SPIRIT AEROSPACE TULSA JOBS

As to the power of the court to award interest under a Section 461 order, it was held that an order for interest is not beyond the powers of the court. The court can make adjustments in the valuation process which means that the court is actually valuing shares, not as they are, but as they would have been if events had followed a different course; and that practice is regularly followed by the court in orders under Section 461(1). In these circumstances, it was held, a denial of the court's power to award interest would be unacceptable.

Fair Valuation Date under the Companies Act.

According to Walker LJ, the authorities show that there are two main considerations which the court has to bear in mind in deciding what valuation date is fair on the facts of the particular case:

1. 1. One is that the shares should be valued at a date as close as possible to the actual sale so as to reflect the value of what the shareholder is selling.
2. 2. The rival consideration is that the date of the petition is the correct starting point. This is because the date of the petition is the date on which the petitioner elects to treat the unfair conduct of the majority as in effect destroying the basis on which he agreed to continue to be a shareholder, and to look to his shares for his proper reward from participation in a joint undertaking. Although the Court of Appeal in Profinance opted for the second (i.e. that the date of the petition should be the valuation date of the shares) as the better stating point, it did conclude that there may be circumstances where fairness would require that another date be used. Another date, according to Walker LJ, may be more fair in the following cases:

where a company has been deprived of its business, an early valuation date (and compensating adjustments) may be required in fairness to the claimant. where a company has been reconstructed or its business has changed significantly, so that it has a new economic identity, an early valuation date may be required in fairness to one or both parties. But an improper alteration in the issued share capital, unaccompanied by any change in the business, will not necessarily have that outcome. where a minority shareholder has a petition on foot and there is a general fall in the market, the court may, in fairness to the claimant, have the shares valued at an early date, especially if it strongly disapproves of the majority shareholder's prejudicial conduct.

but a claimant is not entitled to a "one-way bet" and the court will not direct an early valuation date simply to give the claimant the most advantageous exit from the company, especially where severe prejudice has not been made out.

all these points may be heavily influenced by the parties' conduct in making and accepting or rejecting offers either before or during the course of the proceedings.

Also, it should be noted that recent case law has clearly established the reluctance of the courts to allow section 459 of the Companies Act to be widely used to force the company's hand when its controlling shareholders not acting improperly. The clear message from the courts is that the parties are expected to behave like adults and talk to each other with a view to one party being bought out.