PSY3051 Study Guide - Final Guide: Prudential Plc, Reflective Loss
24 Jul 2018
School
Department
Course
Professor
Document Summary
Shareholder can not recover for loss that is reflective of the company"s loss. But if you have lost value in your shares it is the same as saying that the company has lost value in its assets. Where the loss arose specifically from a wrong done to the shareholder, the reflective loss principle won"t apply. Grew potatoes on land, mortgage over the land that they leased. Failed to issue a caveat over the land, company fails to pay, mortgagee takes possession and harvests the potatoes, company collapses. Advising improperly from the lawyer etc was the cause of the loss, Prudential assurance co: a listed public company, shares held by many people, alleged fraud by a minority shareholder against directors. When you enter a limited corporation you get the protection of limited liability, but when you acquire a share you accept that the value of investment follows the fortunes of the company.
