The fact that prices of newly-issued shares of private companies have really no established and strict principles for valuation is illustrated by the case of Re Bird Precision Bellows Ltd  Ch 658, where the court declared that it even it enjoys wide discretion in determining valuation to serve the ends of justice and fairness. This is a principle likewise applied in the case of Scottish Cooperative Wholesale Society Ltd v Meyer  AC 324, where the court held that it possesses a broad discretion to determine what constitutes fair price in the valuation of shares.
In the case of Re Cumana Ltd  BCLC 430, indicate that even the notion of fairness with respect to company matters, including share prices, is a complicated issue and highly tenuous. Fairness is dependent on the circumstances, according to the case, and since circumstances do change then it follows that even the notion of fairness is unfixed. In this case, a majority shareholder, who anticipated a major company move, created circumstances that would result in the depreciation of the prices of the company shares.
The court held that in the interest of justice, the shares should be valued at a date before the majority shareholder took the step to deliberately devalue the prices of shares. These cases are but just two indications that although private companies have the option to choose any valuation model that would most benefit them, and that therefore, there really are no fixed rules for determining the prices of company shares as far as they are concerned, they are nevertheless, limited by the general rules of what is fair and equitable.
Aye Bank plc’ s floating charge ranks above Crown debts and taxes such as PAYE or VAT. This is because under the Enterprise Act 2002, the preferential status of Crown taxes and debts were eliminated, amending in effect the provisions of Schedule 6 of the Insolvency Act 1986.
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