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unceremoniously dumped!!!

unceremoniously dumped!!!

Postby jantra » Wed Oct 19, 2016 5:25 pm

All

As you can probably tell from my recent posts things haven't been harmonious and today me and my wife were told that we are to no longer act as execs and that we will only be NEDs from hereonin. We were told this in a board meeting of 5 board members, 2 of which have put there name to this and the third said it had nothing to do with him.

what I want to know is can 2 directors remove another 2 directors if the third is in the middle (or says he is)? we have had our email accounts and access to the servers withdrawn with immediate effect.

I have already taken legal advice but wouldn't mind a few thoughts/opinions on how I can fight this as I feel it is a definite 3v2 in the boardroom...there would be little point in acting as NEDs given the relationship...

the company solicitors won't speak to us as they have been told we are no longer employees, however I thought they would talk to us assuming we are directors.

thoughts....
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Re: unceremoniously dumped!!!

Postby atticus » Wed Oct 19, 2016 5:45 pm

Directors are appointed and removed by shareholders. If the directors in question are majority shareholders, then the shareholders will, if need be, ratify the decision.

You may have claims arising out of the termination of employment - whether breach of contract or unfair dismissal,or both.

You need to consult your own solicitors, not the company solicitors. I have previously given you the name of a firm in your town, and can do so again. DM me if you would like a name.
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Re: unceremoniously dumped!!!

Postby jantra » Wed Oct 19, 2016 6:23 pm

thanks Atticus

I will speak with my sols tomorrow. appreciate your help.
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Re: unceremoniously dumped!!!

Postby dls » Thu Oct 20, 2016 9:30 am

Best of luck
David Swarbrick (Admin) dswarb@gmail.com - 0795 457 9992
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Re: unceremoniously dumped!!!

Postby jantra » Sat Oct 22, 2016 7:07 am

a few more questions, as we have both now received our letters from the company and the reason is given as 'irreconcilable differences between board members' and that 'dismissed due to other substantial reason' is given. The letter states were are still directors, but now only non-execs and will not be involved in the day to day running or management. I have sought legal advice and we are meeting with a barrister next week, I just value an alternative opinion so I am a little bit better informed of the legal grounds on which I stand.

1. the letter was from a director of topco, we were employed by a group service company, servco, a wholly owned subsidiary. Can the directors of topco act in this way? I thought topco was a shareholder and thus could not involve itself in the running of the service company, the running of which should be by the directors of servco. Is this the strict legal interpretation with the reality somewhat different i.e. the servco directors are bound to act on the wishes of its only shareholder, topco, who is also bound to act according to the directors of topco (who are not majority shareholders in topco but are likely to control the topco GM).

2. it would appear that the issue of 'trust' is with me, and no reasons were given, so following Wadley v Eager Electrical Ltd, this does not appear to allow spouses to also be dismissed. Is my thinking correct here?

3. would being dismissed as an employee in this way constitute a typical breach of a directors service contract? I know the specific terms of the contract are not known here, but this is very important as it has potential wider issues.

4. we have been involved in the management of the business since December 2013, attending all monthly management meetings with the other 2 directors and forming the business plan. Can it be argued that we have been de facto directors since that time (appointed de jure Oct 22 2015), and thus de facto employees since that time also. Our roles have not changed by the introduction of a written service contract (see next). I think the answer may be no as a directors and employee are two different roles held by the same person.

5. no pay has been received under the terms of the service contract for 5 months, and the service contract says 6 months notice must be given. the service contract was drafted earlier this year so can it be argued that we have not been employees for more than 2 years (see 4) and thus have no protections?

6. board members are supposed to hold independent opinions and then the board vote on matters. If board members have differences of opinion, can that be grounds for removing a director as seems to be the case? In our roles as employees we run our own departments and don't have any day to day involvement with the other directors. the only real contact is in the board room and this is where the potential conflict arises due to differences of opinion.

7. would 42% constitute a minority shareholding in a strict legal sense? The reason I ask is that we know 42% of shareholders are with us (invested due to their belief in us rather than the other 3 directors) but cannot say for certain whether the other 58% are all together. The business operates across several sites which all operate independently of each other. Could the 42% seek to break up the group and take ownership of a few sites, with the remainder taking the rest?

8. is there any strict legal difference between an exec and a non exec? I didn't think there was, both have the same responsibilities and liabilities to the company and its shareholders.

9. The aforementioned letter states that we can only attend company premises when attending board meetings. Is this legal? For example, how could we meet with potential investors on site if we cannot attend the premises?

Thanks
Jan
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Re: unceremoniously dumped!

Postby atticus » Sat Oct 22, 2016 5:21 pm

I suggest that you ask your solicitor to give your barrister notice of those questions.
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Re: unceremoniously dumped!!!

Postby jantra » Sat Oct 22, 2016 5:27 pm

i will do.
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