Transfer of control without transfer of shares did not breach pre-emption provisions

In the matter of Coroin Ltd (sub nom Patrick Gerard Mckillen) v Misland (Cyprus) Investments Ltd & 7 ors [2013] EWCA Civ 781, 3 July 2013, pre-emption provisions in a shareholders’ agreement were not activated when a shareholder transferred control of his shares to a third party without transferring the actual shares themselves.

The claimant and appellant in this appeal, Patrick McKillen (McKillen), sought to acquire additional shares in Coroin Ltd (Coroin) in order to become the majority shareholder.

Coroin indirectly owns and controls Claridge’s, the Connaught and the Berkeley hotels. Another shareholder (Quinlan) entered in to an agreement to sell his shares to Ellerman hotels (a hotel controlled by the trustees of the Barclay family settlements (the Barclay interests)). That agreement was subject to complying with the terms of the Coroin shareholders’ agreement (and Coroin’s articles). Ellerman did not call upon Quinlan to complete the sale, as that would have triggered pre-emption provisions in the shareholders’ agreement and articles…

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