Description
lease write an answer to the following problem question. The word limit for the assessed piece of work is 2,000 words. This piece of assessed work is weighted as 100% of your mark for the Equity and Trusts 1 module. Your answer must be word processed and must be double spaced.
Mimi, along with her sister Bibi, are beneficiaries under a trust set up by their mother. The trust property consisted of 50,000 shares in an arms company called Weapons and a seventy percent shareholding in Plastics, a plastics company. The trust is managed by two trustees, Ted and Tod, who because of the seventy percent shareholding in the company sit on the Board of Directors of Plastics.
The following issues have been brought to your attention:
a) That Bibi, a pacifist, objected to the investment of the family money in a weapons company. Because of these objections, Ted and Tod sold the shares in Weapons one year ago. They then used the money raised by the sale to buy a majority shareholding in a petrol company, Petrol Is Us. However, because of the rising popularity of electric cars, Petrol Is Us has not made a profit and fears it may have to close down. The shares are worth only half of what Ted and Tod paid for them. Ted and Tod have never attended any Board meetings for the petrol company. The shares in Weapons are now worth double what Ted and Tod sold them for.
b) That at a Board meeting of Plastics, the Board heard a presentation and investment talk from a new company called Bio-Plas and was asked to consider investing in their new type of bio-degradable plastic which would bring an end to all plastic waste. Three members of the Board, including Ted and Tod, were in favour of this, but the majority of the Board voted against. After the Board meeting, Ted and Tod met with the owner of Bio-Plas and it was agreed that Ted and Tod would invest some of their own money in the new company. They each invested £5,000. After one year, Ted and Tod have received dividends of £10,000 each.
c) That Tod has used the £10,000 dividend to buy a painting which was subsequently sold onto Pablo for £15,000. The painting has recently been valued at £20,000.
d) That last month Bibi filled out a share transfer form in relation to her shares in Plastics, in favour of her niece Nelly, and handed the form and the share certificates to Ted. Ted advised Bibi that they would inform Nelly of the gift and that there was nothing more that Bibi needed to do. Bibi has died and Nelly is claiming ownership of the shares, but Ted has not passed the paperwork on to the company.
e) That Ted and Tod will not allow Mimi to access money from her trust fund. One of the provisions in the trust says:
‘I leave £50,000 to my trustees who may distribute this money between my children to support any business ideas they may have’.
Mimi has approached Ted and Tod on a number of occasions asking for £10,000 to start a meat pie making business. Ted and Tod are both vegetarians and refuse to give Mimi the money.
Advise Mimi, the remaining beneficiary, as to the trust issues that arise in relation to all of the factual scenarios described above. Please ensure that you illustrate your answer by reference to the relevant case law and statute law.