Re Sunrise Radio Ltd [2009] EWHC 2893 (Ch)

• Claimant had 15% shareholding in a company. Company made issue of shares despite knowing that Claimant would be unable to exercise her rights to pre-emption, and as result shareholders was decreased to 8%.

• Sued under s.994.

Held

• Where directors know a shareholder might not have enough money to subscribe, directors must consider what price could and should be extracted from those willing and able to subscribe

  • I.e. should not simply issue shares at par without thinking about it

• This is particularly case where directors exercising the power stand to benefit from the exercise of power in a particular way.

• Price that should be offered depends on circumstances of case.