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*Insolv.https://www.51lunwen.org/liuxuelunwendx/ Int. 141 In Gamlestaden Fastigheter AB v Baltic Partners Ltd1the Privy Council had toconsider whether a member of a company could make an unfair prejudice application for reliefwhere a company was insolvent, would remain insolvent whatever order was made on theapplication, and thus where relief would confer no financial benefit on the applicant qua shareholder.
In 1989, Gamlestaden Fastigheter AB (G) and a Mr Karlsten (K) agreed to undertake a joint businessventure to invest in commercial property in Germany. To this end, a Jersey corporate vehicle, BalticPartners Ltd (B), was incorporated with 5,000 issued shares. G held 22 per cent of the shares while78 per cent were held, directly and indirectly, by a company owned and controlled, directly andindirectly, by K. As well as G's equity investment, its parent company (at G's request) also madeavailable substantial loans and guarantees to B--consistent with an apparent understanding betweenthe parties that G would provide the funding, and K the expertise, for the joint venture.

Following several alleged acts of mismanagement by its directors, B became insolvent. Gsubsequently made an application under art.141 of the Companies (Jersey) Law Act 1991--aprovision which substantively mirrors s.459 of the Companies Act 1985--on the ground that:

“the company's affairs are being and have been conducted in a manner which is unfairly prejudicial tothe interests of … some part of its members (including 留学生论文代写at least the applicant member …).”

The relief sought by G was an order that the directors pay damages to B for breach of their duties tothe company.

The directors succeeded in having the initial application struck out, and G's subsequent appeal beforethe Court of Appeal of Jersey dismissed, on the grounds that the alleged improprieties by B'smanagement could not have caused G any loss in its capacity as shareholder. As the company wasinsolvent--and, crucially, would remain insolvent even if the directors were ordered to pay damages toB--relief could not confer a financial benefit on G qua shareholder. Only creditors would stand tobenefit from the relief sought and G's true loss was in this capacity. As art.141 was a shareholderrather than creditor remedy, the directors argued, the application must thus be an abuse of process inthese circumstances. G appealed to the Privy Council.

It was held that, on the proper construction of arts 141 and 143 (and thus ss.459 and 461 of theCompanies Act 1985), an application for relief would not inherently be precluded simply because therelief sought would not benefit the applicant in its capacity as shareholder.

Noting that G's investment in B comprised both equity and debt elements, the court felt that it was“somewhat artificial” and “inconsistent with the purpose of these statutory provisions” to insist thatonly loss causing a reduction in the value of the former could constitute qualifying loss for thepurposes of art.141. The court stressed that this was particularly true in circumstances where aninvestor in a joint venture company had agreed to both subscribe for shares and advance loan capitalin pursuance (an本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。