• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Shareholders and Corporate loss.

Extracts from this document...

Introduction

Shareholders and Corporate loss. A recent Court of Appeal decision has clarified when a shareholder who has suffered a loss may have a cause of action in circumstances where the company concerned has also suffered a loss. Background The Prudential Assurance case established the principle that a shareholder in a company cannot sue for damages in respect of the diminution in the value of the shares held by him caused by a wrong to the company, at least when the company itself has a cause of action entitling it to recover for the wrong to it. Facts The claimants were the beneficiaries under a discretionary trust set up in 1989 by their father, George Walker, the founder and chairman of the Brent Walker Group Plc. ...read more.

Middle

The events that gave rise to this action were connected with efforts by Mr Walker and the Brent Walker Group Plc to prevent that company's financial collapse following the takeover of William Hill and the Mecca group of companies, and the ensuing bond issue and debt restructuring. Decision The principle in the Prudential Assurance case was considered but the Court of Appeal's decision was based on the principle that, provided claimants can prove that they have suffered a quantifiable financial loss caused by the actionable fault of the defendant, they may recover those losses as damages. The Court held that the Prudential Assurance principle will not deprive a claimant of an otherwise good cause of action in a case where: the claimant can establish that the defendant's ...read more.

Conclusion

at the suit of a company in which the claimant was financially interested, whether directly as a shareholder or indirectly as, for example, a beneficiary under a trust, would not deprive the claimant of a cause of action. The amounts claimed by the claimant beneficiaries in this case overlapped at least in part with amounts that might be claimed by the relevant company. Nevertheless, the Court of Appeal decided that the beneficiaries were entitled to pursue their claim. Comment As long as a shareholder's claim satisfies the two conditions mentioned above, the shareholder will be able to sue a third party even where that third party's conduct also gives rise to a cause of action on the part of the company in which the shareholder holds shares. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Equity & Trust Law section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Equity & Trust Law essays

  1. Equity Case Summaries

    Equity will treat it as effectively assigned, depend mainly on the following relevant questions: i. Who is the assignor/assignee? ii. Is it property capable of being dealt with? iii. Does it exist now or is it future property? iv. Is it legal property or equitable property; v.

  2. The trustees’ duty to provide information to beneficiaries.

    Consider The Queen v. The Charity Commissioners ex parte Baldwin [2001] WTLR 137 at 148-9 per Jack Beatson QC. This was of course only the first word on the topic, and I await with interest the further words which plainly will be forthcoming. TOPIC OF LECTURE Enough reminiscing of the past.

  1. “The Insolvency Act 1986 gives the court the power to set aside trusts which ...

    These types of trust have existed long before Barclays bank v Quistclose a good example of this being Toovey v Milne1. All the House of Lords did in Barclays bank v Quistclose is confirm that such arrangements could create a valid trust2.

  2. The central issue is the "complete constitution of voluntary trusts".

    However applying the judgement of Latham CJ20, Fiona would not have been acting as Jeremy's agent. The stronger argument suggests that Jeremy has not placed Rowena in a position to obtain legal title of the IT through her own actions21.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work