HC Deb 20 October 1981 vol 10 c218
Mr. Eyre

I beg to move amendment No. 42, in page 50, line 43, leave out from 'are' to end of line 44 and insert 'to be redeemed or are liable to be redeemed at the option of the company or the shareholder'. This amendment makes express provision for a company to issue shares that are redeemable at the option of either the shareholder or the company.

Amendment agreed to.

Mr. Eyre: I beg to move amendment No. 43, in page 51, line 8, leave out 'section 50' and insert

'sections 50 and 55(4)'.
Mr. Deputy Speaker

With this it will be convenient to take Government amendments Nos. 54 to 56.

Mr. Eyre

In the hope that I shall be able to assist the House, I shall endeavour to summarise the effect of the amendments.

The amendments Swill change the remedies that are to be available against the company where the company has failed to purchase or redeem shares. At present clause 55 provides that any general remedy that would normally be available for a breach of contract will be available against the company for failure to purchase or redeem but that in a winding-up the claim of a shareholder in respect of such failure is to be postponed to all other debts and liabilities of the company but is to have priority over the rights of other shareholders in a winding-up. Clause 55 as amended will provide, first, that a company shall not be liable to pay damages in respect of a failure to purchase or redeem but that other remedies are to be available; secondly, that where a shareholder brings an action in court for specific performance of the contract of purchase or terms of redemption no order is to be made if the company shows that it could not pay the price out of distributable profits; and thirdly, that in a winding-up the shareholder may enforce the terms of the contract or the terms for redemption provided that the due date for purchase or redemption was before the date of the commencement of the winding-up.

I believe that that deals with the essence of the amendments.

Amendment agreed to.

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