Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION ONE: Karen holds 20% of the shares in Cumana Ltd and Marina and Neville hold the remaining 80% of the shares. Marina and Neville

image text in transcribed
image text in transcribed
QUESTION ONE: Karen holds 20% of the shares in Cumana Ltd and Marina and Neville hold the remaining 80% of the shares. Marina and Neville are the directors of the company. Karen subscribed to her shares when the company was first incorporated on the basis that the majority shareholders (Marina and Neville) would always consult with her on major matters pertaining to the operation of the company and the distribution of profits However, Karen has become aware ofthe following information. First, Marina and Neville have agreed that Cumana Ltd will expand from its Wellington base and set up branch offices in Hamilton and Auckland. These decisions were not discussed with her. Secondly, she has become aware that the directors had recently voted to increase the share capital of the company, but Karen was not offered new shares. The effect of this will be to reduce her stake in the company. Finally, she has learnt that both Marina and Neville who work for the company are receiving very large salaries compared to the relative worth of the company's business and that the board had decided not to issue a dividend this year. Karen comes to you for advice. You tell her that she may be able to apply to the court under s 174 based on oppressive, unfairly prejudicial or unfairly discriminatory conduct. She asks you to explain the action to her. Reguired: Write a short letter of advice to Karen. Your letter should include an explanation of what the terms 'oppressive, unfairly prejudicial or unfairly discriminatory' mean in this context, as well as the potential acts of oppression, prejudice and [or discrimination. Your answer should also briefly advise Karen what remedy she should seek if the Court agrees that she has been oppressed or prejudiced and why

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Business Law And Its Environment

Authors: Richard Schaffer, Filiberto Agusti, Lucien J. Dhooge, Beverley Earle

8th Edition

0538473614, 978-0538473613

More Books

Students also viewed these Law questions

Question

The relevance of the information to the interpreter

Answered: 1 week ago