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Media Ventures - How assistance was given to extricate Euroco from a joint venture agreement
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How can we extricate ourselves from a joint venture agreement and remove several senior directors who are also shareholders in order to redevelop one of our key UK investments?
This was the question asked of Media Ventures by a multi-national European company that had tried to develop a cutting edge joint venture mobile technology project in the UK.
The European company ("Euroco") was looking to Media Ventures, who have established a reputation for their expertise in investing in and developing media related companies in the UK marketplace and in particular mobile communication companies, for help and to be their new UK partner.
Euroco, had invested heavily in its UK subsidiary ("Techco") and found out after only a few months that Techco was at risk of losing one of its most important client and that its directors who were also minority shareholders were in Euroco's opinion not managing the company to its satisfaction. Media Ventures asked Davenport Lyons to advise it and Euroco on how best to achieve its objectives.
These objectives were to:
- Terminate the service contracts of two highly paid senior employee/directors whose contracts were terminable on 12 months notice;
- Terminate the existing Shareholders' Agreement and remove the minority shareholders who held 49% of the shares in the company; and,
- Resolve Techco's disputes with its creditors that included early termination of a lease (one of the shareholders was the landlord).
Michael Hatchwell and Peter Weiss advised Euroco in their negotiations with Techco's directors and shareholders who were demanding a large payout and threatening claims for breach of contract and unfair dismissal. The negotiations were complex because they involved simultaneously terminating agreements with each of the parties, several of whom had fallen out with each other. Michael and Peter worked closely with Euroco and Media Ventures and succeeded in helping Euroco to strike a deal at a significantly lower cost than it had originally envisaged.
The result of the negotiations led to the directors of Techco entering into compromise agreements, resigning and waiving their rights to bring any further employment claims. Each of the minority shareholders agreed to sell their shares, released the company from any liability and consented to the termination of the onerous lease.
With these corporate and employment issues behind them, Euroco was in a position to work with Media Ventures on ways of developing new business in the UK.
Media Ventures continues to look to other opportunities to work with joint venture partners on other media and mobile phone projects.
Any enquiries related to these types of matters or to Media Ventures
should be directed to: Michael Hatchwell and Peter Weiss from
our Corporate Department.
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