Court Protects Wind Farmer When Board Freezes Him Out

When the co-founder of two companies in the wind farm business was effectively ‘frozen out’ of them by his fellow shareholders and excluded from participating in their management, he went to court asserting that ‘unfair prejudice’ had been exercised by the other shareholders.



After a three-year legal battle, the High Court ruled that his rights as a minority shareholder had been unfairly prejudiced. The settlement he will receive is yet to be decided, but will be substantial: the two companies have a combined market value of between £10 million and £15 million. It is likely that (as is usual in such cases) the Court will order the majority shareholders to buy out his shares in the companies at a fair price.



Whilst minority shareholders may have little statutory right of redress, it is the responsibility of the board of directors to govern the company in the interests of the shareholders as a whole, not just the majority shareholders. When they fail in this duty and prejudice the position of the minority shareholders as a result, redress through the courts may be the best solution.