INSTRUCTION: This is A PROBLEM QUESTION, while Advising David on whether Christopher and Andrew can remove him as a director and whether he may be able to bring any legal claims. , you should identity the legal issues, state the relevant law /legislations, apply the law to the facts while using case law to back up your point or explain your point[ this should be the main bulk of your answer] then you provide a comprehensive conclusion. pls address each issue individually. use the sample I’m uploading as a guide for answering a problem question on directors’ duties/ shareholder remedies. when answering a problem question analysis is key, so that should be main focus while answering the question asked. you should go straight to the point, there is no need for a lengthy introduction. do not write a bibliography or a reference list, just mention any legislation, cases as you are writing. DO NOT EXCEED THE 1000 WORDS WORD COUNT
Christopher, David and Andrew have run a successful wine business, DAC
Uncorked Ltd, since its incorporation in 2012. They mainly supply to local
restaurants and also to several wedding venues. They pride themselves on
carefully selecting the most luxurious wines to complement their client’s menus.
Andrew and Christopher are brothers in law. Each serve as one of the directors of
the business; with Chris in charge of existing contracts, David of procurement and
Andrew of Human Resources. They hold the existing issued share capital of 900
ordinary shares of £1 each equally. From incorporation it was decided that the
company would seldom declare dividends and would instead reward its three
owners by directors’ renumeration. This was never specifically stated in the articles
of association but was an unwritten understanding between them.
The company has grown so much from its incorporation that it now has a fleet of
10 delivery branded vans and 30 staff in its warehouse to manage deliveries and
distribution.
The pandemic has certainly caused changes for the company with weddings
cancelled and restaurants seeing a drop in bookings. If it were not for the increase
in individuals bulk ordering wine to consume privately at home, the directors have
commented that they might not have ridden out the pressured financial times. The
current financial climate is still requiring them to keep a really close eye on cash
flow and ensure that they procure as much work as possible.
A few months into the pandemic Christopher and David started to sense in board
meetings that Andrew was acting a little differently and almost defensively. A few
weeks later it transpired from a lunchbreak conversation between David and one
of the delivery drivers, Jim, that Andrew had often been using one of the company
vans at the weekend (often for himself but also lending it to friends who have been
moving to a new house). It also transpired that he has used company money to
pay for damage to one of the vans which he caused in a minor road traffic accident.
Andrew has not told the other directors about his use of company property. When
David angrily confronts Andrew about this, Andrew reminds David about the
contracts that David diverted to another wine merchant company run by his wife.
This diversion of potential work has lost the company thousands of pounds in profit.
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David agrees that he will not say anything to Christopher as he knows himself the
diversion of custom to his wife’s company was unacceptable.
Relations between Andrew and David have been strained since their heated
discussion and the atmosphere has been unbearable. Christopher demands to
know what has been going on. Both directors’ spill everything to Christopher who
is furious. Christopher soon calms down and forgives his brother-in-law Andrew.
On the other hand, however, he insists that David must be removed from his
position within the company. Andrew knows that he is lucky to have Christopher’s
forgiveness so reluctantly agrees with Christopher that David should be removed
as a director.
Advise David on whether Christopher and Andrew can remove him as a director
and whether he may be able to bring any legal claims.
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