Great Hill Equity Partners II LP v Novator One LP & Ors [2007] EWHC 1210 (Comm) (22 May 2007)

Great Hill Equity Partners II LP v Novator One LP & Ors [2007] EWHC 1210 (Comm) (22 May 2007)

Clause 6.5(b) of the option deed is an anti-dilution provision that protects GHP's putative 23% stake in Florissant's Preferred Shares only if GHP exercises the option. The rights conferred by clause 6.5(b) are conditional on the option being exercised and do not give GHP an immediate right to participate in new shareholder loans or share issues if the option is not exercised. Pre-contractual negotiations and draft Heads of Terms are inadmissible as aids to construction in this context.

Citation
[2007] EWHC 1210 (Comm)
Parties
Claimant: Great Hill Equity Partners II LP; Defendant: Novator One LP; Defendant: KRC Communications Holdings NV; Defendant: Beleggingsmaatschappij Florissant NV; Defendant: Kenn Robson; Defendant: Andrin Bachman
Jurisdiction
England and Wales
Judgment Date
22 May 2007
Procedural Posture
Commercial Court Action / Judgment After Trial
Outcome
Claim dismissed
Legal Topics
Interpretation of Contracts, Shareholder Rights, Pre Emption Rights, Anti Dilution Provisions, Admissibility of Pre Contractual Negotiations
Contract Law Commercial Law Interpretation of Contracts Shareholder Rights Pre Emption Rights Anti Dilution Provisions Admissibility of Pre Contractual Negotiations

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Parties

Great Hill Equity Partners II LP

Claimant

Novator One LP

Defendant

KRC Communications Holdings NV

Defendant

Beleggingsmaatschappij Florissant NV

Defendant

Kenn Robson

Defendant

Andrin Bachman

Defendant

Procedural Posture

Commercial Court Action / Judgment After Trial

Legal Issues

  1. 1 Whether clause 6.5(b) of the option deed entitled GHP to participate in new shareholder loans or new issues of shares regardless of exercise of the option
  2. 2 Whether pre-contractual negotiations and draft Heads of Terms are admissible in construing the contract

Ratio Decidendi

Clause 6.5(b) of the option deed is an anti-dilution provision that protects GHP's putative 23% stake in Florissant's Preferred Shares only if GHP exercises the option. The rights conferred by clause 6.5(b) are conditional on the option being exercised and do not give GHP an immediate right to participate in new shareholder loans or share issues if the option is not exercised. Pre-contractual negotiations and draft Heads of Terms are inadmissible as aids to construction in this context.

Court Disposition

Claim dismissed

Orders

  • GHP's claim for participation in the Keaton loan or July 2005 share issue is dismissed.
  • GHP is not entitled to damages.