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That section provided that: "Section 151(2) does not prohibit a company from giving financial assistance if (a) the company’s principal purpose in giving the assistance is not to reduce or discharge any liability incurred by a person for the purpose of the acquisition of shares in the company or its
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T. Brady & Sons Ltd and its subsidiaries went through restructuring after the two brothers that owned the majority of shares fell out and wished to divide the company's assets. One part of the process involved paying financial assistance to reduce liability on the company buying some of the
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held the requirement is the assistance is given in good faith and in the best interests of the company, a subjective standard . He rejected that a ‘larger’ purpose of freeing deadlock would suffice for almost anything, and so on this ground the exemption was not fulfilled.
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holding company, or the reduction or discharge of any such liability is but an incidental part of some larger purpose of the company, and (b) the assistance is given in good faith in the interests of the company."
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The acquisition was not a mere incident of the scheme devised to break the deadlock. It was the essence of the scheme itself and the object which the scheme set out to achieve.
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shares. The fact that it was financial assistance was accepted, but it was argued that this was not the main purpose, relying on the exception in section 153(2) of the
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432:"Companies Act 1985, section 153"
364:Re Scandinavian Banking Group plc
463:1988 in United Kingdom case law
458:United Kingdom company case law
134:relating to the prohibition on
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408:. Law Teacher. Archived from
323:Second Company Law Directive
115:Shares, financial assistance
312:Re Bradford Investments Ltd
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136:financial assistance
130:case decided by the
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58:2 WLR 1308
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151:(now the
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180:See also
163:Judgment
110:Keywords
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45:Decided
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279:AC 462
56:AC 755
393:Notes
367:Ch 87
303:AC 11
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142:Facts
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