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Legal Capital Cases

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LEGAL CAPITAL - CASES Formation of Capital Re Bradford Investments (No.2) [1991]
D received shares in return for assets which contravened rules on payment for shares. Held:

1. D could not show the assets it had provided were of any value.

2. Therefore court relief not granted. Re Ossory Estates [1988]
Company received property in consideration for issuance of shares to D. Company had already resold the properties at a substantial profit. Held:

1. Relief from liability granted to D. Sunrise Radio [2009]
C had 15% shareholding in a company. Company made issue of shares despite knowing that C would be unable to exercise her rights o pre-emption, and as result shareholders was decreased to 8%. Sued under s.994. Held:

2. Where directors know a shareholder might not have enough money to subscribe, directors must consider what price could and should be extracted from those willing and able to subscribe

1. i.e. should not simply issue shares at par without thinking about it

3. This is particularly case where directors exercising the power stand to benefit from the exercise of power in a particular way.

4. Price that should be offered depends on circumstances of case. Variation of Class Rights 'Variation of Rights' Greenhalgh [1946]
Company's ordinary shares were divided into 50p shares, and 10p shares. Articles provided for each share (regardless of value) to get one vote each. Was proposed to sub-divide 50p shares into 10p shares, so that holders of 50p shares would then get 5 votes per share. Held:

1. Rights of 10p shareholders were not varied

1. i.e. was no formal change in rights attaching to 10p shares

2. this even though voting effectiveness of 10p shareholders was significantly diminished

2. However had the proposal been to simply give 50p shareholders 5 votes per share, this would have been variation

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