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Section 994 and the Quasi-Partnership Concept tested
Mr Pinfold brought a claim under section 994, Companies Act 2006, that the affairs of Foundry Miniatures Limited were being conducted in way which was prejudicial to his interests as a shareholder.
The Company had been headed by Mr Ansell and made models for the gaming world. Mr Pinfold had worked closely with Mr Ansell for many years. They had operated another company very successfully and had both enjoyed the fruits of that success on exit. Although Mr and Mrs Ansell owned 51% of the shares it had been agreed between them that the split of the beneficial interests was 50:50.
Mr Ansell was very well known and highly regarded in the niche market in which the company operated. Relationships became soured following the illness of Mr Ansell: his wife became more involved in the operation of the company, involved several family members into the busness and Mr Pinfold was excluded. He maintained that the company was a quasi-partnership and that the exclusions was unfairly prejudicial conduct.