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Problem:
Messrs. Forrest, Moss and Pine jointly purchased a piece of land located in Calgary for $1,000,000.00 with a view to erecting a large apartment building. They then incorporated Forest Park Apartments Ltd. and appointed themselves its directors. Forrest was a member of a small investment club composed of 15 wealthy Calgarians; he told his fellow members about the projected building and persuaded them collectively to invest $7,000,000.00 in common shares of Forest Park Apartments Ltd. (70,000 shares issued at $100.00 each). Shortly afterwards, a meeting of directors passed a resolution to buy the land from Forrest, Moss and Pine by allotting them 20,000 shares in the corporation. Several weeks after the transaction was completed, Foley, who as an investment club member had purchased 5,000 shares, learned the details and complained to the directors. They stated that in their opinion the land was worth at least $2.5 million and that the corporation had obtained it at a bargain price. Foley was still dissatisfied and threatened to start an action against them. What would be the substance of her complaint, and what remedies would she request? Would she succeed?
Additional Require:
The question belongs to Law and it discusses require a case where a shareholder seeks legal action against management of a company which had bought land from the directors of company.
Total Word Count 257
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