And when they do, the consequences can be serious — not least for the value of the business itself.
In a recent High Court decision — Chave v Farnsworth and others [2026] EWHC 970 (Ch) — Buss Murton Law acted for the successful petitioner in a significant unfair prejudice claim involving a quasi‑partnership company.
The case is a clear reminder of what can happen when trust breaks down in owner‑managed businesses — and how quickly both relationships and shareholder value can be put at risk.
What went wrong?
Two equal shareholders. A business built on trust. Then a rapid escalation:
- Serious allegations of fraud and misconduct — later found to be entirely unfounded
- One party shut out of the business entirely
- Company assets and operations moved into a separate entity
After a detailed trial, the Court found the respondent’s actions to be unreasonable, unjustified — and ultimately unfairly prejudicial.
Why this matters
The judgment reinforces some important principles:
- Unfair prejudice is judged objectively — genuine belief isn’t enough without evidence
- Quasi‑partnerships demand fairness and good faith
- Heavy‑handed tactics can backfire — badly, often harming the underlying business in the process
Crucially, the Court confirmed it will use its wide discretion to achieve fairness — including selecting a pre‑dispute valuation date where a party’s conduct has damaged the business or artificially depressed its value.
In this case, that meant a share buy‑out valued at £294,785 as at 1 May 2024 — before the impact of the dispute could erode the petitioner’s position.
If things go wrong
Timing is critical.
If a dispute starts to develop, early advice from a professional firm of solicitors with a proven track record in this field can make a significant difference — whether that’s de‑escalating the situation, protecting your position, or preserving evidence.
Just as importantly, early intervention can help limit damage to the business and protect shareholder value before issues spiral.
Unfair prejudice claims are complex and often fast‑moving. Taking advice early can help avoid missteps that make matters worse.
The bigger picture: prevention is better than cure
Cases like this don’t start in the courtroom — they start at the very beginning of a business relationship.
Too often, shareholders rely on trust alone. But when circumstances change, that trust can be tested — and without the right framework, both the relationship and the enterprise value of the business can quickly come under pressure.
At Buss Murton, we work with business owners before problems arise to:
- Put in place robust shareholder agreements
- Agree clear decision‑making structures and roles
- Build in practical dispute resolution mechanisms
- Define fair exit routes and valuation methods
Done properly, these steps don’t just reduce the risk of disputes — they help protect the long‑term value of the business and the interests of its shareholders.
Our view
When relationships break down, the impact can be swift and damaging — but this case shows the Court will act decisively where fairness demands it.
It also serves as a reminder that preserving enterprise value and shareholder interests should be front of mind — both at the outset of a business relationship and if difficulties begin to emerge.
At Buss Murton, we combine preventative advice with a strong track record in shareholder disputes — supporting clients at every stage, from setting up the relationship to resolving matters when they go wrong.
Get in touch
If you’re entering into a business partnership, reviewing existing arrangements, or facing the early stages of a dispute, our team is here to help.
Contact Buss Murton on 01892 510 222 or email info@bussmurton.co.uk to discuss how we can help you protect your position — and the value you’ve built.
For bespoke advice on this or any other area of law, get in touch with the team now.
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