General

partner disputes - whistleblowing

£3.4m LLP member whistleblowing claim permitted to proceed

ByPeter Garry

Losses resulting from expulsion following whistleblowing can be very substantial, and there is no statutory limit on the amount of compensation that can be awarded.

But in some cases the expulsion of the whistleblower may:

  • be based (at least on the face of the expulsion documentation) not on the whistleblowing, but on different, lawful grounds, or
  • be achieved by way of resolution of the other members under the terms of the LLP deed, under provisions requiring no grounds to be stated.

In such circumstances it may be argued by the continuing LLP members that the chain of causation between the whistleblowing and the whistleblower’s loss brought about by the expulsion of the whistleblower has been broken, and that accordingly no recoverable loss arises.

The Court of Appeal decision earlier this year in Wilsons Solicitors & others v Roberts brings such scenarios sharply back into focus.

Derivative claims
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The advantages of derivative claims over unfair prejudice petitions

ByPeter Garry

An LLP member or company shareholder:

  • who is in the minority and thus outvoted, and
  • whose co-proprietors have misused or misappropriated business assets (including the misdirection of corporate opportunities),

may in some circumstances be able to pursue a claim against his co-proprietors on behalf of the LLP or company (even though the LLP or company is otherwise controlled by the misbehaving majority), in order to seize back the assets and/or to recover compensation for the LLP or company. Furthermore the LLP or company might well be ordered, at the outset of the claim, and throughout the conduct of the claim, to pay most of the member/shareholder’s legal costs incurred in bringing the claim.

Davies v Davies

Would-be partner of farming partnership awarded £500,000

ByPeter Garry

I previously reported on the case of Moore v Moore (2016), in which the court ordered, based on proprietary estoppel, that a farmer’s son was entitled to take over his father’s interest in the family farming partnership, despite the fact that the father wanted to leave his interest to another family member in his will….

Puppets

LLPs must keep a register of people with significant control

ByPeter Garry

From 6 April 2016 every LLP registered in England and Wales must keep a Register of People with Significant Control (PSC).  Failure to do so or to comply with the other requirements of the regulations will be a criminal offence. The significant control information will have to be filed at Companies House annually, and the…