GoSeigen wrote:Wizard wrote:
In which case why did you single the point out from a previous posters comment? Indeed you offered to back up your assertions, which is what I asked for and which you now will not do.GoSeigen wrote:...I've now had a thorough look at LLPC/D prospectuses and agree with your nervousness. Unfortunately I think the wording "on a return of capital [...] whether or not on a winding up (but other than redemption and purchase[...])" can only be referring to reduction of capital. It's unfortunate that the word "return" is used rather than "reduction", I agree. This seems to be a "manifest error" though, something we are familiar with!! I have noticed other "manifest errors" in the same terms; clearly they were drafted in a hurry in the crazy days of late 2008 and there was quite a bit of copying and pasting involved. If it were to come to a fight, I think a "return of capital" vs "reduction of capital" battle would be difficult for holders to win. Perhaps a good lawyer could find something else to exploit...
All IMO of course but happy to back any of it up with quotes etc.
My bold.
While you are providing the promised back up on the "manifest error" statement can you also provide the basis for your conclusion that holders would find it difficult to win a "return of capital" vs "reduction of capital"battle. Relevant case law precedents would be fine.
Terry.
Let's go right back to my original post which you've accurately quoted above.
My point was that I believe return of capital was a reference to reduction of capital in the context. This seems obvious to me as I can find no alternative explanation. Your suggestion that return of capital referred to winding up only doesn't fly because of the wording right there saying "whether or not on a winding up".
The "manifest error" thing was a joke, okay? [Used double !!, too subtle perhaps a smiley was needed?] Paul and I were both at the High Court when those words were uttered in the Lloyds case; I think he understood my tongue-in-cheek reference even if no-one else did. Hate to have to explain it but I suggested the wording "return of capital" might be an angle of attack for holders then jokingly!! suggested Lloyds might plead manifest error. That doesn't mean I myself think it is a manifest error just that Lloyds might successfully argue it as such. And my backing for that was other manifest errors nearby in the same document. For which I could supply quotes.
You want quotes defending the manifest error thing: here's another "manifest error" from the LLPC prospectus:
Upon such substitution, the Preference Shares shall be exchanged for, or redeemed by, the relevant Qualifying Non-Innovative Tier 1 Securities or the proceeds of redemption of the Preference Shares shall be mandatorily applied to the subscription or purchase of the Qualifying Non-Innovative Tier 1 Securities so issued.
Now LLPC are irredeemable so plainly redemption is inapplicable here. However IMO it was included because the same clause is copied and pasted verbatim for each of the prefs described in the document whether redeemable or not. If someone were to query the presence of the word "redeem" in this clause in court I believe the judge would say the word obviously arrived there by mistake as part of the copy and past operation and did NOT imply that LLPC have redemption terms.
I probably spotted other errors but that was almost ten days ago. If you'd asked there and then I may have humoured you but I frankly can't be bothered now. It's pretty easy for you to do yourself if it matters that much.
GS
Sorry GS, but the original post was not your's but was from Paul which said...
hiriskpaul wrote:Been through all the Articles and Acts, which is why I am nervous! The Lloyds prefs are interesting as the prospectus describes the rights on return of capital (£1 per share + unpaid dividends + accrued) only under the heading "Rights on Liquidation", implying that this is the only route available to reduce preference share capital, other than the usual market purchase or special resolution to change the terms. i.e. there is no "Rights on Reduction of Capital" or any similar catch-all section. No doubt Lloyds would argue this was an obvious infelicity .
My bold.
As this is under a section entitled "Rights on Liquidation" surely the "manifest error" is the use of the phrase "whether or not on a winding up", unless you can explain how a company is liquidated but not wound up. Now in many of the legal documents I have been involved with in my work life there is a clause to say section headings are not part of the document, but I have had a quick look at the prospectus and can't see such an exclusion, so unless I have missed it the headings are relevant.
Terry.