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Home > Country profiles > UK (England and Wales) > Articles > Article detail

Dispute Resolution Update: Watchstone Group plc v Quob Park Estate Ltd and others

Saturday, 5th November 2017

"Background facts

The Petitioner, Watchstone Group PLC (formerly Quindell PLC) (“the Petitioner”), had a 19% shareholding in a company called OS3. They sought relief under section 994 of the Companies Act 2006 (“CA 2006”) on the basis that the company’s affairs had been conducted in a manner that was unfairly prejudicial to the interests of some, or part, of the members, including itself, and alternatively to its interests.

An exclusive distribution agreement was signed between the Petitioner and the Company on 30 September 2011. Between then and late 2014, the Company was significantly dependent on the Petitioner, who made a number of loans to the Company. In 2014, new directors were appointed and the new management wanted the Company to operate separately from the Petitioner. A dispute arose and a settlement agreement was entered into on 22 December 2014 which allowed the Petitioner to elect to obtain a further 14% of the shareholding in the Company. This election was made on 31 January 2015.

On 2 June 2015, the directors of the Company asked the shareholders to pass a special resolution (“the Special Resolution”) to allow it to allot new shares, with the result that the Petitioner’s shareholding was diluted. All the shareholders, apart from the Petitioner, were sent the proposed Special Resolution by email (there was a dispute as to whether the Petitioner was ever provided with the notice of the proposed Special Resolution). The Special Resolution was passed with more than 76% of the shareholders’ votes and is dated 8 June 2015.

There followed a private placement, as a result of which, the Petitioner’s interest in the Company was diluted from 33% to 5.3%. The Petitioner alleged unfair prejudice."

Read in full: 

Source: Rosling King LLP
Language: English
Contact: Georgina Squire

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