The company apparently made bookkeeping entries to reflect this, but no cash or cheque ever issued to advance the loan, and no cash or cheque came back in the opposite direction to pay for the shares. Furthermore, the “option” plan said that loans would only last five years (AB v. 3, p. 150). The company and directors purported to extend these loans when the five years expired, but the shareholders did not ratify that. Each loan was secured against the shares of the individual concerned, but there was to be no personal recourse beyond the shares.
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