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Section B - Scenario 4
HarvestYield plc is a large agricultural company. The board of directors decides to close a profitable local farm to consolidate operations in a mega-farm 100 miles away. This decision will devastate the local rural economy and cause 50 redundancies. The directors made the decision solely to increase the annual dividend for shareholders.
Under s.172 of the Companies Act 2006, have the directors breached their duty to promote the success of the company?
ACCA · Question 57 · Management, administration and the regulation of companies
Section B - Scenario 4
HarvestYield plc is a large agricultural company. The directors of HarvestYield plc negligently purchase contaminated fertilizer, causing £500,000 in damages to the company's crops. The directors refuse to allow the company to sue the supplier because the supplier is a company owned by the CEO's brother. A minority shareholder wishes to take legal action.
What type of claim should the minority shareholder bring?
Section B - Scenario 4
HarvestYield plc is a large agricultural company. The directors of HarvestYield plc negligently purchase contaminated fertilizer, causing £500,000 in damages to the company's crops. The directors refuse to allow the company to sue the supplier because the supplier is a company owned by the CEO's brother. A minority shareholder wishes to take legal action.
What type of claim should the minority shareholder bring?
Answer options:
An unfair prejudice petition under s.994.
A derivative claim on behalf of the company against the directors for breach of duty.
A personal action against the supplier in the tort of negligence.
A petition for the just and equitable winding up of the company.
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