It will also include legitimate expectations of membership ie expectations

It will also include legitimate expectations of

This preview shows page 96 - 98 out of 250 pages.

It will also include “legitimate expectations” of membership, i.e., expectations related or connected to rights of membership. The act, proposed act, conduct or omission must also concern the interest of members in their capacity as members and not in any other capacity. For example, any act or omission that devalues shareholders’ shares or interest in the company would be a commercial detriment. It would be unfairly prejudicial for majority shareholders who are directors to dismiss minority shareholders who are also directors from the board without just cause, or for majority shareholders to divert business from the company to another company or to appropriate company property. It would also be unfairly prejudicial to prevent a shareholder from selling his shares at the best price or to compel him to sell below the market value. The following cases illustrate some of the circumstances in which unfair prejudice has been found to exist: Re London School of Electronics Ltd. [1986] Ch 211 – Shareholders who controlled 75% of a company’s shares diverted the business of the company to another company in which they were also the major shareholders. This deprived holders of the remaining 25% shares of their share of the company’s profits. It was held that this was an unfairly prejudicial conduct. Download free eBooks at bookboon.com
Image of page 96

Subscribe to view the full document.

BUSINESS ORGANISATIONS AND AGENCY MEMBERS’ POWERS AND THE PROTECTION OF MINORITIES 420 Re Cumana Ltd. [1986] BCLC 430 – Two owners of a company agreed to share the profits at the ratio of 2:1. The majority shareholder devised many ways to deprive the minority of his own share. First, he diverted the company business to another company controlled by him; secondly he made large rights issue that he knows the minority shareholder could not afford; and thirdly he got the company to pay excessive contribution to his pension fund. It was held that these conducts were unfairly prejudicial to the interest of the minority shareholder. Re Little Olympian Each Ways Ltd (No.3) [1995] 1BCLC 636 Directors of a company transferred their shares to a new company in which they had controlling interest. They then sold the assets of the company to the new company for a nominal price of £1.00. Then the directors subsequently sold their shares in the new company for £10 million. It was held that this was unfairly prejudicial conduct. Re Elgindata Ltd. [1991] BCLC 959 – The managing director of a company used assets of the company for the benefit of himself, his family and friends, but to the detriment of the company. This was held to be an unfairly prejudicial conduct. Download free eBooks at bookboon.com Click on the ad to read more MASTER IN MANAGEMENT [email protected] Follow us on IE MIM Experience #10 WORLDWIDE MASTER IN MANAGEMENT FINANCIAL TIMES 55 Nationalities in class 5 Specializations Personalize your program Length: 1O MONTHS Av. Experience: 1 YEAR Language: ENGLISH / SPANISH Format: FULL-TIME Intakes: SEPT / FEB
Image of page 97
Image of page 98
  • Fall '19
  • Corporation, Managing Partner

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes