$620,000 at stake in estate battle

Press, 28 December 1977, Page 20

$620,000 at stake in estate battle

PA Auckland The Sir John Logan Campbel) estate plans to give financial backing to legal proceedings against one of its four trustees. Sir Kenneth Myers, and his son, Mr Arthur Myers. At stake is at least $620,667. The trust’s chairman (Mr Brian Stevenson) confirmed that he and the other two trustees. Dr Lindo Ferguson and Mr Robert King, had resolved earlier this month to take the action. Sir Kenneth was not at the meeting. In 1972, the trust sold one of its main assets. 209.889 shares in Campbell and Ehrenfried Company. Ltd. of Mr A. D. Myers who. through his company. Paddington Holdings, was making j successful take-over bid for the company Str Kenneth and his son were both directors of Campbell and Ehrenfried. The other director. Mr Geoffrey Myers, who opposed the take-over price as

too low. was removed from the board before the takeover. Sir Kenneth was also a trustee of the Sir John Logan Campbell estate. After complaints from a ] group of shareholders —< members of the Coleman family — the Court of Appeal ruled last August that the $4.80 paid for each share during the take-over was $2.20 too low. The Court' also ruled that interest l amounting to 80 cents a share be paid. Mr Justice Cooke said] that "father and son were: working in close alliance in ‘ the whole matter.” He said they knew, or; ought to have known, that the price of $4.80 a share ] was not a fair one and should not have recommended it to shareholders. Since the decision, two family trusts which sold shares during the take-over have issued writs seeking to have the sale of the shares rescinded.

Sir Kenneth and his son ] are appealing to the Privy] Council against the Court of' Appeal’s judgment. The orig-] inal plaintiffs are defending• the judgment and have also i cross-appealed to the Privy ] i Council apparently to gain ] better terms of com- I pensation than those offered! by the Appeal Court. If the Privy Council con-] firms the Court of Appeal! ‘judgment, it will open the] I door for similar claims by other former Campbell and! Ehrenfried shareholders. The Logan- Campbell estate. which held 17.83 per cent of the total .shareholding at the time of the take-over, is one of! these. ? The biggest obstacle fac-l ing the former shareholders! is that of cost. Total legal! costs for all parties, in-] chiding the Privy Council hearing. could exceed, $500,000. The Logan Campbell trust! stands to gain at least! $620,667 if the Privy Council

| confirms the Appeal Court decision. It has now decided ] to instruct solicitors to ] apply to the Supreme Court I for permission to assist the Coleman- family financially I I in their Privy Council action. j I, The legal tussle, seen at ] first as a mere family ! squabble — more than 50 ] per cent of shares were held j ] by descendants and relatives] |of the Campbell and Ehrenf-: ] ried brewery empire — is I now viewed in legal circles! las a landmark case. The Appeal Court ruling establishes ethical standards and duties for directors inprivate companies during: “insider dealings” and bases! them on equity rather than I ‘precedent. ] Commonwealth law jour-j nals and lawyers are follow-! iing the case closely. I Sir Kenneth Myers, who is i :70, recently relinquished his! position- on the board of ■1.C.1. (N.Z.) Ltd. He is a director of New Zealand I Breweries and has been chairman of South British Insurance since 1946. He!

t;was knighted recently. 1] The Sir John Logan Campi ] bell estate has assets ol : ] about $1.25M and makes anHnual donations to Auckland ’ I medical and educational pro- . j jects.