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    LML4806 Semester 2 Assignment 2 - 2024

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    Michelle

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    LML4806 Semester 2 Assignment 2 - 2024

    Uploaded by

    Michelle
    191 views5 pages

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    Copyright:

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    191 views5 pages

    LML4806 Semester 2 Assignment 2 - 2024

    Uploaded by

    Michelle

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    LML4806 Semester 2 Assignment 2 - 2024

    Company Law

    LML4806

    Semester 2 Assignment 2 - 2024

    Mercantile Law Department


    CONTENTS

    Page

    1 GENERAL INSTRUCTIONS .......................................................................................................... 3


    2 ASSIGNMENT 02 ........................................................................................................................... 3
    Question: 1 ................................................................................................................................................. 3
    Question: 2 ................................................................................................................................................. 4

    2
    1 GENERAL INSTRUCTIONS
    • Assignments test your understanding of the learning material and your ability to apply what
    you have learnt. Two written assignments are set for this module i.e., Assignment 01
    and Assignment 02. Answering these questions gives you practice in answering the type
    of questions that you may expect in the examination.
    • The marks you obtain for Assignment 01 and Assignment 02 make up your year mark.
    • You should answer all questions under each assignment. Your answer to each assignment
    should generally not exceed two and a half pages if it is typed (excluding the bibliography).
    • You may reference your sources as you wish (e.g., in-text or in the footnotes) but it is
    preferable that you reference your sources within the text of your answers. It is not
    mandatory to include a bibliography. You may include a bibliography at the end of your
    assignment voluntarily. However, you should remember to include your Honesty
    Declaration Form.
    • Refer to Paragraph 9 of your Tutorial Letter 101 for the general information about
    assessment.
    • Also refer to Paragraph 10 of your Tutorial Letter 101 for important information regarding
    academic dishonesty (plagiarism and cheating).
    • You should study and refer to the prescribed study material (textbook, Companies Act 71
    of 2008, and tutorial letters, prescribed cases, information that is provided on the module
    site under “Additional resources” etc) when answering your assignments. You should not
    use Artificial Intelligence Software (e.g., ChatGPT) to give you answers to the assignment
    questions as this will prevent you from achieving the learning objectives as well as attaining
    all the skills and values needed in legal practice. Artificial Intelligence Software can give
    you inaccurate answers that are not aligned to the prescribed study material. The
    University can easily identify the answers obtained from Artificial Intelligence Software
    as well as answers copied from internet sources, and the markers will award a zero
    mark for such answers. Furthermore, students who engage in academic dishonesty may
    be referred to a disciplinary hearing.

    2 ASSIGNMENT 02

    Question: 1

    Barbara is a business rescue practitioner of Thirsty Elephants (Pty) Ltd, a company that is under
    business rescue. She convenes a meeting of the creditors of Thirsty Elephants (Pty) Ltd to
    discuss and vote on the business rescue plan. The business rescue plan contains ample
    provisions that protect the interests of the secured creditors of Thirsty Elephants (Pty) Ltd.
    Winelands Packers (Pty) Ltd, a secured creditor of Thirsty Elephants (Pty) Ltd holding 27% of the
    creditors’ voting interests that are voted at the meeting, votes against the adoption of the business
    rescue plan. All the other secured and unsecured creditors in attendance at the meeting vote for
    the adoption of the business rescue plan as the plan presents certain advantages to them.
    Barbara is concerned that Winelands Packers (Pty) Ltd’s vote against the adoption of the

    3
    business rescue plan is detrimental to the successful rescue of Thirsty Elephants (Pty) Ltd, the
    interests of its employees and the interests of the other affected creditors.

    With reference to the Companies Act 71 of 2008 and the relevant case law, advise Barbara on
    whether she may successfully apply to a court to set aside the vote of Winelands Packers (Pty)
    Ltd. In your advice, you should discuss the grounds on which such an application may be made,
    the factors that the court should take into account when considering such an application and the
    effect of a court setting aside Winelands Packers (Pty) Ltd’s vote. (10)

    Question: 2

    Catalyst Holdings Ltd is a company that invests in property, insurance and banking businesses.
    According to its consolidated financial statements, its business undertaking consists solely of its
    shareholdings in three companies, as follows:

    • It holds 70% of the ordinary shares in Tyrex Properties Ltd, the fair value of which is R5.5
    billion Rand.
    • It holds 100% of the ordinary shares in RIS Insurance Ltd, the fair value of which is R500
    million.
    • It holds 25% of the ordinary shares in ATM Bank Ltd, the fair value of which is R2 billion.

    The board of directors of Tyrex Properties Ltd makes an announcement that Tyrex Properties Ltd
    will sell all its business operations and assets to a third party for a cash consideration of R6 billion
    (“the proposed transaction”). Tyrex Properties Ltd gives notice to its shareholders of a general
    meeting to be held on 15 November 2024, at which a resolution will be put to the shareholders of
    Tyrex Properties Ltd to consider and approve the proposed transaction.

    Robyn, who holds 3% of the shares in Catalyst Holdings Ltd, is dissatisfied with the proposed
    transaction. He is of the view that the offered cash consideration of R6 billion is significantly lower
    than the market value of Tyrex Properties Ltd’s business operations and assets. He is concerned
    that even though he is not a shareholder of Tyrex Properties Ltd, the proposed transaction will
    have a significant negative impact on the value of the shares that he holds in Catalyst Holdings
    Ltd.

    With reference to the Companies Act 71 of 2008, case law and the facts provided:

    4
    2.1 Identify the type of transaction that is proposed in the scenario above. (2)

    2.2 Explain whether Catalyst Holdings Ltd and Tyrex Properties Ltd are related. (2)

    2.3 Advise Robyn on whether he would be entitled to vote in regard to the proposed transaction
    or to seek the appraisal remedy in the event that the board of directors of Tyrex Properties
    Ltd proceeds to implement the proposed transaction. (6)

    TOTAL FOR ASSIGNMENT 02: [20]

    __________The End__________

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