4 Pointless Actions
6.5 Notwithstanding anything to the contrary in this clause 6, the Buyer shall not be obliged to:
6.5.1 appeal or procure that the Company appeals against any Tax Claim in any forum beyond the first relevant appellate body unless tax counsel of at least ten years’ standing advises in writing that, in his or her opinion, the chances of success in such further appeal are sufficient, bearing in mind the nature and size of the Tax Claim, to justify taking such action; or 6.5.2 take or procure that the Company takes any action the effect of which is to be likely to affect the future conduct of the business of the Buyer or the Company or affect adversely the rights or reputations of any of them; or
6.5.3
engage in fraudulent, dishonest or criminal conduct.
4.1 There is a concern that is expressed in the text above that the Covenantors will wish to pursue a tax claim when any realistic chance of success has been lost. There is probably far less risk of this than is often anticipated: the Covenantors have nothing to gain, and much to lose in the way of costs, by pursuing a claim which is not worth the costs that will be incurred in its pursuit. 4.2 The main concern that is normally expressed here is that the Buyer does not want the reputation of the Company to be sullied in some way by pursuing a claim through the courts with little prospect of success. 4.3 The last paragraph above is clearly of importance: if the Company’s tax affairs were previously handled in a fraudulent way, or if some new fraud is now being proposed in the dealings with HM Revenue and Customs, the Buyer must be at liberty to refuse to engage in it. As an example, any responses given to HMRC in respect of the roles of the Associates at Rushmere Consultants Limited must be full, fair and frank.
5Access
6.6 The Buyer shall procure that the Covenantors and their duly authorised agents are allowed such reasonable access to the books, accounts, personnel and correspondence and documentation of the Company and such other assistance as may be reasonably required to enable the Covenantors to exercise their rights under this clause 6; 5.1 This is also largely self-explanatory: the Covenantors will not be able to respond to detailed requests for information from HM Revenue & Customs without appropriate access to the accounting records.
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