[hmd0911]

Hi everyone...

I really need help with this study case, I have an exam on 27-8 and I wish if anyone can help me, this is a copy of it.



SCENARIO




‘Wellmade Ltd’ is a small importing company, mainly dealing in engine parts. There are three directors, Matt, David and Jim who each own 33% of the company’s shares.

Jim is the sales director for the company and, in January, he is approached by Terry, who is the owner of ‘Fastcars Ltd’. Terry has ordered car parts from ‘Wellmade Ltd’ in the past but has grown to dislike David and so does not want to deal with the company again. He asks Jim if he could supply similar parts without telling Matt and David. Jim knows that he could get the parts from abroad without the others finding out and so agrees to supply Terry in future. Two weeks later, at a board meeting, David asks Jim of he ever hears from Terry. Jim says ‘no’.

In a routine review of the company’s documentation, Matt discovers that, when the company was first registered, the memorandum of association listed the company’s objects as ‘to import food products’ (this had been the original idea before they had discovered the market for engine parts). Matt mentions this to the others but they don’t seem very interested.

Over the past year, David has found himself increasingly isolated from decision making within the company. Recently, Matt and Jim have decided that they want to get rid of David and so make it clear that they are not interested in his opinions, in the hope that he will sell his shares to them and leave the company. They hope to rely on a provision in the articles of association which requires the remaining shareholders to purchase the shares of any member who wishes to sell. Finally, David gives up and asks the others to buy his shares, which are valued at £4.50 each. They agree, but offer him 1p per share.


I hope that you can help me with this guys.

cheers

hamad