Background Story from website
Kingsland Estates Ltd. (KEL) was a private, family-owned company comprising over 1,000 acres of prime real estate on or near to the ABC Highway and on the South Coast.
- A takeover bid by a company called SBG Development Corporation in the late 80’s to early 90’s failed.
- Other bids were made but did not go very far because, for one thing, KEL had not produced audited financial statements subsequent to the failed SBG bid. 1993 was the last time audited financial statements were produced by Coopers & Lybrand now PriceWaterhouseCoopers, until 2005.
- In 1997 a company called Classic Investments Ltd. put forward a conditional proposal which was subject to a debt capping. All of the shareholders except one accepted this proposal and signed contracts with Classic to sell their shares. Simplified, this offer was BDS$857,100 to each of the 7 shareholders, subject to debt-capping of BDS$11 million, and warranties that Mrs. Knox (one shareholder) could not make without a better knowledge of the financial state of the company.
Mrs. Knox wanted to buy all of the other shares instead, but was required to pay cash with no conditions and no capping of the debt. Her requests for even basic financial information were refused. The reason given was that the company could not afford to provide this information, i.e. was “impecunious“.
The offer from Classic entailed signing warranties which could not possibly be evaluated without the unavailable information. Mrs. Knox could not in good conscience sign the warranties.
Forced to choose between selling her shares to an unknown entity for a price and terms which could not be substantiated by any financial information, and striving for her preemptive rights under the articles of the company, Mrs. Knox chose to fight to keep her legacy.
To date Mrs. Knox has lost in the courts of Barbados and before the Privy Council in London. The shareholders of KEL “won” the right to sell their assets to an outside company for a fraction of what they were worth. The legal interpretation of the company’s articles was a surprise to many who were actually acquainted with the writers of the articles.