‘Reasonable Offers’ as a Defence to Unfair Prejudice Petitions: Prescott v Potamianos

Abstract

It is long established that a ‘reasonable offer’ for a petitioner's shares can defeat an unfair‐prejudice petition. Lord Hoffmann gave guidance about such offers in O'Neill v Phillips. Now, in Prescott v Potamianos, the Court of Appeal has set out three factors that help to determine in general whether an offer is ‘reasonable’. Those factors are: the value offered; the likelihood of implementation; and the proximity to the unfairly prejudicial conduct. The Court's guidance is useful for lawyers and their clients, as well as being broadly favourable for petitioners. But the Court emphasised that the unfair‐prejudice jurisdiction is based on fairness and so requires a considerable degree of flexibility. Such flexibility impairs the certainty that Lord Hoffmann was seeking to promote, and may create difficulties for parties making or receiving offers.