 / Ruling on Urgent Injunctive Relief
Outcome
Application for injunction refused
Legal Topics
Directors' Duties, Shareholders Agreement, Injunctions, Fiduciary Duties, Creditor Interests, Corporate Governance
Company Law Arbitration Insolvency Directors' Duties Shareholders Agreement Injunctions Fiduciary Duties Creditor Interests +1 more

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Parties

MI Squared Limited

Claimant

Jeremy King

Defendant

Christopher Corbin

Defendant

Zuleika Fennell

Defendant

Robert Holland

Defendant

Corbin & King Limited

Defendant

CK Opportunities Fund I

Interested Party

Procedural Posture

Application Under S.44 Arbitration Act 1996 / Ruling on Urgent Injunctive Relief

Legal Issues

  1. 1 Whether directors breached shareholders agreement by entering Proposed New Loan without majority shareholder approval
  2. 2 Whether directors' fiduciary duties override contractual obligations under SHA
  3. 3 Whether Proposed New Loan was in best interests of company and creditors

Ratio Decidendi

Directors' fiduciary duties to creditors in insolvency context override contractual obligations under SHA unless improper purpose is established; Proposed New Loan was at least one reasonable option open to directors; balance of convenience favours refusal of injunction due to risk of irreparable harm from administration.

Court Disposition

Application for injunction refused