Re Bird Precision Bellows [1984] Ch 658

• Issue was as to how shares were to be valued for purposes of making buyout order.

Held

• “Fairness” is most relevant factor when setting price for buyout order.

• As general principle, fair price is that which could have been obtained by Claimant on market

  • I.e. there will be a minority discount

• However where company is “quasi-partnership”, conduct of parties is relevant.

  • If Claimant is unfairly prejudiced through no fault of his own, share price will be pro rata

    • I.e. value of shares is the average value of share in company based upon total value of all shares

  • if Claimant makes unilateral decision to leave company of his own accord and prejudice only occurs towards him as result of others learning of his decision, will be minority discount

    • I.e. Claimant has no automatic right to be bought out at full value where he wants to leave for reasons unrelated to the prejudice

  • if Claimant’s conduct justifies his exclusion from company, will be minority discount