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Home / News and Insights / Press / Shareholder Agreements: A solicitor’s advice

The shareholders’ agreement is a contract between the borrowing SPV and each investing shareholder setting out their respective rights and responsibilities. With potentially large sums invested in a development project, partners Hollie Gallagher and Ellen James highlight the importance of focusing on the detail of this contract, in an article for Development Finance Today.

Hollie Gallagher and Ellen James write:

‘The SPV should both own the land and have the benefit of any construction contracts etc, allowing a shareholder to continue to operate construction contracts and dispose of the scheme in the event of breaches by the developer.  In those circumstances you would expect the agreement to allow for deductions to the development management fee.  Following a successful disposal, the agreement will set out whether returns are paid on a phased basis, delayed until final disposal, agreed deductions and priority of repayment.’

The full article can be accessed on the Development Finance Today website

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