Leerdam Drive - Friday, 4th March

Legal Advice or

Legal Device?

The Board of the London Yard Management Company initially failed to put the resolutions, including one to sack them, on the agenda for the AGM "..on legal advice". What legal advice, you may ask?

It is understood that the advice was complicated and contained a number of options but was not presented to the Board in full. At the Board meeting full copies of the company solicitor's advice were not distributed to even those members present. It is believed that the advice did not recommend rejection of the resolutions. So, it was no surprise that when the notice of the AGM was sent to shareholders the Board did not feel sufficiently confident in its interpretation to include the legal advice in its 48 pages of landfill.

Legal advice taken by the Rejuvenation Group clearly stated that a judge would consider the actions of the Board unreasonable and that the rejection of the proposals would fail on a number of points of law.

After being informed of pending legal action, in the High Court, Board members insisted on seeing the full advice and took further legal advice. It is understood that they were advised to reach an agreement with the Group.

At a subsequent Board meeting it was agreed that the Board members would all resign, and those wishing to do so, would stand for re-election together with those nominated by the Rejuvenation Group and others that wished to be nominated. The more active Board members have decided not to seek re-election.

The proposals to bring the Articles and Memorandum of Association of the company into line with the Companies Act will be presented to shareholders at a later meeting.