Shareholder fall out - forced exit
When shareholders fall out - can the remaining shareholders (remainer) or the departing shareholder (leaver) force a sale/ purchase of the leaver’s shares, and at what price? Often the parties fail to reach agreement on price and negotiations reach stale mate and frustration.
Re: Euro Accessories Ltd  EWHC 47 (Ch) is a case in which the remainer held 75% so was able to pass a written resolution to amend the articles of association to create two classes of share and to allow him compulsorily to acquire leaver’s shares at fair value.
The remainer then implemented the new provisions, acquired leaver’s shares and tendered a cheque for the fair value which leaver declined to cash.
Can the majority really use their powers like this – to force leaver to sell and at a price potentially not acceptable to leaver? The judge in re: Euro Accessories seemed to think so (although did not have to decide on the point). This could be rather handy for clients.