C, a company, was a shareholder in D but also a creditors of D. C sued D’s directors under Jersey version of section 994, alleging unfair prejudice caused by mismanagement. If action was successful, D would receive funds that were enough to pay off D’s creditors but not enough to allow for any distribution (in form of dividends) to D’s members. D sought to have action struck out on grounds that C was sung in capacity as a creditor. Held:
· C may sue for corporate relief (i.e. payment of money to company in which he is a member) only if there is some financial benefit to be derived from that by C.
· However this financial benefit need not be in C’s capacity as a member
Ø Suffices that it is in C’s capacity as a creditor.
· Thus fact that any money received by D would be used to pay off C as a creditor (and that there would be none left to give to D’s shareholders) did not matter.
· Thus C not barred from making s.994 application.