Successfully defended a majority shareholder against a minority shareholder’s pre-emptive claim

Our Dispute Resolution lawyers represented a holding company (owning 90% of the shares in a subsidiary) in defense against a pre-emptive claim brought by a minority shareholder. The dispute arose when the majority shareholder convened a general meeting of shareholders of the subsidiary, during which the replacement of the board of directors was to be considered. The minority shareholder brought a pre-emptive claim seeking an injunction to prevent the meeting from taking place and to prevent the replacement of the board. The applicant argued that the replacement of the members of the board would cause damage to the company and, consequently, reduce the value of the applicant’s shares. The aim of the claim was, in fact, to be granted interim measures to preserve the powers of the company’s board of directors. The subsidiary brought a corresponding claim.

After hearing our client’s position, the court dismissed the claim. The court reasoned that the exercise of a shareholder’s voting rights is not in itself an unlawful act. The court held that the claimants had not proved that the majority shareholder’s desire to change the board of directors created a substantial risk of damage to the claimants.

We are also pleased that the court awarded the client a significant amount of legal costs.