5/11/2011 Gluckstein v Barnes [1900]AC 240 (House of Lords) Syndicate bought an exhibition hall at a discount of 140K. Promote a company:Olympia Ltd.without independent directors Sold land to Olympia at 180K. Disclosed profit of 40K and "interim investments"in the prospectus. Undisclosed profit of 20K made on buying mortgages on the property. Olympia liquidated 4 years later and liquidator claims 6,341, part of 20K received by Gluckstein. Secret profit of 20K payable to Olympia. 13 Gluckstein v Barnes [1900]AC 240 (House of Lords) What were Gluckstein's 4 arguments? ·What's the ruling? Lord Macnaghten:refund the whole of the money penal interest 145/11/2011 7 13 Gluckstein v Barnes [1900] AC 240 (House of Lords) • Syndicate bought an exhibition hall at a discount of 140K. • Promote a company: Olympia Ltd. without independent directors • Sold land to Olympia at 180K. • Disclosed profit of 40K and “interim investments” in the prospectus. • Undisclosed profit of 20K made on buying mortgages on the property. • Olympia liquidated 4 years later and liquidator claims 6,341, part of 20K received by Gluckstein. • Secret profit of 20K payable to Olympia. 14 Gluckstein v Barnes [1900] AC 240 (House of Lords) • What were Gluckstein’s 4 arguments? • What’s the ruling? • Lord Macnaghten: refund the whole of the money + penal interest