Re Saltdean Estate Co. Ltd (1968) 1 WLR 1844

Court: High Court

Facts: The preference shareholders’ shares were paid off at par through a reduction of capital. They claimed that this required a separate class meeting to approve the pay-off.

Issue: Is a reduction of capital that pays off preference shares considered a variation of class rights requiring a separate class meeting?

Held: No separate class meeting was required.

Key Judicial Statement: Buckley J stated, "The liability to prior repayment on a reduction of capital, corresponding to their right to prior return of capital in a winding-up … is part of the bargain between the shareholders and forms an integral part of the definition or delimitation of the bundle of rights which make up a preference share."

💡 Leveluplaw: Paying off preference shares through capital reduction does not constitute a variation of class rights that would require a separate class meeting.