An indemnity granted by a company to a director was not within the scope of a substantial property transaction. The High Court so held.
Such a transaction is one involving a non-cash asset which is worth at least either:
- £100,000 or
- £5,000 AND 10% of the company's asset value.
Such a transaction requires prior approval from shareholders under Companies Act 2006 s190.
A director and related persons sold shares in a company. Before exchange, the company granted an indemnity to the sellers in respect of tax and some other possible liabilities.
The High Court held that this was outside the scope as an indemnity was not a non-cash asset, not was it property.
The case report can be downloaded from here.
Terry v Watchstone Ltd  EWHC 3082 (Comm) [19.09]