Rejecting a buyout offer in a quasi-partnership company not necessarily fatal to securing a just and equitable winding up

Case briefing: Asia Pacific v ARC Capital LLC

Facts

• Investment Co T belonged equally to Messrs C and K.
• It was common ground that T was a “quasi-partnership”
• C sought a winding up on the just and equitable ground
• K offered to buy C’s interest in T at a so called fair value and claimed C’s application to wind up was therefore an abuse of process.

Decision

A petitioner for a winding up who rejects a buyout offer at fair value should normally expect to have his petition dismissed. In quasi-partnership cases it is not necessarily unreasonable to reject a buyout offer solution.

Principle

If a joint venture company is effectively a quasi-partnership things become less objective. A 50% shareholder is allowed to take the view that a fair solution to a breakdown would be;

• For him to buy out the other party
• For both parties to sell to a third party
• For the company to be wound up.