Coffee and a Case Note
Coffee and a Case Note
James d'Apice
[Poor audio] Scientific Management [2019] NSWSC 1643
7 minutes Posted Jan 1, 2020 at 6:00 am.
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“If you’re making me buy the shares, tell me how much they’re worth!”  

In a recent judgment, s232 commercial unfairness was made out.  The proceedings concerned a company with a significant value.  

HH put it best: “large payments (were) made by (the defendant) without consultation, unsupported by contemporaneous records and at odds with basic accounting principles or, on occasion, common sense” : [44]  

There were also findings of commercial unfairness on the basis of: withheld information ([212]), “self-interested and unfair” transactions supported by “hazy memories and old grudges” ([250]), and on “financially disastrous” risks taken over the objection of the other shareholder ([276])  

With s232 unfairness found, the Court elected to exercise its s233 discretion and order a share sale: [286]  

Aaaaaaaaaaaaaaaaaand then there’s >50 paragraphs of valuation material for our forensic accounting friends to work through: [297] – [350]  In the end, the buyout ordered exceeded $50M: [351]