The club argued that the directors had not indicated the «nature» of their interest in the agreement by not making public the amount of the fee payable under the administrative agreement. One of the central questions was whether the directors had expressed interest in the so-called management agreement on the association`s steering committee. As a result, according to the association, the management contract «is no longer possible», which means that the association is allowed to reject it and move away from it. In short, the association claimed that the two directors had misappropriated association funds and had pushed them to pay unauthorized administrative costs. Subsequently, the ski school stated that it and the association had entered into a management contract in 2007 under which administrative fees must be paid. The Tribunal found that one of the two directors was not required to disclose his interest, as he had only become a director when the management agreement had been reached. But the other manager had not revealed his interest under the company law and the club`s statutes. As was done, the Tribunal found (for other reasons) that the administrative agreement was not null and for granted. We have also created a «Back to Back Agreement» for lenders and consultants, which can be used as part of this confidentiality agreement for the standard form.
In deciding how many details to be disclosed, the judge found that the required standard of disclosure was «of the exact nature of the director`s interest» and that the directors had to prove that they fulfilled the disclosure obligation «in the letter and mind.» (This follows the Tribunal`s earlier decision in Re Neptune (Vehicle Washing) Ltd  Ch 274. Fairford Water Ski Club Ltd v Cohoon  EWHC 290 (Comm) involved a water ski club. The association took the form of a private company with a share of shares with a board of directors. Although the case law has been found for some time that directors must fully express their interests, it can be difficult in practice to strike a balance between the impotent reurgentness of details and the simple definition of bare bases. This was based on a more general principle that directors, as agents of a company, are required to «provide all the facts essential to the transaction» (Mothew/Bristol and West Building Society  EWCA Civ 533). However, the consequences, if this balance is misdirected, can be considerable. A director who does not declare his interest is responsible for breaches of his obligations. Corrective action against the Director may include disclosure of a realized profit, payment of appropriate compensation, or participation in assets misappropriated on trust assets. In the end, the company may be able to completely terminate the agreement.
In October 2014, the BVCA published a revised version of its leaflet model, the subscription and shareholder pact as well as the statutes, as well as accounting information on the handling of preferred shares (as a loan or equity in the company`s accounts). In September 2015, the statutes were amended to amend the Companies Act 2006 with respect to the legal requirements for companies to buy back derintendants. As a result, it was up to all interested directors to disclose the amount of the administrative fee purportedly owed by the club. Otherwise, they would not have properly explained the nature (or extent) of their interest in the agreement. We would also be pleased to receive comments before our next review in 2019. Disclaimer: neither the BVCA nor a member of its committees or working groups take responsibility for the content of the documents or the consequences of their use and that it is essential to obtain legal advice before the use of the documents. These documents serve only as a starting point and should be adapted to your specific legal and business requirements. None of the documents should be construed as legal advice for certain facts or circumstances.