Re London School of Electronics [1986] Ch 211

Court: High Court

Facts: The petitioner held 25% of the shares in London School of Electronics Ltd, while City Tutorial College Ltd owned the remaining 75%. The majority shareholders diverted B.Sc. students to their own institution, leading the petitioner to claim unfair prejudice. The court ordered a buy-out of the petitioner’s shares. The main issue was the appropriate valuation date for the shares.

Issue: Should the shares be valued as of the date of the petition or at the end of the proceedings?

Held: The court decided that the shares should be valued as of the date of the petition. This was because the increase in share value was attributed to the efforts of the majority shareholders rather than the petitioner.

Key Judicial Statement: Nourse LJ stated that while the general rule is to value shares as of the date of the order, fairness in specific cases could necessitate an earlier valuation date.

💡LevelUpLaw: In unfair prejudice buy-out cases, the valuation date can be adjusted to ensure fairness, particularly when one party has significantly contributed to an increase in the value of the shares.