Acatos and Hutcheson Plc v Watson
| Jurisdiction | England & Wales |
| Judgment Date | 13 December 1994 |
| Date | 13 December 1994 |
| Court | Chancery Division |
Chancery Division
Before Mr Justice Lightman
Company - shares - can be bought from sole asset holder
Neither the rule in Trevor v Whitworth ((1887) 12 AC 409) nor section 143 of the Companies Act 1985 precluded the purchase by company A of 100 per cent of the issued share capital of company B notwithstanding that company B's sole asset was a substantial holding of some of the voting share capital of company A.
Mr Justice Lightman so held in a reserved judgment in the Chancery Division when granting to the plaintiff, Acatos and Hutcheson plc, the declarations sought by its originating summons, namely (i) that it had power to acquire the entire issued share capital of Acatos Ltd and (ii) that the prohibition against a company acquiring or dealing in its own shares under the rule inTrevor v Whitworth and section 143 of the 1985 Act did not apply to the acquisition by the plaintiff of the entire issued share capital of Acatos Ltd.
The defendant, Peter George Watson, was the registered holder of shares in the plaintiff but not in Acatos Ltd and had been joined as a representative defendant.
Section 143 of the 1985 Act provides: "Subject to the following provisions, a company limited by shares … shall not acquire its own shares, whether by purchase, subscription or otherwise."
Miss Elizabeth Gloster, QC, for the plaintiff; Mr Terence Mowschenson for the defendant.
MR JUSTICE LIGHTMAN said that the shares in Acatos Ltd were held by Mr Ian Hutcheson and associated trusts, companies and individuals who contemplated in early 1990 making an offer to acquire all the share capital of the plaintiff not already owned by them. Acatos Ltd was the vehicle through which it was intended that any offer for the plaintiff would be made.
On October 4, 1990 Acatos acquired a substantial shareholding in the plaintiff as a result of the exchange by the Hutcheson associates of their shares in the plaintiff for shares in Acatos.
Shortly thereafter, however, Acatos abandoned its intention of making an offer for the plaintiff and since then had performed the function only of providing under a contract to the plaintiff the services of Mr Hutcheson as chairman and chief executive of the plaintiff, together with his support staff. The company had no other material trading activities, assets or liabilities.
The shareholding of Acatos Ltd had, however, restricted the ability of the Hutcheson associates to...
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Decision Nº ACQ 459 2010. Upper Tribunal (Lands Chamber), 03-05-2012
...223 Wharvesto v Cheshire CC [1983] RVR 232 Solartrack Plc v London Development Agency [2009] UKUT 242 Acatos & Hutchinson Plc v Watson [1995] BCC 446 Littlewoods Mail Order Stores v McGregor [1969] 1 WLR 1241 Yukong Line Ltd v Rendsburg Investments Corporation (no.2) [1998] 1 WLR 294 Hussey......