. . Them-Marsh Academic Masters' In Law stow Questions The total word count for all questions shOuld NOT exceed 4500 words. Any words over this total will not be marked. PART A (30 marks) Critically assess the UK Government's proposals for \"Strengthening corporate governance in pro-insolvency situations\" in any three of the six areas in Part 1 of \"Insolvency and Corporate Governance - Government Response\Academic Masters' in Law WWW PART B (4:: marks]: Winnie Banks. Albert Park. Coulby Newham and Lynne Thorpe set up in business together when they were made redundant from their jobs as human resources (HR) professionals. Their business was set up and run through a private limited company called Hemiington HR Ltd (\"Hemlington\"). Hemlington offers bespoke HR services to small businesses in the Teesside area. to meet the demand for the provision of HR services to businesses which are too small to support their own HR function. Prior to setting up. Winnie worked in HR for twenty years. and has considerable experience. At the time of her redundancy. she was a senior HR business partner. Albert and Lynne have worked in HR for three years. each of them having joined after graduation as HR assistants. A year before their redundancy. each of them had been promoted to HR business partner. Coulby Newham is an HR assistant. in view of their different levels of skill and experience. they took different shares in the capital of Hemlington. Details of Hemlingtcin are set out in Document A. Extracts from a Shareholders' Agreement. entered into between the four shareholders in Hemlington when it was incorporated. are contained in Docurnent Et. Winnie was recently approached by Norman Bee. a freelance HR systems specialist from London. Norman runs his business through a limited company. Norman Bee IT Ltd ("NBIT"). which has clients all over the country: one of which is Hemlington. Norman was originally planning to run his own business from Middlesbrough. as his wife had recently taken up a position as centre-forward at a small local football club. However. after lengthy discussions with Winnie. a proposal was put together to merge the businesses of Hemlington and NBIT. The draft document to agree the terms of the proposal is set out in Heads of Agreement at Document c. The draft proposal was presented by Winnie to the board of directors of Hemiington. Initially. it was poorly received. Albert was adamant that he wanted nothing to do with the proposal, saying that things were ne as they were. He particularly objected to the appointment of Norman as a director. claiming that in his opinion. it had always been clearly understood that only the four of them would participate in the management of Hemlington's business. He was reassured that Coulby and Lynne were also quite negative. They. too. said that they planned to reject the proposal if Winnie were to formally table it. Albert's expectation that the proposal would be rejected was rmly entrenched by the time of the next board meeting when it was to be formally considered. So he was very shocked when. as the directors went into the meeting. Coulby and Lynne said that they had changed their minds since having discussions with Winnie. and now planned to vote in favour of the proposal and agree the detailed terms of it as set out in the Heads of Agreement. Academic Masters' in Law \"W'E'He'llw 1. Identify and briey explain the resolutions which would need to be passed by Hemlington: {aj at any meetings of the board of directors: and {bl by the shareholders by written resolution: in order to implement the proposal; together with: {cj any further consents or agreements required to be given or entered for any part of the proposal. 2. Assess whether Albert would be able to prevent any of the resolutions being passed if ail other parties were to agree with andlor vote in favour of any resolutions relating to the proposal (whether as shareholders or directors}. 3. Evaluate the likelihood of success if Albert were to petition under section 994 of the Companies Act zone to prevent the proposal proceeding. Assume that the proposal was implemented two years ago. as contemplated by the Heads of Agreement. and Norman entered into a Deed of Adherence to the Shareholders Agreement. The business of NBIT was gradually absorbed by Hemlington. A year after the acquisition had been completed. all new contracts were being run through Hemlington. At the end ofthe first year after its acquisition, NBIT's bank loans and creditors were repaid. NBIT was by then a dormant "shell" company with no assets. Last week. a letter before action was received from a customer. Bill Ingham. who runs three bakery shops (\"the Bakery Business"}. The claim relates to matters which occurred shortly after the proposal in the Heads of Agreement was implemented. Within the three months after NBIT's acquisition by Hemlington. Bill had put the provision of the Bakery Business's Hit function out to tender. NBlT. still conducting new business at this point. had submitted a tender. which contained some cost projections. Bill had queried these with Norman, saying that they looked too good to be true. Norman had said that he had prepared them himself. and that as he had over 20 years' experience in the preparation of cost projections for HR outsourcing, Bill could take Norman's own word for it that the projections were reliable. On the basis of those assurances. Bill accepted NBIT's tender. It is now clear that the projections had been negligently prepared. and that. as a result. the cost savings to Bill have not come to pass. Bill's letter of claim purports to identify causes of action against each of NBlT. Norman and Hemlington. 4. Critically analyse the legal basis [or absence of legal basis} of any action by Bill against NBIT. Norman Bee and Hemlington. You do not need to consider the merits of the action. {all} marks} Academic Masters' in Law \"\"\"ma'fhlaw PART c {an marks} [The facts continue from Part B] Despite these matters. the merger with NBIT was generally successful. However. Albert's dislike of Norman made working relationships very difcult. and Albert became more and more disillusioned. As a result. the parties have now agreed that Albert should leave HHR iTeeside} Ltd (\"the Company'}. and it has been agreed that the Company will buy back Albert's shares at 12 per share. This will be nanced by a loan of200.[100 from South Bank Put; ("the Loan\"). with the remainder being nanced by cash. The Loan will be secured by way of a debenture giving security over the assets of the Company. Albert will also resign as a director. A copy of the Company's balance sheet is set out in Document DI. Assume: a that these are the relevant accounts for the purposes of Part 18 of the Companies Act 2005. and the sums stated as \"prot and loss" are available prots within the meaning of section ?'1 1; - the Company has not taken advantage of any rules allowing it to keep information on the register kept by the Registrar of Companies. and keeps all of its own registers at its registered office. Prepare a detailed memorandum advising the Company as to: a the resolutions which would need to be passed by the Company in order to implement the proposals: 0 by the shareholders in general meeting; and D at a meeting of the board of directors; - together with: a key procedural steps and time limits involved; 0 any further consents or agreements required to be given or entered for any part of the proposal; 0 the accounting entries required as a result of the buy-back of Albert's shares. Your memorandum should include reference to all of the documents and paperwork necessary (including those requiring filing at Companies House), briefly explaining the purpose of each document and identifying any constitutional or legislative requirement relating to it. {so marks) Total marks availabie: 1CD marks