Randgold Resources v Companies (Jersey) Law, 1991 [2004] JRC 070 (27 April 2004)

Randgold Resources v Companies (Jersey) Law, 1991 [2004] JRC 070 (27 April 2004)

The court held that the reduction of share capital was justified as the losses were permanent, no capital was being returned to shareholders, there was no diminution of liability, and creditors were not prejudiced. The application met the statutory requirements and was approved.

Citation
[2004] JRC 070
Parties
Applicant: Randgold Resources Limited
Jurisdiction
Jersey
Judgment Date
27 April 2004
Procedural Posture
Representation to Reduce Share Capital / Judgment on Application
Outcome
application granted
Legal Topics
Reduction of Share Capital, Accumulated Losses, Share Premium Account, Creditor Protection
Company Law Reduction of Share Capital Accumulated Losses Share Premium Account Creditor Protection

Case Brief

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Parties

Randgold Resources Limited

Applicant

Procedural Posture

Representation to Reduce Share Capital / Judgment on Application

Legal Issues

  1. 1 Whether the company may reduce its share capital under Article 61(2)(b) of the Companies (Jersey) Law, 1991
  2. 2 Whether the loss of capital is permanent and justifies reduction
  3. 3 Whether creditors are prejudiced by the proposed reduction

Ratio Decidendi

The court held that the reduction of share capital was justified as the losses were permanent, no capital was being returned to shareholders, there was no diminution of liability, and creditors were not prejudiced. The application met the statutory requirements and was approved.

Court Disposition

application granted

Orders

  • Reduction of share premium account by US$100 million approved.
  • Cancellation of accumulated losses of US$75 million approved.