How Sustainable is the Luxury Fashion Industry - Case Study Example

The shareholders’ claim to the profits earned by the two directors and the lawyer is based on their interests in Mall Landholdings Ltd. Any profits made by Mall Landholdings Ltd are highly likely to reach the shareholders in terms of dividends. However, personal profits earned by the two directors and the lawyer would not be in their reach if they are not paid over to the company. This claim comes about because the shareholders could argue that these parties earned proceeds through the company in which they own shares.

In response to this claim, each of the parties might argue that Mall Landholdings Ltd could not have afforded to buy the second mall were it not for their respective investments. In that respect, the profits they earned represent their returns on investment. It is highly likely that the legal proceedings instituted by the shareholders against the three parties will be ruled in favor of the two directors and the lawyer. This is because the underlying transaction was a legal business deal among all involved parties; Mall Landholdings Ltd, the two directors, and the lawyer.