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Allowing Directors to act in the interests of Creditors is a real stupid situation if such were allowed because what would happen is what Hope has been trying to do and such an act would cause irreparable damage to the shareholders as Hope is trying to do to us now. Kawaley imho was incompetent and did well to later reverse himself . Going to another court to appeal his error would have cost money and taken up time. Such carelessness is just annoying given what would have happened had this company's board not decided to go to Cali for further resolution. This is a case that has actually enlightened me and a few others in a big way for which I am grateful the price of which is my investment in FRR. I do hope we win this case and hope Hope gets fined the max amount possible. He must have been raised in the Trump and JR Ewing stables due to the creative wickedness he has exhibited throughout all this nonsense.
Freeatlast, looks like that argument won't hold because the law of California says '' No director should be seen as protecting the interest of a creditor until/unless the company is insolvent''. As a director the interest of the company supersedes his . The Californian law nails him in that area as it seems to be saying that as long as you are a director it is the interests of the company you should be looking out for. Stopping the company from taking loans in order to progress the growth of the company can't be in the interests of the company. The company is allowed loans of up to $200m he didn't even allow them to get anywhere near that. That power of veto it appears is what would finally nail him as he basically misused it coupled with what the law of California says regarding what a director can't do for a creditor. he basically owes no fiduciary duty to the creditors of which he is one.
He said his "business judgement'' led him to disallow it.
Jester, what if it so happens that one party in a contract did everything possible to ensure that the other party couldn't carry out their own part of the deal?
Very well thought of piece by SB. Hope basically by his actions never gave the company a chance to grow. His conflict of interest here ha done the company no good. If you are a director of company the fiduciary duties you are entrusted with must be well carried out. You are like the father of a kid and as things go fathers don't look for all ways of killing their kids. Hope basically looked for all ways of killing FRR. The MND story should blow the mind of the jury no end and other sorts of stunts he pulled.
Let's see how the case goes, I see a lot of injustice in the whole thing which I expect the jury to deal with effectively. A director's duty is towards the company and its growth and progress. Nothing probably wrong with the veto power in that in the right hands it would only be used to disallow frivolous loans and not ones that should help the company progress .Hope abused that power and that should be easy to prove.
I agree with you. But then he was trying to grab the assets without a court order. Two wrongs definitely do not make a right , the whole situation is really confusing. There are lawyers on both sides , I doubt one would be advising their client to break the law. FRR are probably working on the premise that they would leave enough assets in one of the companies for him to clear the debt owed him, but how that would play out is what I don't understand.
I suspect that once the case started , Hope could be viewed as being suspended. Being suspended means he can't actually vote on or veto anything(probably a wrong assertion). He tried to stop a loan during the Caymans case but Kawaley overruled him on that saying he had no right to do that. Were he still within his rights he could have vetoed those loans without Kawaley being able to stop him. I could be wrong SteveV .
Madpunter, the news is that Hope is basically trying to liquidate every single company in the group. If he really could get this done how would we be able to continue producing since he would ,by so doing be able to grab the one containing the asset?
Thanks Johnny.
In the absence of new information, what transpired at the Caymans should enable us to have a good idea of where this is heading. Hope had it good initially until Kawaley started seeing through his web of deceit . Although he didn't reverse himself based on his earlier judgement , he however did mention that FRR had a good chance of winning on appeal . FRR then seized on this and applied to terminate the case which the judge did( ''without prejudice'' : Don't know what this means legally but must add that some folks said it was to FRR's advantage. Hope's counsel I read some where tried to make FRR say that it's with prejudice , but they refused.) if we need to really understand what is going on, we need to refer to this state of affairs and ease off the daily pummelling some folks are visiting on ZA &SN for the time being. End of my early week rant for this week folks.
Frr probably don't have the finance in place to pay him off yet. The delisting allegedly caused by Hope's actions could lead to so much costs in damages that FRR would be able to deduct his costs from it and pay him his loan back if found guilty.
The fact that on some occasions he did mentioned being conflicted is imho gonna be a problem for him. If you are wearing the FRR cap, then you do FRR's business in an appropriate manner any other move contrary to that as a director could be problematic, a veto power does not mean doing things against the company. His greed made him accept the position without thinking it through.
The problem for Hope is that, if the fiduciary duties of a director are properly understood by folks who have to assist in judging this case then there is a great deal of hope for FRR. Zaza offering a loan and his comment of it affecting his personal interest does not augur well for the company and his directorship's fiduciary duties' compliance. Anyone saying Zaza shouldn't have asked for the loan to be given a seniority higher than Hope's is wrong can't be right.
The issue here is that the company needs finance , someone agrees to loan the company the finance and someone who is a director is particular about his personal intertest is a shocker. Somehow both directors appear to be considering their personal interests here but as the company is in dire need of finance Hope's action could be seen as a more material breach whose actions could easily have killed the company. Were he a non director with the attendant Fiduciary duties attached to such a role then he would be within his rights to say to Zaza what he said.
Chances are that Kawaley finally turning around is due to a full review of Hope's actions when he was able to fully digest them.
Knows how to Operate within the law? In court before kawaley for blocking finance and does the same while case was still ongoing?
YA forward sold shares hence the settlement they had to make with FRR. Whose were they dealing shares for? If Hope , then check mate! You don't trade company's shares in which you are a director with information only available to directors! Had he gotten his 500m shares that would have helped Hope further in this game.
Same reason that after he got accused of deliberately hindering finance , he tried to block further financing during the court case that Kawaley later let him know that he shouldn't be doing.
Garytrader, where did Hope resign from then?
Garytrader, this happens to be a default engineered by Hope because he blocked them from all sources of revenue using the veto power he had. His effort has '' Seize the assets'' written all over it. Remember he became a director of the company and as a result some of those moves ie of blocking finance constituted breaches of fiduciary duties. Had he just been a lender and not try running the company one way or the other then this fiduciary thing wouldn't come in. Did Zaza etc try to pay? Yes. Did anything unfair stop them from paying? Yes. Who caused the unfair circumstance to set in? Hope. Why? Because he wanted the assets of the company and wasn't interested in just recouping his money, just as he did at Madagascar oil. In the Caymans, the judge took all these into consideration and Hope started facing all sorts of downturn in the case once Kawaley had been able to fully analyse the facts.
The shocking thing was that while the case was going on, Hope was discovered to have blocked further attempts to raise funds to which kawaley objected to. Asked why he didn't allow Zaza to raise funds , he put it down to him having a superior judgement. Companies need cash to run, without the cash the company would die , he refused the cash infusement only because he was aiming for one disastrous result ie to seize the assets via a default. End of my little rant.
He couldn't have been suspended as he was still trying to block funding during the case in the Caymans. He probably knew he would be suspended hence his resignation.
Would the lawyers risk putting an illegal transaction document in front of a judge?
If the transfer was illegal, the judge would have said so rather than rely on it to not give a TRO.