Objection to a variation of class rights, Business Law and Ethics

Objection to a variation of class rights:

The company proposed to reduce its share capital by repayment of the 5% 1 pound Cumulative Preference Shares (which were entitled to repayment of capital in priority to ordinary shares)  and to effect repayment by the allotment to the holders an equivalent amount of 6% unsecured loan stock, repayable 1985/90.  The trustees of trusts which held 90% of the issued preference shares voted at a class meeting in favour of the scheme because they had been advised that as holders of 52% of the company's ordinary stock and non-voting ordinary shares they would derive overall benefit from the change.

It was held that the resolution passed at the class meeting was invalid since the trustees who provided the majority of votes cast were not concerned with benefit to holders of the preference shares as a class.  They had instead considered what was best in their own interests, based on their large holding of stock and ordinary shares.  Although this case came to the court for approval of the reduction of share capital and not as an objection to variation of class rights, it is in fact the leading case on the principles which the court will apply in dealing with the objection to a variation of class rights approved by a majority of the class.

Posted Date: 1/15/2013 3:04:55 AM | Location : United States







Related Discussions:- Objection to a variation of class rights, Assignment Help, Ask Question on Objection to a variation of class rights, Get Answer, Expert's Help, Objection to a variation of class rights Discussions

Write discussion on Objection to a variation of class rights
Your posts are moderated
Related Questions
Ben sold clothes at a market stall on weekends for a number of years. Two years ago business was very poor and Ben was forced to cease trading. Ben sold all of his remaining stock

A man is standing at a bar.  His friend Sam says to him, "Jim, it was Claude who scratched your car and slashed all your seats." Two days later Jim is found beaten i

Technique of Reference to Arbitration Whereas a dispute may be referred to arbitration through like as; The parties in accordance by the agreement and The court wh

Question 1: What are the duties of the holder of a Tourist Enterprise Licence, as provided by the Tourism Authority Act? Question 2: What are the relevant consideration

Explain the controversial mode of acquisition - accession The ontroversial mode of acquisition is accession . It involves the peaceful transfer of territory from one sovereig

What is the use of reprisal the use of reprisal should also be categorized under the heading of the lawful use of force. It is defined as a counter action taken by a state to p

Question 1: Taking the case of Mauritius, in the machinery of government, the Procurement Policy Officer is the central organ of the Government that regulates the procurement

Question 1: "A revolutionary change is occurring in the theory and practice of public administration. The approach known as New Public Management is seen by many as the new par

Correspond With Description - Terms Used In Contract With S.15 provides that, where goods are sold through description whether is an implied matter that the goods correspond w

Words are imprecise. Interpretation of words and the passages in which they are contained is a difficult task, but one nonetheless that is required when Courts are asked to apply t