The 2014 case of Arbuthnott v Bonnyman and Ors
This is a case involving a private equity business, Charterhouse Capital Limited. The case was brought by a dissident shareholder and former executive at Charterhouse, Mr Arbuthnott, under the provisions of Section 994, Companies Act 2006.
In the period following a buyout of the business in 2001 several of the founder shareholders had retired but had retained their shareholdings. This meant that there was an increasing misalignment of the management and ownership interests. However their close alignment was considered to be essential by various investors and was a core part of the business model of the company.
At the heart of this case was an offer made for the shares of Charterhouse by a company set up by management for the purpose. Watling Street Limited. All the outgoing shareholders accepted the offer of £15.15 million in cash and loan notes for the entire share capital of the company apart from Mr Arbuthnott.
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