Green Pastures Pty Ltd (GPPL) is a Queensland company that was established by Ra
ID: 2562569 • Letter: G
Question
Green Pastures Pty Ltd (GPPL) is a Queensland company that was established by Ray and Sharon Green in the 1960s as a family dairy farming business. Ray and Sharon passed away in the 1990s and, in
keeping with their vision, ownership of the company was transferred to their children Dave, James and Oona. As the eldest, Dave was appointed managing director (MD) and assigned 70% of the shares. As the much younger siblings, James and Oona were minority shareholders (15% each) and company employees. They have historically sat on the board. Now, however, Dave has retired as MD and elected his daughter, Geraldine, as his replacement. Geraldine has degrees in agriculturalscience and tourism, and is keen to make sure that GPPL remains viable in face of increasing climate uncertainty. Based on her own assessment of GPPL’s situation, she decides that GPPL will make an immediate shift away from dairy farming and into tourism. To facilitate the change, Dave will sell 15% of his shares in GPPL to a large tourism operator, Glamping Travel Ltd. Geraldine has told James and Oona that they will cease being employed by GPPL. James and Oona describe Geraldine’s proposal as a betrayal of Ray and Sharon’s legacy. They point out that Dave oversaw a successful transition to organic milk production in the early 2000s, but the
move was designed to provide job security for the family members and so was consistent with Ray and Sharon’s wishes. They are also outraged by Geraldine’s steadfast refusal to discuss her plan at
board meetings and Dave’s move to call a general meeting to remove James and Oona as directors. Advise James and Oona on any remedies they may have under Part 2F.1 Corporations Act 2001 (Cth).
Explanation / Answer
Facts of the case:
The family farming business was being done by Green Pastures Pty Ltd (GPPL) with Dave, James and Oona. All are executive members,(members and also employees).Dave was succeeded by Geraldine and 15% of his share transfered to Glamping Travel Ltd. Geraldine wishes to transfer a part of business to tourism wing.
The proposals being made are:
Provision of law:
This case can be dealt with by the Corporations act 2001 and employment laws.
Analysis:
Remedies:
The case clearly comes under oppression of minority and the minority members can claim the remedies laid down in Part 2F.1 of corporations act 2001.
The remedies are, they can apply for the court to pass an order against the unfair practices of majority which were affecting the interests of minority and the company as a whole in a prejuidice manner.
The court may,
The Court can make any order under this section that it considers appropriate in relation to the company, including an order:
(a) that the company be wound up;
(b) that the company’s existing constitution be modified or repealed;
(c) regulating the conduct of the company’s affairs in the future;
(d) for the purchase of any shares by any member or person to whom a share in the company has been transmitted by will or by operation of law;
(e) for the purchase of shares with an appropriate reduction of the company’s share capital;
(f) for the company to institute, prosecute, defend or discontinue specified proceedings;
(g) authorising a member, or a person to whom a share in the company has been transmitted by will or by operation of law, to institute, prosecute, defend or discontinue specified proceedings in the name and on behalf of the company;
(h) appointing a receiver or a receiver and manager of any or all of the company’s property;
(i) restraining a person from engaging in specified conduct or from doing a specified act;
(j) requiring a person to do a specified act.
Order that the company be wound up
(2) If an order that a company be wound up is made under this section, the provisions of this Act relating to the winding up of companies apply:
(a) as if the order were made under section 461; and
(b) with such changes as are necessary.
Conclusion:
Hope it helps,
Thank you.
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