Automatic Self-Cleaning Filter Syndicate Ltd. v. Cunninghame

2 Ch. 34 (Eng. C.A. 1906)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

The articles of the company, Automatic vested the authority to manage the business in a board of directors. They were appointed by shareholders and could be removed by a vote of at least three-fourths of the shareholders. The directors were empowered to do anything the company could do not specifically required by statute or the articles themselves to be done by the company and “subject to such regulations as may from time to time be made by extraordinary resolution.” There were 2700 shares and McDiarmid (P), owned 1202 of them. P and others owned 55 percent of Automatic’s outstanding shares (1502). P wanted to sell the company’s assets. This was opposed by the Board as not in Automatic’s best interests. P failed to secure approval of three-fourths of the shareholders. He got a simple majority of 55 percent of the outstanding shareholders on a resolution for the sale of assets. P sued and asked the court to force the sale, which the court refused. P appealed.