DO YOU HAVE A “CHANGE OF CONTROL” IN YOUR SHAREHOLDERS AGREEMENT?

 

DO YOU HAVE A “CHANGE OF CONTROL” IN YOUR SHAREHOLDERS AGREEMENT?

 

In the recent English case McKillen –v- Misland (Cyprus) Investments Ltd (2012) the Court decided that, a principle applicable to pre-emption articles is that, a right to deal freely with a share, is an important attribute of ownership, and prima facie right of a shareholder, and that the existence and extent of restrictions on transfer such as pre-emption rights, shall be clearly stated.

 

The above case involves -the back- door take over, by the Barclays Brothers of COROIN LTD, the company which owns the hotels Claridge, the Connaught and the Berkeley. The Barclays Brothers, obtained the control of Coroin Ltd, not by acquiring shares directly in Coroin Ltd, which would have been a violation of the pre-emption provisions contained in the Articles of Association of COROIN LTD, and of a Shareholders Agreement, but by acquiring the title of shares in Misland (Cyprus) Investments Ltd, which was a shareholder of Coroin Ltd.

 

The English court held that the above acquisition was not in breach of the terms of those particular pre-emption rights.

 

The above English case has made it clear, that the pre-emption rights provisions must expressly contain:

 

  1.           i.   restrictions on transfer of the legal title of the shares.
  2.          ii.   restrictions on transferring, or creating any interest to prevent the transfer of the beneficial interests outside the pre-emption provisions.

 

 

  For further information on this topic please contact Mr. Soteris Pittas at SOTERIS PITTAS & CO LLC, by telephone (+357 25 028460) or by fax (+357 25 028461) or by e-mail (spittas@pittaslegal.com).

 

 

The content of this article is intended to provide a general guide to the subject matter. Specialist advise should be sought about your specific circumstances.

PUBLICATIONS 2014

CYPRUS: ANTI-SUIT INJUNCTIONS GRANTED BY CYPRUS CO...
10 Dec 2014 11:07

CYPRUS: ANTI-SUIT INJUNCTIONS GRANTED BY CYPRUS COURTS FOLLOWING WEST TANKERS   For long the trad [ ... ]

read more
CYPRUS: SERVICE OF JUDICIAL AND EXTRAJUDICIAL DOCU...
18 Nov 2014 13:06

CYPRUS: SERVICE OF JUDICIAL AND EXTRAJUDICIAL DOCUMENTS IN CIVIL AND COMMERICIAL MATTERS AS PER REGU [ ... ]

read more
Cyprus may no longer be a tax optimised route for ...
13 Nov 2014 08:09

Cyprus India Relations. Cyprus may no longer be a tax optimised route for Indian funds or may it?  [ ... ]

read more
WHERE DOES MANAGMENT AND CONROL LIE?
23 Oct 2014 13:42

WHERE DOES MANAGMENT AND CONROL LIE?               This short note is dedicated to the tes [ ... ]

read more
JUDICIAL SYSTEM AND COURT PROCEDURE
15 Oct 2014 09:33

CYPRUS: JUDICIAL SYSTEM AND COURT PROCEDURE     JUDICIAL SYSTEM AND COURT P [ ... ]

read more
SERVICE OF WRIT OF SUMMONS TODEFENDANT FOREIGN COM...
03 Sep 2014 08:30

CYPRUS: SERVICE OF WRIT OF SUMMONS TODEFENDANT FOREIGN COMPANIES, WHICH HAVE CYPRIOT RESIDENT DIR [ ... ]

read more
ASSET PROTECTION & CYPRUS INTERNATIONAL TRUSTS
25 Jul 2014 10:00 ASSET PROTECTION & CYPRUS INTERNATIONAL TRUSTS

   ASSET PROTECTION & CYPRUS INTERNATIONAL TRUSTS
A.      WHAT DOES ASSET PRTECTION  [ ... ]

read more
Cyprus: A holder of an International Arbitral Awar...
21 Jul 2014 12:24

Cyprus: A holder of an International Arbitral Award, before its registration in Cyprus, under the Ne [ ... ]

read more
Cyprus: The issue whether a person, is signatory t...
21 Jul 2014 12:23

Cyprus: The issue whether a person, is signatory to an arbitration agreement, shall be decided by th [ ... ]

read more
Cyprus: As a general principle, the mere fact that...
21 Jul 2014 12:21

Cyprus: As a general principle, the mere fact that there are multiple parties and multiple issues, w [ ... ]

read more
District Court of Nicosia Rules that a Russian Cou...
30 Jun 2014 12:35

District Court of Nicosia Rules that a Russian Court Creditor Cannot Seek Directly its Enforcemen [ ... ]

read more
CYPRUS: CORPORATE TAXATION - IMPORTANT PRACTICAL Q...
07 Mar 2014 10:49

CYPRUS: CORPORATE TAXATION - IMPORTANT PRACTICAL QUIDELINES IN ASCERTAINING THE PLACE OF EFFECTIV [ ... ]

read more
More Publications 2014

Subscribe to our Publications

Image
We are dedicated to providing our clients with outstanding, highly personalized, legal representation.
Chrysanthou Mylona 10 
3030 - Limassol, Cyprus
© Soteris Pittas & Co LLC. All Rights Reserved.
Image