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SHAREHOLDERS: Through the looking glass

30 September 2011  

Dov Ohrenstein reviews the law relating to reflective losses and derivative claims

Where a wrong is done to a company this will adversely impact on the value of members’ shares. If the company is unwilling or unable to claim for these losses then the shareholders will be prejudiced unless they can bring their own claim. However, there are substantial obstacles to such claims by shareholders, as shown in Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] at para 210:

Additional Info

  • Case(s) Referenced:

    Airey v Cordell & ors [2006] EWHC 2728 (Ch)

    Barrett v Duckett [1995] 1 BCLC 243

    Carlen v Drury (1812) 1 Ves & B 154

    Cinematic Finance Ltd v Ryder & ors [2010] EWHC 3387 (Ch)

    Daniels v Daniels [1978] Ch 406

    Foss v Harbottle [1843] 2 Hare 461

    Gaetano Ltd v Obertor Ltd [2009] EWHC 2653 (Ch)

    Giles v Rhind [2002] EWCA Civ 1428

    Harley Street Capital Ltd v Tchigirinsky & ors [2005] EWHC 1897 (Ch)

    Johnson v Gore Wood & Co [2000] UKHL 65

    Nurcombe v Nurcombe [1985] 1 WLR 370

    Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] 1 Ch 204

    Rawnsley & anor v Weatherall Green & Smith North Ltd [2009] EWHC 2482 (Ch)

    Rushmer v Smith (t/a Mervyn E Smith & Co) [2009] EWHC 94 (QB)

    Smith v Croft (No 2) [1988] Ch 114

    Waddington Ltd v Chan Chun Hoo Thomas [2008] HK CU 1381

    Webster v Sandersons Solicitors (a firm) [2009] EWCA Civ 830