House of Fraser plc v ACGE Investments Ltd [1987] AC 387

Court: House of Lords

Facts: The company passed a special resolution to compulsorily buy back preference shares, leading to the preference shareholders losing their right to future dividends. They argued this constituted a variation of class rights.

Issue: Does the compulsory buyback and cancellation of shares amount to a variation of class rights requiring separate class meetings?

Held: There was no variation of class rights as the shares were simply extinguished.

Key Judicial Statement: Lord Keith observed, "Upon no view of the matter can it be said that as a result any of the special rights attached to the shares has been ‘modified, commuted, affected or dealt with’ within the meaning of article 12."

💡 Leveluplaw: Extinguishing shares through buyback does not constitute a variation of class rights, as the rights associated with those shares are fully removed.