Our client is the founder of a successful multi-million-pound tech business. After taking on investment, our client’s shareholding was reduced to less than 50%. When taking the investment our client was unaware of the impact this would have down the line.
After being reduced to a shareholder with under 50% shareholding our client lost control of the company. New investors intended to remove our client from the company using his weaker shareholding to their advantage and at this point our client approached us for our help.
We reviewed the conversations between the company and our client. The company made a variety of claims against our client and were using these as the “excuse” for wanting to remove him. In return for leaving, the company made our client an offer for him to leave on a ‘good leaver’ basis and to receive a settlement sum.
Our review of the company’s offer showed that it was not a reasonable offer - the effect of it would be that our client’s shareholding would become almost valueless.
We helped find a way to put our client on a level playing field with the company which involved appointing and removing directors (as allowed by the shareholders agreement) and calling for additional board meetings to make sure our client was fairly represented during the discussions about his termination.
Once our client had this fair representation he could negotiate the terms on how he left the company which is the most founder friendly approach to a situation such as this.
If you think our approach could be helpful to you, please get in touch.