Duneau v Klimt Invest SA And Others ' Just And Equitable Winding Up Petition

• Published date: 08 September 2022
• Subject Matter: Corporate/Commercial Law, Insolvency/Bankruptcy/Re-structuring, Corporate and Company Law, Insolvency/Bankruptcy, Shareholders
• Law Firm: Blaser Mills
• Author: Mr Edward Bible

In Duneau v Klimt Invest SA and others [2022] EWHC 596 (Ch) the High Court considered the winding up petition in respect of Klimvest Plc which was based on just and equitable grounds and having reviewed the authorities, wound up the company. The judgment contains a useful review of the authorities in respect of the just and equitable ground for a winding up order. The case also concerned a public company registered in England and Wales which was quoted on a French stock exchange.

The Facts

The background facts were somewhat convoluted. Klimvest Plc was the last in a number of IT companies which had been owned by Michel Balcaen and Eric Duneau. Mr Balcaen and Mr Duneau were the founders of Klimvest which was incorporated in April 2002. Klimvest had been converted to a public limited company in July 2006 and in October 2006 was listed on the Alternext exchange in Paris. At the time of the petition, Mr Balcaen was the chairman of Klimvest and the majority shareholder via Klimt Invest SA whilst Mr Duneau was a director and minority shareholder. The company had developed its IT business and had purchased a number of IT companies in various companies. In January 2019 Klimvest's business and assets were purchased by P1C for '8.25 million. The shareholders had not been able to agree what to do with the cash held by Klimvest. Mr Balcaen and his supporters wanted to use it to invest in various businesses. However, Mr Duneau and his supporters wanted the cash to be distributed and Klimvest wound up. Mr Duneau presented the winding up petition on 14 October 2020. Klimt Invest opposed the petition and asserted that the purpose or substratum of the company had not come to an end and the company was now a holding company. At the subsequent AGM in May 2021, Mr Duneau was removed as a director.

Just and equitable winding up

The Court considered the remedy of a just and equitable winding up. It noted that the starting point is the following statutory provisions:

Section 122(1)(g) of the Insolvency Act 1986 provides that a company may be wound up by the court if ' '(g) the court is of the opinion that it is just and equitable that the company should be wound up.'

Section 125(2) of the Insolvency Act provides further that:

'(2) If the petition is presented by members of the company on the ground that it is just and equitable that the company should be wound up, the court, if it is of the opinion -

(a) that the petitioners are entitled to relief either by winding up the...