Lundsten v Affinitas Topco Ltd – Getting the Agreement Right When Taking On Investment

Victor Lundsten had a vision about how international schools should be run. He started a group of K-12 schools that, unlike its competitors, would let each school keep its own soul.  

Up to 2020, he and his wife Nathalie were funded the early groundwork by identifying acquisition targets, mapping out the vision, doing the unglamorous work that comes before any investor takes you seriously. Then came Oakley Capital. 

For more information, please read the full case on Lundsten v Affinitas Topco Ltd [2025] EWHC 3423 (Ch) 

“We Won’t Get Too Involved”

Oakley is a well-regarded private equity firm with a particular reputation that they back entrepreneurs and, supposedly, stay out of their way. It was exactly the kind of partner Lundsten was looking for. He approached Oakley’s Samuel Fenton-Whittet in August 2020, and after eighteen months of negotiations, during which both Peter Dubens (Oakley’s founder) and Fenton-Whittet apparently assured Lundsten that he would be the decision-maker. 

Affinitas Topco Limited (Affinitas) was incorporated in November 2021 and Oakley held 80% of the ordinary shares through a Luxembourg holding entity. Lundsten held 12%. The board was structured to give Oakley a majority of seats, but the understanding, Lundsten says, was that Oakley would be a hands-off backer, trusting him to build the thing they’d all agreed to build together. 

For a while, it worked. Affinitas grew rapidly and within three years it had 18 schools and over 13,000 students across Spain, Italy, Mexico and the United States, becoming one of the fastest-growing international school groups in the world.

The Falling Out

The relationship between Lundsten and Oakley deteriorated quickly with each side giving different reasons. 

Fenton-Whittet’s account was that the trouble began when Lundsten pushed to involve his wife Nathalie as a full-time employee and, eventually, a board presence. Oakley had been explicit from the start; he says, that she would not have an ongoing role. When employees began raising complaints about her involvement and Lundsten became “very emotional” when he was told of Oakley’s position, the dynamic shifted.  

In the summer of 2024, Oakley formally notified Lundsten that Nathalie should not attend board meetings or have contact with Affinitas staff. 

Lundsten tells a different story entirely. His version centres on Oakley’s decision to separately invest in Thomas’s London Day Schools, a prestigious London group, and what he saw as a subsequent attempt to merge Thomas’s accounts with Affinitas’s in a way that would obscure the financial damage of that deal. He believed the Thomas’s acquisition was a mistake, one he never would have sanctioned within Affinitas, and he felt Oakley was trying to paper over it at his expense. 

What’s clear is that by late 2024, the relationship had deterioated to such an extent that even a question about a job title was no longer something two businessmen could resolve over the phone. 

Getting the Agreement Right When Taking On Investment

The Right to Appoint a New Chair

Earlier in 2024, both parties agreed that Affinitas needed an experienced Chair, someone to provide governance as the business scaled. Lundsten recommended Clarissa Farr, a respected figure in UK education.  

On 5 November 2024, Affinitas appointed Ms Farr as Chair. She was given a significant salary increase, reportedly 150% above what she had previously earned in her role as Chief Education Advisor. She began chairing board meetings and was held out publicly and internally as the company’s Chair. There was just one problem: she was not, and was never made, a director of Topco. 

Fenton-Whittet says that as early as April 2024, Lundsten was told the Chair would not be a director of Topco (because appointing her as one would reduce Oakley’s board majority), and that Lundsten agreed, even asking Oakley to inform the recruitment agency accordingly. 

Lundsten disputes this. He says he only raised his objection to the arrangement in late October 2024, and that the objection was entirely principled, rooted in what the articles of association actually said. 

Lundsten issued a claim form in March 2025 to challenge the appointment.

What the Articles of Association Say

The whole dispute came down to one sentence in Addinitas’ Articles of Association. Article 14.1 read: 

“The Directors may appoint a Director to be the chairman of Directors’ meetings.” 

Oakley’s position was that “may” was permissive, the directors had a power to appoint a chairman, and that power was not restricted to directors alone. The word “Director” described a possible appointee, not the only permissible one. If the drafters had wanted to exclude non-directors, they argued, the article would have said “may only appoint a director.” 

Lundsten’s position was simpler: the article says what it says, the person appointed must be a director. 

Chief ICC Judge Briggs, sitting in the Business and Property Courts, considered the language carefully, examining how the modal verb “may” operates in different legal contexts, the syntax of the sentence, the surrounding articles, and the general principles of contractual interpretation established in landmark cases including Arnold v Britton and Rainy Sky v Kookmin Bank.  

His conclusion was unambiguous: the plain meaning of Article 14.1 is that directors do not have to appoint a Chairman at all, but if they choose to do so, that Chairman must be a director. Affinitas had breached its own articles. 

The Importance of the Argument

By the time the case came to court, Lundsten had already lost his directorship, removed, he says, unlawfully and had his shares stripped through contractual mechanisms exercised by parties with an obvious interest in the outcome. He had filed an unfair prejudice petition under section 994 of the Companies Act, seeking a buyout of his shares on the basis that his exclusion from the business was prejudicial and contrary to his legitimate expectations as a founder. 

The Chair dispute, viewed in isolation, might look like a pedantic argument over corporate governance. But the judge saw it clearly: the same facts that gave rise to this claim are the same facts at the heart of the unfair prejudice petition. Whether Ms Farr’s appointment was valid, and whether Lundsten’s objection to it was legitimate or just obstructive, could matter enormously in the bigger fight over whether he was pushed out fairly. 

The two sides spent nearly £500,000 in legal costs arguing the point.

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