COMPANIES – WINDING UP – LOSS OF SUBSTRATUM – INJUNCTION TO RESTRAIN DISPOSAL OF SHARES
The Respondent Company, which is the management company of an investment consortium, was characterised as a quasi-partnership between four persons. Two of the founders were killed in an air accident and one of them was subsequently bought out by the other. The family members of one of the deceased participants were appointed to the board of the Company by the sole surviving shareholder, director and partner of the group, and they promptly removed him from the board. With the removal of the last remaining active participant in the management company, it is alleged that the Company had been effectively paralyzed, as there was no one left with the capacity to carry on its functions and as a result the substratum of the Company has failed.
The Applicant filed (but has not yet served) a petition to wind up the company. The Applicant immediately brought an, ex parte, application for an injunction to prevent the board of the Company from removing him as a director of nine special purpose vehicles which are the investment holding companies of the consortium. He also sought an injunction to restrain the management company from disposing of its shares in the holding company through which the investment consortium was constituted and through which their shares are held. The injunctions were intended to retain the status quo until the petition for winding up can be heard or until further order of the Court.