LAW 459/506D: Stakeholder Remedies
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Questions and Answers

What was the ruling on a shareholder's right to demand a poll at a meeting?

  • It was a breach of duty by the chair owed to the company, not to individual shareholders. (correct)
  • It was a right that could only be exercised with the majority's approval.
  • It was a personal right that could be exercised without permission from the company.
  • It was a breach of duty by the chair owed to individual shareholders.

    • What was the consequence of courts allowing personal actions by shareholders against directors and officers?

  • It limited the liability of directors and officers.
  • It led to a decrease in corporate litigation.
  • It allowed for more shareholder remedies.
  • It created confusion over what actions were derivative. (correct)

    • What was the outcome of the reports on corporate law in the UK and Canada?

  • They resulted in a reduction of shareholder remedies.
  • They led to statutory responses. (correct)
  • They were considered quite satisfactory.
  • They led to a reform of the corporate law system.

    • What was the primary issue with the approach to shareholder remedies?

    <p>It was unclear and created confusion.</p> Signup and view all the answers

    What was the exception to the rule in Foss v. Harbottle?

    <p>A limited set of exceptions that allowed for suits by shareholders.</p> Signup and view all the answers

    What is a characteristic of a shareholder's personal right?

    <p>It can be exercised without permission from the company.</p> Signup and view all the answers

    What was the result of the courts' approach to shareholder remedies?

    <p>It created confusion over what actions were derivative.</p> Signup and view all the answers

    What is the term for a shareholder who begins a lawsuit on behalf of the company?

    <p>Derivative claimant.</p> Signup and view all the answers

    What is an example of an exception to the rule in Foss v. Harbottle?

    <p>A personal action by a shareholder against a director.</p> Signup and view all the answers

    What is the term for a lawsuit brought by a shareholder on behalf of the company?

    <p>Derivative action.</p> Signup and view all the answers

    What is the term for a shareholder who is treated unfairly by the company?

    <p>Oppressed shareholder.</p> Signup and view all the answers

    Study Notes

    • Stakeholders in a corporation have various mechanisms to address breaches of their rights or fiduciary duty breaches by directors and officers.
    • Canadian corporate statutes typically include statutory remedial provisions to address grievances.
    • The statutory derivative action is a remedy that allows stakeholders to address breaches of fiduciary duties by directors and officers.
    • The oppression remedy is a statutory provision that provides relief to stakeholders who have been oppressed by the conduct of directors, officers, or shareholders.
    • The appraisal remedy is a statutory provision that allows shareholders to dissent from certain corporate actions and receive fair value for their shares.
    • Compliance orders, rectification, and investigation are other remedies available to stakeholders under Canadian corporate statutes.
    • The historical development of stakeholder remedies in Anglo-Canadian company law is complex and inconsistent.
    • The statutory derivative action requires leave of the court, and the court grants leave if there is a reasonable case on the face of the facts and the action appears to be in the interests of the corporation.
    • Courts have shown a willingness to disregard shareholder ratifications of conflict of interest transactions where the interested party voted as a shareholder.
    • The oppression remedy was enacted to address difficulties faced by minority shareholders in challenging abuses by majority shareholders.
    • The oppression remedy allows stakeholders to seek relief for conduct that is oppressive, unfairly prejudicial, or unfairly disregards their interests.
    • The oppression remedy is not limited to shareholders and can be used by creditors and other stakeholders who have been negatively affected by the conduct of directors, officers, or shareholders.

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    Description

    This quiz covers the mechanisms by which stakeholders can address breaches of their rights and fiduciary duties by directors and officers in a corporation. Topics include statutory remedies and grievance procedures in Canadian corporate law.

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