Talk:Foss v Harbottle
From Wikipedia, the free encyclopedia
 |
This article is within the scope of WikiProject Law, an attempt at providing a comprehensive, standardised, pan-jurisdictional and up-to-date resource for the legal field and the subjects encompassed by it. |
| Stub | This article has been rated as Stub-Class on the assessment scale. |
| Mid | This article has been assessed as Mid-importance on the assessment scale. |
 |
This article is supported by WikiProject England, an attempt to build a comprehensive guide to articles relating to England on Wikipedia. If you would like to participate, you can edit the article associated with this page, or visit the project page, where you can join the project and/or contribute to the discussion. |
| Stub | This article has been rated as Stub-Class on the quality scale. |
Some notes from a Law lecture on this
[edit] What happened
- Company was setup
- Original incorporators sold their assets (land) to the company
- They did this at a significant overvaluation
- One of the other shareholders was unhappy about the company purchasing these assets at a significant overvaluation.
- The damage was done to the company, not to the shareholders
- Thus the shareholders..can’t sue as the breach was not done to the shareholders, it was done the company, and the company would need to sue
- Before the company would sue, it would need the consent of the directors (effectively they need to “sue themself, which they would not allow. Hence the problem
- The court ruled the shareholders can’t sue on behalf of the company
[edit] Ruling
Can’t pick and choose the when the circumstances suit to negotiate this. Company can choose to ratify these actions Shareholders can not take action against the company.
[edit] Exceptions
Insider trading. Original interpretation, was a wrong to the company, not the shareholder.
Personal wrong. If the wrong was specifically done to you, then you can sue. Creates a personal right of action.
Fraud. Needs to be very serious, bordering on criminal. Individual shareholders have a right of action.
Special Resolution. Would be required to sanction an action. Normally you need a 50% agreement for most transactions, if special resolution = 75% necessary, then shareholder can take action.
