Texas court halts sale of Dippers

[cleavers]

It is likely to be about how much they have lost in earnings from the asset.

I know, but then my house had trebled in price, but they still repossessed it because I couldn't make the payments (or sell my asset).

 

[moomba]

It is likely to be about how much they have lost in earnings from the asset.

I know, but then my house had trebled in price, but they still repossessed it because I couldn't make the payments (or sell my asset).

If you offered to pay the mortgage in full before they repossessed the house, and they said no and still sold the house you might have something to say.

 

[Dr.Faustus]

I very much doubt, the decision being a High Court one, that a full transcript of the trial will be produced (or if the issue does not go to an appeal, even a judges verdict report on a legal database is somewhat unlikely for some time- though I stated this would shed some light as it would be the more likely attainable document, pending further trials).

As I pointed out earlier in the thread to another member you, having been to the trial, are more acquainted with the facts of the case than others merely reading media reports- so thanks for clearing up the uncertainty of whether the AoA and directors duties were advanced and advocated during the trial (seemingly not).

As a default position I would agree with you that it would be contrary to CA 2006 and any case that I have before read, for a board of directors to sell the company without regard to the 'benefit of the company as a whole'. It will be interesting if this, as it appears, goes on to a full trial on appeal as the role RBS played, in negotiations both in previous months (when the re-structuring of leveraged debt was agreed) and now, was obviously a significant one. It seems to be the case that RBS, having played a role in the appointment of MB, also forced upon H&G a change of boardroom power in the Articles of Association so that this type of event could happen (a sale without the permission of H&G). I would agree with you here that the board should still have had a fiduciary duty to act in the best interests of the 'company as a whole' under §171-177 CA 2006, however this may be a case (the first I can think of) where §172 will be argued by the board as the rationale for the selling decision. Inconceivable, I know, as §172 since its inception has been thought of as 'window-dressing' and, in reality, not in the self-interest of directors. It will further be interesting to see whether, subject to appeal, the board has acted with proper purpose (as seemingly the finance forwarded by Mills was rejected by both the board and RBS).

To postulate on this matter further, the priority relationship- between the directors duties to the company (since administration was pending) and, with this to mind, directors duties to the creditors- is unclear and a string of case law for prioritising either can be drawn from precedent. Maybe the fact that Administration was a certainty formed part of the decision not to strictly adhere to §171-177. A definitive decision on this basis would be an authoritative one that could refine and bring clarity to the law- for this reason a court case argued on this basis may be, as well as quite entertaining for those looking in, important.

Learned Dr - for us laymen could you sum up what 172 says in a nutshell? Cheers

Dr. in name and not title (yet?) unfortunately!

§172 is fairly self explanatory;

§172. Duty to promote the success of the company
(1)A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—

(a)the likely consequences of any decision in the long term,
(b)the interests of the company's employees,
(c)the need to foster the company's business relationships with suppliers, customers and others,
(d)the impact of the company's operations on the community and the environment,
(e)the desirability of the company maintaining a reputation for high standards of business conduct, and
(f)the need to act fairly as between members of the company.

(2)Where or to the extent that the purposes of the company consist of or include purposes other than the benefit of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes.
(3)The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company

The effect of §172 in practise, is less straightforward. Usually, it is not in the interest of a director to have regard to §172 (as with sufficient power- 50%, ordinary resolution) a director can be removed from their position (in effect, sacked) without reason, not withstanding any claim for loss of remuneration etc. So, to go against the will of the shareholders (and consider as a priority other stakeholders) under ordinary circumstances is not in a directors self-interest. However, as MB (and presumably some of the other board members) are stepping down anyway, the will of H&G had no effect on their position. It will be interesting to see if the board members who were on the side of MB keep their positions (and knew they would) under NESV and whether in subsequent court cases adjudge this to be a conflict of interest, at the time.

 

[Forzacitizens]

felt quite sorry for Hicks following that interview on SSN

 

[mike channon´s windmill]

Learned Dr - for us laymen could you sum up what 172 says in a nutshell? Cheers

Dr. in name and not title (yet?) unfortunately!

§172 is fairly self explanatory;

§172. Duty to promote the success of the company
(1)A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—

(a)the likely consequences of any decision in the long term,
(b)the interests of the company's employees,
(c)the need to foster the company's business relationships with suppliers, customers and others,
(d)the impact of the company's operations on the community and the environment,
(e)the desirability of the company maintaining a reputation for high standards of business conduct, and
(f)the need to act fairly as between members of the company.

(2)Where or to the extent that the purposes of the company consist of or include purposes other than the benefit of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes.
(3)The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company

The effect of §172 in practise, is less straightforward. Usually, it is not in the interest of a director to have regard to §172 (as with sufficient power- 50%, ordinary resolution) a director can be removed from their position (in effect, sacked) without reason, not withstanding any claim for loss of remuneration etc. So, to go against the will of the shareholders (and consider as a priority other stakeholders) under ordinary circumstances is not in a directors self-interest. However, as MB (and presumably some of the other board members) are stepping down anyway, the will of H&G had no effect on their position. It will be interesting to see if the board members who were on the side of MB keep their positions (and knew they would) under NESV and whether in subsequent court cases adjudge this to be a conflict of interest, at the time.

Cheers - should be entertaining then as others have commented - providing it gets court - quite nebulous , as the law can often be. 1 (d) would be interesting if Henry went down the stadium expansion route , but he´ll maintain a diplomatic silence on that one for the time being

 

[Cambridgeblue]

I know, but then my house had trebled in price, but they still repossessed it because I couldn't make the payments (or sell my asset).

If you offered to pay the mortgage in full before they repossessed the house, and they said no and still sold the house you might have something to say.

So in laymans terms......

I borrow £200,000 from a n other bank for my house, then a few years in, I can't make the interest payments, so they repossess my house. After losing a court hearing over the matter, I sue the bank for £1m damages.

I can see I'm bound to win that one.

Not quite... you borrow £200,000 from the bank to buy a house and then a few years later you can't make the repayments. Let's say you've paid interest only rather than paying off any capital so as to make the situation a closer analogy to the H&G situation.

The bank then sells your house (we'll ignore the technicalities of repossesion for the moment) via an estate agent.

Two buyers come forward, both offering straight cash... one offers £200,000 and the other offers £220,000.

If the bank chooses the higher offer you get £20,000... so wouldn't you be pissed off if they chose the lower offer? The bank gets repaid the same either way so why should it care who buys the house???

 

[hello]

That’s a very concise summarisation the doc man,

Without the full details of the case it’s almost impossible to think hicks has as case, i can’t think of any instance where a creditor has been in such a position of power and its "appointed directors" acted for the stakeholder before the shareholder, it seems to go against everything, i can well see the yanks winning this in court and getting a payoff from rbs at our expense, so even more unusual is not only did rbs disregard the shareholders of the debtors but they waive fees and disregarded the interests of their shareholders i.e. the uk public.

 

[The Fixer]

felt quite sorry for Hicks following that interview on SSN

What was said mate?

 

[hello]

If you offered to pay the mortgage in full before they repossessed the house, and they said no and still sold the house you might have something to say.

So in laymans terms......

I borrow £200,000 from a n other bank for my house, then a few years in, I can't make the interest payments, so they repossess my house. After losing a court hearing over the matter, I sue the bank for £1m damages.

I can see I'm bound to win that one.

Not quite... you borrow £200,000 from the bank to buy a house and then a few years later you can't make the repayments. Let's say you've paid interest only rather than paying off any capital so as to make the situation a closer analogy to the H&G situation.

The bank then sells your house (we'll ignore the technicalities of repossesion for the moment) via an estate agent.

Two buyers come forward, both offering straight cash... one offers £200,000 and the other offers £220,000.

If the bank chooses the higher offer you get £20,000... so wouldn't you be pissed off if they chose the lower offer? The bank gets repaid the same either way so why should it care who buys the house???

As you were in court did the famous letter actually have any reference to placing the stakeholders above that of the shareholders and why is the nesv bid so good without promising the stadium development to red tops are harping on about

 

[blueinsa]

Sums it up for me as well mate and is the reasons im disgusted by it all.

Fair and level playing field for all.........MY ARSE!

LOL, I don't think I will bother changing my bank of 31 years over this.

Anyone outraged by the way a bank looks after itself, wouldn't ever use a bank, and there are a shit load of other, much worse, reasons to boycott a bank.

Liverpool are slightly less screwed this week than they were last week, unless NESV have some large rabbit in their hat.

I couldn't give a flying how Liverpool are tbh mate, they are so far behind the 8 ball now im not worried but i am alarmed and frankly disgusted at the way RBS have acted in all this and how they can so flippantly waive off payments to suit their own agenda. I assume that you as a tax payer who helped bail the fookers out isn't that arsed but i and many others will be im sure.

Lets all hope they never screw you over....i wonder if you would LoL then?