QuickHelper

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About QuickHelper

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Teaching Since: May 2017
Last Sign in: 259 Weeks Ago, 6 Days Ago
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Education

  • MBA, PHD
    Phoniex
    Jul-2007 - Jun-2012

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  • Corportae Manager
    ChevronTexaco Corporation
    Feb-2009 - Nov-2016

Category > Law Posted 19 Sep 2017 My Price 10.00

WORKSHOP FOUR QUESTIONS

 

 

WORKSHOP FOUR QUESTIONS

Question One

What is the difference between:

(a)    a managing director and a chair?

(b)   a nominee director and an alternate director?

 

Question Two

Kelvin-Decline Ltd manufactures and wholesales fashion clothes. The company has 3 directors, including Kelvin, the managing director. The company does not have a constitution. The directors are negotiating to sell the company's factory and to shift manufacturing to China. All the members attend an annual general meeting of the company and the directors advise the meeting about their plans for the future. The members disagree with the factory closure and a resolution is passed by 80% of the votes that the company is not to sell its manufacturing facility. The directors tell the members that they will ignore their resolution. The members then pass a resolution removing a director. They then vote to replace the managing director.

REQUIRED

Advise the sacked directors about the matters above. If you do not consider the members have acted correctly, provide alternative procedures they could have used.

Question Three

“Directors have a duty to put the interests of shareholders ahead of any other party”. 

Do you agree with this viewpoint?

Question Four

The directors of Final Ltd have been monitoring for some time the declining sales and profitability of the company. They decide the company should change to a new product range which is predicted to be more profitable. These new products will require an increase in capital to set up a new factory and the directors make a large share issue to Mick Deadwood to obtain the necessary funds.

Lee Lion is a shareholder in Final Ltd. He is unhappy that his shareholding, which represented 26% of the issued shares, has now been diluted to 20% after the share issue to Mick Deadwood. He claims that the directors have issued the shares with the intention to dilute his shareholding so that he will not be able to block alterations to the company’s constitution. The directors reject Lee’s claim asserting that they only care about the company’s best interests. Lee is considering whether a court would find the share issue invalid.

REQUIRED

 

Describe the directors’ duty that is relevant to these facts. Include cases in your answer and discuss from the facts above those matters that the court would consider important in reaching its decision.

Answers

QuickHelper
(10)
Status NEW Posted 19 Sep 2017 04:09 PM My Price 10.00

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