5/18/2011 Meaning of financial assistance Belmont Finance Corp Ltd.v Williams Furniture Ltd.[1979]Ch 250(Court of Appeal) Any transaction for the purpose of financing the acquisition may involve provision of financial assistance. Hoffmann J in Charterhouse:"the Belmont case indicates that the sale of an asset by the company at a fair value can properly be described as giving financial assistance if the effect is to provide the purchaser of its shares with the cash needed to pay for them." 11 Meaning of financial assistance Courts must examine commercial substance and reality to determine whether financial assistance has been given:Charterhouse Investment Trust Ltd v Tempest Diesels Ltd [1986]BCLC1at10 65/18/2011 6 11 Meaning of financial assistance • Belmont Finance Corp Ltd. v Williams Furniture Ltd. [1979] Ch 250 (Court of Appeal)  Any transaction for the purpose of financing the acquisition may involve provision of financial assistance.  Hoffmann J in Charterhouse: “the Belmont case indicates that the sale of an asset by the company at a fair value can properly be described as giving financial assistance if the effect is to provide the purchaser of its shares with the cash needed to pay for them.” 12 Meaning of financial assistance • Courts must examine commercial substance and reality to determine whether financial assistance has been given: Charterhouse Investment Trust Ltd v Tempest Diesels Ltd [1986] BCLC 1 at 10