Global Energy Horizons Corporation v Gray [2019] EWHC 1260 (Ch) (21 May 2019)

Global Energy Horizons Corporation v Gray [2019] EWHC 1260 (Ch) (21 May 2019)

The assets must be valued as at 28 July 2015 based on what a willing buyer and seller would agree, considering the incomplete commercialization of the technology, the financial position of Petrosound and its subsidiaries, pledges and debts restricting income, and the lack of profitable operations. Both expert approaches were flawed, but the court must do the best it can with available evidence, avoiding speculation and reflecting commercial realities.

Citation
[2019] EWHC 1260 (Ch)
Parties
Claimant: Global Energy Horizons Corporation; Defendant: Robert Gresham Gray
Jurisdiction
England and Wales
Judgment Date
21 May 2019
Procedural Posture
Chancery Division Business List / Valuation Hearing Following Liability Judgment
Outcome
Assets valued as at 28 July 2015; court determines monetary value for interests in Petrosound and its subsidiaries acquired by Mr Gray in breach of fiduciary duty.
Legal Topics
Breach of Fiduciary Duty, Valuation of Assets, Remedies for Breach, Minority Shareholding, Corporate Restructuring
Equity Company Law Fiduciary Duties Breach of Fiduciary Duty Valuation of Assets Remedies for Breach Minority Shareholding Corporate Restructuring

Case Brief

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Parties

Global Energy Horizons Corporation

Claimant

Robert Gresham Gray

Defendant

Procedural Posture

Chancery Division Business List / Valuation Hearing Following Liability Judgment

Legal Issues

  1. 1 How to value minority and beneficial interests in Petrosound and its subsidiaries arising from breach of fiduciary duty
  2. 2 Appropriate methodology for asset valuation given incomplete evidence and experimental technology
  3. 3 Impact of pledges, debts, and control provisions on share value

Ratio Decidendi

The assets must be valued as at 28 July 2015 based on what a willing buyer and seller would agree, considering the incomplete commercialization of the technology, the financial position of Petrosound and its subsidiaries, pledges and debts restricting income, and the lack of profitable operations. Both expert approaches were flawed, but the court must do the best it can with available evidence, avoiding speculation and reflecting commercial realities.

Court Disposition

Assets valued as at 28 July 2015; court determines monetary value for interests in Petrosound and its subsidiaries acquired by Mr Gray in breach of fiduciary duty.

Orders

  • Mr Gray is liable to account to GEHC for the value of 51% of 15% of Petrosound shares held through Chiloquin and nominees, and a 51% interest in 51% of Petrosound's international ultrasound technology business.
  • Valuation to be based on findings and expert evidence as set out in the judgment.