Case Study of Corporate Law
(Case- study ) | May 30
2013 |
Commercial applications of company law
CONTENTS
1. INTRODUCTION ................................................................................ 2
2. ISSUES ………………………….................................................... 2 3. ARGUMENTS OF THE DIRECTORS FOR THEIR DEFENCE.................... 2, 3
4. ARGUMENTS PUT BY ASIC AND THE COMPANY............................ 3,4
5. BREACH OF DUTIES.................................................................................. 5
6. CONCLUSION ..................................................................................... 5 7. REMEDIES ..............................................................................................6
8. REFERENCES .........................................................................................6
Introduction This assignment related to the company Gemsales Pty Ltd, which is engaged in the business of importing and supplying jewellery as wholesalers to the local market. Andrew, Brian, Elizabeth, Diana and Colin were the directors of the company. The company decided that the market becoming more competitive so they need to expand its business. To achieve their target they obtained 4 million dollar loan from Friendly Bank Ltd. They spent all the money to increase their business. All the directors of the company not attended the meetings of the company. Brian and Andrew only participate in the meetings actively. At this time Brian contact with another retailer of jewellery company, victor who looking for reliable suppliers. But he would not deal Gemsales Pty Ltd because he didn’t like
2013 |
Commercial applications of company law
CONTENTS
1. INTRODUCTION ................................................................................ 2
2. ISSUES ………………………….................................................... 2 3. ARGUMENTS OF THE DIRECTORS FOR THEIR DEFENCE.................... 2, 3
4. ARGUMENTS PUT BY ASIC AND THE COMPANY............................ 3,4
5. BREACH OF DUTIES.................................................................................. 5
6. CONCLUSION ..................................................................................... 5 7. REMEDIES ..............................................................................................6
8. REFERENCES .........................................................................................6
Introduction This assignment related to the company Gemsales Pty Ltd, which is engaged in the business of importing and supplying jewellery as wholesalers to the local market. Andrew, Brian, Elizabeth, Diana and Colin were the directors of the company. The company decided that the market becoming more competitive so they need to expand its business. To achieve their target they obtained 4 million dollar loan from Friendly Bank Ltd. They spent all the money to increase their business. All the directors of the company not attended the meetings of the company. Brian and Andrew only participate in the meetings actively. At this time Brian contact with another retailer of jewellery company, victor who looking for reliable suppliers. But he would not deal Gemsales Pty Ltd because he didn’t like
References: * Lynn A Stout, In Praise of Procedure: An Economic and Behavioural Defence of Smith v. Van Gorkom and the Business Judgement Rule, 96Nw.U.L.Rev 675 (2002) * Daniel Fischel, the Business Judgement Rule and the Trans Union Case, 40 Bus.Law.1437, 1455 (1985). * Pamela Hanrahan, Lan Ramsay, Geoff Stapledon,(2013), Commercial Application Of Company Law,14th Edition, Publisher McPherson’s Printing Group. * Farrer J, “Corporate Governance, Business Judgement And The Professionalism Of Directors”(1993) 6 Corporate And Business Law Journal 1 At 21-22. * Allen’s Arthur Robinson.2007, Directors Duties during Insolvency, 2nd Edition, and Thomson Law book Co., ISBN 9780455223490. * Keavy A, 2006, Company Directors Responsibility to Creditors, Rutledge-Cavendish, ISBN 9781845680084. * Baxt R, “Forgiving Directors For Insolvent Trading- Some Promising Signs”(February 2008) Company Director 48. * Wong S, Forgiving A Director’s Breach Of Duty: A Review Of Recent Decisions (Centre For Corporate And Securities Regulation – Research Reports And Research Papers, 2009). * Redmond Paul, University Of New South Wales Law Journal, “Directors Duties And Social Responsiveness” The Vol. 35, No 1, 2012:317-340. * Reiter, Barry, J, 1948, “Directors Duties In Canada” 3rd Edition, Published By CCH Canadian Limited, Toronto, Ontario.