Boardroom and shareholder disputes can have devastating consequences. Employers must guard against disagreements between directors over the future direction of the company, conflicts of interest, inflated egos and failure to address poor performance whilst at the same time ensuring that the company complies with its legal responsibilities.
In the context of board-level appointments and terminations our team of specialist employment lawyers regularly advise employers and directors on a diverse range of issues including:
- controlling the timing of an exit and a new hire
- announcement obligations for listed companies
- remuneration package, for directors
- additional quasi-legal obligations, such as the FCA/PRA/ABI/NAPF guidelines
- value and structure of equity
- payments in lieu of notice
- liquidated damages, contingency payments and what constitutes frustrating action
- garden leave
- restrictive covenants
- removal of directors from office
- limitations on termination payments and severance payments in quoted companies
Emotional factors can raise the stakes. Board members are often the founders of the company with significant shareholdings and therefore greater bargaining power.
Our recent experience includes:
- advising a majority shareholder and director on the termination of employment of another director and his removal from office as quickly, efficiently and amicably as possible whilst contemporaneously arranging for the company to acquire for cancellation the shares of the outgoing director
- negotiating a binding settlement agreement with a director in which he agreed to resign and to account to the company for funds he had previously misappropriated in breach of his fiduciary duties
- drafting a ‘without prejudice’ settlement offer letter and script for use by the board of a private limited company to encourage a director and minority shareholder to resign and offer his shares to the other shareholders in the absence of any pre-emption rights in the articles of association of the company
- bringing a derivative action in the High Court against the managing director of a property investment company for reimbursement of unauthorised payments, an account of his dealings with the company, an account of profits made using the unauthorised withdrawals (plus tax incurred as a result of the withdrawals) and an indemnity for costs.
How Fox & Partners can help…
- we identify our clients’ objectives early and work towards achieving those objectives within the relevant statutory framework and taking account of emotional and financial factors
- we understand that boardroom and shareholder disputes can be particularly stressful and time-consuming. We aim to provide timely bespoke advice and to suggest practical solutions, to facilitate round table settlement discussions where possible resorting to litigation only when it is necessary and cost-effective.
Please call us on 020 7618 2400