Our client was a 50% shareholder and director of a retail cosmetics company. There was another equal shareholder/director, and, thus, no one could force an action without the other’s consent.
Our client had been putting more capital and time and felt she deserved a bigger share of the profits. Unfortunately, as is often the case, a shareholders’ agreement was not in place and we were left with the Model Articles, the Companies Act, and common sense.
During the ensuing deadlock both parties would require a much higher amount to sell than they were willing to pay in order to buy the other party. Our client had been previously trading under the company’s current trading name. We moved to trademark the name for our client, in her personal capacity. Although, that might not hold up in court eventually, the other party perceived this as a serious threat to the viability of the business overall and agreed to settle for a price per share that was 35% lower than what they were originally asking.