Re Bird Precision Bellows [1985] 3 All ER 523

Court: Court of Appeal

Facts: P were minority shareholders in a private company who were removed from the board after a dispute with the majority shareholders. By consent, the majority were ordered to purchase the minority interest, with the price to be determined by the court. The judge found that P had been unfairly prejudiced and ordered the shares to be valued pro rata without applying a discount for the minority interest. The majority shareholders appealed this decision.

Issue: Should the shares be valued at a discounted rate for being a minority interest?

Held: The appeal was dismissed. The court held that it had the discretion to determine the buy-out price and was entitled to order the shares be valued pro rata without a discount for minority interest. This approach was deemed appropriate given the quasi-partnership nature of the company and the unfair prejudice suffered by P.

Key Judicial Statement: The court emphasized that the discretion was to do what was just and equitable in the circumstances to remedy the injustice suffered by P.

💡LevelUpLaw: In cases of unfair prejudice, especially in quasi-partnerships, the court can disregard typical market discounts for minority shares in a buy-out, focusing on what is fair and equitable.