Have apollo and rocky breached their directors duties

Assignment Help Business Law and Ethics
Reference no: EM13923021 , Length: 1500 Words

Question 1

DEF Ltd was incorporated on January 2011 and was floated on the ASX in March 2011, having raised $20 million from investors. The company is primarily involved in mining and exploration activities in the Pilbara region of Western Australia. DEF Ltd have four directors: Apollo, Rocky, Drago and Clubber. Both Apollo and Rocky are executive directors. Rocky is the company's chief executive officer.

Clubber is the company's chair. Drago is the company's chief financial officer. The company began exploration activities in July 2011. After drilling a number of sites, a geological survey was commissioned and the results from the mine wells were tested. The results from the survey reveal that the mining site has low levels of gold deposits and is considered to be uncommercial. The company has already spent $5 million. At a recent meeting, the board considers whether to abandon its mining activities and return the company's remaining capital back to its shareholders. Both Apollo and Rocky are eternal optimists and never know when to quit. They both argue that the company is on the verge of a major discovery and should continue with its exploration activities. Clubber and Drago are less optimistic and suggest that the company's remaining capital should be returned back to investors. To avoid another heated confrontation, they agree with Rocky and Apollo that the company should continue with its drilling program. At the completion of the drilling activities in 2012, all of the company's capital has been exhausted and there have been no major discoveries.

(a) Have Apollo and Rocky breached their directors' duties?

(b) Do Apollo and Rocky have an arguable defence?

(c) Has Clubber, as the company's chair, breached any duties?

(d) Advise whether Drago, as the company's chief financial officer, breached any duties.

Question 2

Citrus Ltd, a gold mining company listed on the ASX, is currently the subject of a hostile takeover from Anglo Brit Ltd. Prior to Anglo Brit's announcement, the market capitalisation of Citrus Ltd is currently $100 million and its pre-takeover share price is $1.00. Anglo Brit has offered $1.20 per share for Citrus, representing a 20% premium. The directors of Citrus Ltd devise an ingenious plan to defeat the takeover. The board manages to convince one of its directors, Mr Lang, to be provided with an interest-free loan worth $20 million. The loan was for the purpose of purchasing shares in Citrus Ltd in order to push up the company's share price. This will mean that Anglo Brit will have to offer more to the Citrus shareholders if they are to successfully take over the company.

(a) Have the directors of Citrus Ltd breached their directors' duties (in particular duty to act for good faith in the best interests of the company and for a proper purpose) in relation to the loan that has been advanced to Lang?

(b) Can Anglo Brit Ltd take legal action against Citrus Ltd in relation to the latter's conduct and tactics concerning the hostile takeover? 

Reference no: EM13923021

Discuss current trends and prison programs

In addition to bringing about positive behavior change among inmates, reducing recidivism, and making the society safer, effective prison programming also improves facility

Brief policy statement would be- be vigilant and proactive

The brief policy statement would be: Be Vigilant and Proactive. This policy statements focuses on the individuals that are involved in the planning function, as well as invo

Create a philosophy and approach for balancing the issues

Create a philosophy and approach for balancing the issues of individual rights and the public's protection. Provide one to two (1 to 2) examples illustrating how you will ba

Analyze the amendment and your chosen event

Find a current event such as a high profile arrest in which search and seizure occurs. Write an APA fomratted 1,000 to 1,250 word essay in which you analyze the amendment and

Purchasing a camcorder from a camera

After purchasing a camcorder from a camera store, Wu discovered that its zoom did not work. Since Wu was primarily interested in taking long-range footage, he did not inform t

Explain whether potts will prevail

Soon afterward, Potts moved some sawn logs onto his back lot, and the city complained that Potts's use of his property for storage of building materials was a ‘‘nonconformin

Issues of collecting nonliteral intelligence sources

Consider the issues of collecting nonliteral intelligence sources. Explain the advantages of these sources and the challenges they might represent to a collection manager

Understanding of the issues causing the violence

He wants a better understanding of the issues causing the violence. He would like to know whether similar problems have occurred in other cities where Somali refugee communi


Write a Review

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd