Services for Business
Corporate and Commercial Services
We were engaged by our client a London-based, successful serial entrepreneur in the insurance industry to advise him in connection with his negotiations for a license to manage and operate an online B2C insurance platform.
The licensor was offering a fairly standard licence arrangement and were taking a tough stance. We managed to adjust our client’s position in the deal offering him a preferred position and various other non-standard enhanced commercial rights, such as options to purchase the platform and limited post-termination restrictions, whilst reducing the client’s exposure under the licence agreement under certain provisions.
Following the suggestion of a meeting between the parties and their respective solicitor, we managed to discuss and resolve all outstanding issues in a relatively short timeframe.
The outcome was that our client was delighted with our services, not only were we able to negotiate a better solution, but with the timeframe being significantly reduced due to our expedited responses, we were able to reduce the client’s legal spend, which came in below our original quote and within his budget – The client commented: “…Can't thank you enough for the speed and professionalism you have shown in dealing with my issue . The way you handled the transaction was very reassuring.
Resolution of a Freehold Property Company Shareholder Dispute
Our client, a Freehold Property Company based on Central London was embroiled in a longstanding shareholder dispute.
The issue centred around property transactions which were concluded in 2002 during which an incorrect distribution of shares in the company had occurred. This had directly resulted in dilution of all shareholders, diminution of value of share capital and reduced dividends for the bona fide shareholders of the freehold company.
The company had approached two separate law firms over the course of the dispute, both of whom had failed to provide any solution to the company and the shareholders’ losses continued.
There was also a risk that due to the historic nature of this issue, that the situation would be forever irreversible and that should subsequent purchasers acquire the properties or shares on a bona fide, arm’s length transaction for valuable consideration, the company would be left with no option to take action. This therefore became a time-sensitive client matter.
In order to resolve the issue, and before Gregory Abrams Davidson was in a position to advise the company as to its options, the Corporate team led by Jonathan Abrams, Partner, undertook a detailed forensic analysis of all available company information, conducted on four separate levels, involving:
- Review of Company Data: correspondence, company records, current and past company Articles of Association, Shareholder documents, Companies House data.
- Review of Related Party Data: Files held by the property management company, accountants, previous law firms (one of whom had ceased trading).
- Review of Stakeholder Data: Information held by and interviews with current and former owners, tenants and residents of the building, procurement of witness statements, sales contracts, stock transfer documentation. (This third step was further complicated by the fact that there were a number of former residents and owners who were unresponsive and it was thought untraceable and only after tracking down their current whereabouts were we able to obtain this highly material information.)
- Review of Publicly Available Date: Personal background searches, Company searches (on the company and related parties – where there was the suspicion of professional negligence), land registry records.
The body of information that Gregory Abrams Davidson was able to obtain led to our advice that:
- The transactions could be unwound under contract law.
- The public Company information would need to reflect the above advice.
In light of the above, there was a potential risk of litigation from the parties who would ultimately lose out if our advice was followed. The company was advised of this risk and that this aspect would need to be properly managed.
After advising the Company’s Board of Directors, an Extraordinary General Meeting of the shareholders was called. The meeting which took place offsite was chaired by Jonathan Abrams and the firm’s findings were disclosed. After a somewhat “heated” shareholder meeting where the legal issues and options were explained, it was resolved that the company would follow GAD’s advice, which involved documenting the unwinding of the transaction and accurately (perhaps painstakingly) reviewing and revising and re-submitting fifteen years of incorrect Companies House filings with the correct corporate information.
Though GAD’s advice and the measures taken were strongly contested by the other parties to the transaction (who had been incorrectly awarded with company shares), the action taken by the company, followed by GAD’s robust responses have resolved this longstanding and complicated client problem.
Jonathan Abrams’s thoughts following conclusion: “This historic case was potentially risky from the company’s and from GAD’s point of view. It involved property issues and shares in a valuable property company. Put simply, we could not risk being wrong with our advice and the prescribed remedial action. We were able to resolve a 15 year old matter in just under 12 months. The client company and its directors were ultimately very satisfied with our service.”
In the Company’s words: “We wish to mention Jonathan Abrams for solving a long-standing problem. This was a fifteen year old issue that we had been told could not be solved because of the length of time that had passed.”