DCC 162/2006

This case looked at whether it was possible for a company director to sell all a company's assets to a competitor. The key issue was that the director's actions should be in the company's best interests. If they were not even if the director had a mandate to carry out the transaction they were not legitimate.

Background

The Claimants, who were partners in a company, brought forward proceedings against a number of respondents, including their company's director, members of the board of directors and a number of companies which had contracted with the company.

The substance of their claim was to impeach the company's director, and a number of board of directors' and render actions of the director null including the sale of all the company's assets to a number of the respondents, who were competitors of the company.

The director alleged that the actions which had been taken were in line with its authorization under the company's constitutional documents to undertake all sales necessary for the operation of the company.