case United Kingdom English original

Howard Smith Ltd v. Ampol Petroleum Ltd

Leading proper-purpose authority holding that directors may not use share-issue powers primarily to alter control in a takeover contest.

Use It For

Use this with Unocal and Revlon to compare UK proper-purpose doctrine with Delaware enhanced scrutiny.

Teaching Notes

The case helps keep three questions separate: whether directors acted honestly, whether they used a real power, and whether they used it for the proper purpose.