Elroy Was the Controlling Shareholder and Sole Director of Maxi-Screen

question 18

Multiple Choice

Elroy was the controlling shareholder and sole director of Maxi-Screen Ltd,which carries on a film production business.His wife,Ann,is a minority shareholder.The corporation was incorporated in 1995 and has paid a substantial dividend each year to its shareholders.In 2009,Ann and Elroy separated.Elroy did not declare a dividend even though the business was more profitable than ever because he did not want to share the profits with Ann.Which of the following statements best reflects Ann's legal position?

• A)She has no remedy because the declaration of dividends is a matter within the discretion of the directors.
• B)She has no remedy because Elroy is the controlling shareholder and can do what he wants.
• C)She could seek relief in court on the basis that Elroy and the corporation have defeated her reasonable expectations as a shareholder and thereby oppressed her or unfairly disregarded or prejudiced her interests as a shareholder.
• D)The only way she could seek relief is to apply to the court for permission to bring a derivative action against Elroy on behalf of the corporation for breaching his fiduciary duty.
• E)She has no remedy because the failure to pay dividends is not an action that she can dissent from.

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Definitions:

Physical Aggression

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Investment Model

A model of long-term relationships that examines the ways that commitment, investment, and the availability of attractive alternative partners predict satisfaction and stability in relationships.

Evolutionary Theory

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Social Exchange Theory

The view of social relationships as involving an exchange of goods, the objective of which is to minimize costs and maximize benefits.