Scottish Co-operative Wholesale Society Ltd v Meyer

Facts

The Society held a majority in a subsidiary formed to make rayon. It later moved the business to its own department and starved the subsidiary, whose nominee directors did nothing.

Issue

Were the affairs of the subsidiary conducted in a manner oppressive to the minority?

Held

Yes. The Society was ordered to buy the minority's shares at their value before the oppression.

Principle

A majority that runs down a company to the prejudice of the minority acts oppressively, and the court may order a buy-out.

Why it matters

It is persuasive on sections 265 to 267.

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