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Law Cases
Company Law Cases
Legal Capital Cases

Chaston v SWP Group Plc [2003] 1 BCLC 675

Country:
United Kingdom
By Oxbridge Law Team
Held

  • Defendant was director of a subsidiary of a parent company which was subject to a takeover bid.

  • Subsidiary company incurred liability to pay accountants’ fees in respect of the transaction (£20,000); actual cost of takeover itself was £2.5 million.

  • Defendant, as director of company alleged to have given financial assistance, was sued.

Held

  • Paying of accountants’ fees was financial assistance

  • This because it smoothed the path to the acquisition of shares

    • I.e. reduced the transaction cost for purchaser

    • Thus acted as a financial incentive to buy parent company’s shares

  • This even though cost of accountant’s fees were dwarfed by cost of takeover!

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