Samuel Okoronkwo Jr. held a consultation with the client regarding a dispute arising from a property development venture operated through a special purpose vehicle (SPV). The company was formed to acquire and convert residential properties into HMOs. The client had provided full funding for the acquisition and refurbishment, while the other directors were responsible for project delivery and refinancing. One director has since exited the business, and the remaining director is demanding a payment of £15,000 to relinquish his shares, which are required to refinance the property and avoid repossession. The property is located in the South Coast region.
The client is concerned that the remaining director’s conduct amounts to unfair prejudice and breach of contract. The refinancing is time-sensitive, and the bridging lender has made it clear that the director must be removed from the transaction. The client is considering whether to pay the £15,000 under protest or pursue litigation.
Samuel Jr. advised that the conduct may give rise to claims under section 994 of the Companies Act 2006 and for breach of contract. However, given the urgency, he recommended proceeding with the payment under duress to secure control and refinance, while reserving the right to litigate subsequently. Counsel advised that the transaction be handled via solicitor, with signed share transfer and resignation forms held to order and funds exchanged through a client account. The client confirmed that a solicitor is engaged and that the lender is now mediating the resolution. The matter continues to progress with the client focused on securing control and mitigating further financial exposure.
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