ABSTRACT
Cumbrian Newspapers Group Ltd v Cumberland and Westmorland Herald Newspaper and Printing Co Ltd (1986) The plaintiff company had, as part of a scheme of amalgamation, acquired 10.67% of the ordinary shares of the defendant company. In order to make it difficult for anyone outside the Cumbrian Newspapers Group Ltd to ever gain control of newspapers owned by the defendant company, the articles of association of the defendant company were altered so that the plaintiff company had three types of special right attaching to any ordinary shares it held in the defendant at any time. These three categories of rights were: (1) rights of pre-emption on the transfer of any other issued ordinary shares in the defendant company; (2) pre-emption rights over any unissued shares in the defendant company; (3) the right to appoint a director of the defendant so long as the plaintiff owned at least 10% of its shares. The question before the court was – if the company wanted to alter those particular articles, did this constitute a variation of class rights even though the ‘class’ was defined by reference to any ordinary shares held by one person?
