Re Torvale Group [1999] All ER (D) 944

• Company took a loan from group called ‘3i’, whilst also issuing preferred ordinary shares to group.

• Later on, company issued debentures; however as company articles, issue of debentures required consent of ordinary preferred shareholders.

• When company went insolvent, was suggested that as 3i had not consented via written resolution to issue of debentures, issue was invalid.

Held

• Duomatic principle is not limited to situations in which the consent of all the shareholders in a company is given.

• Rather can apply equally where consent of a particular group of shareholders is given.

• Here, 3i had given informal consent to issue of debentures

  • Thus as it was sole holder of preferred ordinary shares, issue of debentures was valid