Interpretations of valuation clauses in articles of association
Consultant Andrew Strickland looks at how valuation clauses are interpreted in articles of association, by analysing the events of the court case Cosmetic Warriors Limited and Lush Cosmetics Limited [2015] EWHC 3718.
This case was heard in the High Court on 27 November 2015. Two minority shareholders had served transfer notices, seeking to dispose of their shares in two companies. The articles of association came into play, specifically the pre-emption rights on share transfers.
These provisions resulted in the company being the shareholders’ agent for the sale of the shares in one or more lots at the discretion of the directors and at the “prescribed price”.
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