Comments on: Investment scheme collapses give rise to equitable and restitutionary claims

By: skepticlawyer » Judges can “Google” too

skepticlawyer » Judges can “Google” too — Tue, 23 Mar 2010 08:01:26 +0000

[...] we’ve met before on this blog, most recently here and also as the judge in the Madoff case here). Judge Chin was convinced that it was likely Bari committed the robbery for a number of [...]

By: skepticlawyer » Defending the indefensible

skepticlawyer » Defending the indefensible — Wed, 11 Mar 2009 12:23:04 +0000

[...] thought for Bernie Madoff’s defence lawyer, Ira Sorkin. I’ve written on Madoff’s failed Ponzi investment scheme, noting the restitutionary and equitable claims which may arise from [...]

By: Legal Eagle

Legal Eagle — Thu, 29 Jan 2009 04:09:53 +0000

Nudd, I’m an Australian, therefore taking the David Securities line which requires an unjust factor.

jc, I don’t think oppression by directors would cut the mustard – it has to be an oppression by majority shareholders. But there may be certain directors’ duties the directors have breached – I shall have to refresh my memory about them.

By: jc

jc — Thu, 29 Jan 2009 01:59:00 +0000

No, the directors are nowhere near the majority shareholders. However I see the oppression stemming from the board abusing the real intention of the bylaw to pay the responsible entity the fee.

So they used their position to oppress the unit holders.

My take is that a judge would really look down on the payment of an out performance when the fund’s results have been miserable and they used a legalistic interpretation of the by-law to get it through.

By: nudd

nudd — Thu, 29 Jan 2009 01:26:52 +0000

I thought in the UK, the Lipkin-Gorman-type money had and received claim would be more like a tracing claim and does not appear to require an unjust factor. So long as you can trace the money into its product, you are home free subject to the defence of change of position.

By: Legal Eagle

Legal Eagle — Wed, 28 Jan 2009 22:48:29 +0000

jc, yes, there is a doctrine designed to prevent oppression of minority shareholders by majority shareholders (eg, by forcing a buyout which isn’t fair value). Are the directors majority shareholders?

By: jc

jc — Wed, 28 Jan 2009 04:13:14 +0000

Could this have a legit challenge in court? I’m of the impression that there is such a thing as shareholder oppression and that the clause was never intended to be abused in such a way.

By: pedro

pedro — Wed, 28 Jan 2009 02:15:15 +0000

Great story from JC, illustrating yet again how compulsory super is the basis for a huge wealth transfer from ordinary people to financial engineers. Thanks Mr Keating.

By: Legal Eagle

Legal Eagle — Wed, 28 Jan 2009 00:47:57 +0000

jc, what a lurk! I can’t believe outperformance fees were paid, when all the fund did was to not lose as badly as the ASX. What were the NEDs thinking? Were they thinking at all? It is perfectly legal, but it’s pretty poor behaviour by the fund.

By: skepticlawyer

skepticlawyer — Tue, 27 Jan 2009 14:01:44 +0000

Sorry jc, had to fish you out of the spammer. It’s been a mite tetchy lately.