Reference no: EM13971252
Question: There are four cases.
I dont need references or anything.
Case Study 1
Gonzo is a recently appointed director of U R Saved Pty Ltd', a corporation formed for the purposes of assisting businesses which have IT problems. He is one of 10 directors of that corporation. Upon his appointment as a director, Gonzo became concerned about the future financial profitability of the company. He decided that he should explore new opportunities for the company, in order to ensure its financial future. Gonzo approached several businesses which his company had already been dealing with in offering their IT services over the past few years.
One of the companies Gonzo approached was Travel Services R Us Pty Ltd'. This was a very profitable company which offered internet travel sales. U R Saved had previously provided IT services to Travel Services R Us. It appeared that Travel Services R Us was looking for new investors in order to expand the range of products it had been offering. After some consideration, Gonzo decided that this was a very risky and speculative venture and not suitable for U R Saved. But he did believe that this was an opportunity that he would like to take up, so he would invested his own money in the project. Gonzo invested $100,000 and within six months of his investment he has made a profit of $1.5 million for himself.
Advise Gonzo of any duties that he may have breached as a director of U R Saved and of any civil or criminal penalties that may result.
Case Study 2
Nine Dragons Ltd is a company trading in China. The company has appointed ER Sun, an auditing firm, at its auditor. Nine Dragons Ltd wishes to borrow $1 million dollars from Quick-Finance Ltd, a company trading in Australia. Before lending the money, the directors of Quick-Finance Ltd viewed the auditor's report of Nine Dragons Ltd posted at their web-site and which was prepared by ER Sun. Based on the positive financial information contained in that auditor's report, the directors of Quick-Finance Ltd were happy to lend the money to Nine Dragons Ltd.
Six months after the loan was advanced. Nine Dragons Ltd experience financial difficulties and the company collapsed. The directors of Quick-Finance Ltd are shocked by these sudden events and are furious at the financial loss they are facing. They wish to sue ER Sun, the auditing firm, to recover their financial loss.
Advise the directors of Quick-Finance Ltd of their chances of success in successfully suing ER Sun to recover the $1 million dollars loaned to Nine Dragons Ltd on the basis of the contents of the auditor's report which they viewed on the world wide web.
Case Study 3
In 2012, three friends (Amy, Lee and Chu) incorporate Bold Fresh Pty Ltd to operate a retail fashion shop that specialized in selling the latest trendy fashion designs. Amy and Lee each held 45% of the issued shares in the company and Chu held the remaining 10% of the shares. The company's constitution stated that all three were directors of the company, with Amy being appointed as the managing director.
Chu is very critical of Amy's management but lacks the support of Lee in confronting Amy about her style of management. Lee informs Amy about the Chu's dissatisfaction with her management style. To teach Chu a lesson, Amy and Lee decide to incorporate a new company called Bolder and Fresher Pty Ltd in which Amy and Lee are equal shareholders. Bolder and Fresher Pty Ltd trades in the neighbouring suburb and Amy and Lee divide their time between the two businesses.
Chu is unhappy when he hears about these developments but is unsure what he can do as he feels that he has been outsmarted by his friends.
Advise Chu whether:
(a) Amy and lee have breached any directors duties owed to Bold Fresh Pty Ltd under the common law and under the Corporation Act; and
(b) The remedies available to Bold Fresh Pty Ltd and ASIC for breach of duties identified above in part (a).
Case Study 4
For the past five years Chu has been the New South Wales Operations Manager of Computers Pty Ltd, a company which retails computer software and hardware. Because of his senior position, Chu knows the identity and requirements of the company's major clients.
In March 2014 Chu, at age 50, decides to retire. As part of his employment contract with Computers Pty Ltd, Chu had agreed that he will not compete against the company in New South Wales for 12 months.
In April 2014 Systems Pty Ltd was incorporated for the purposes of engaging in the retail business of selling computer software and hardware. Chu's wife holds all the issued capital in Systems Pty Ltd and is the only director. This new company actively solicits business from the customers of Computers Pty Ltd in New South Wales.
After Chu left Computers Pty Ltd in March, the company reorganised its business so that its software business was, from 1 July 2014, carried on by its wholly owned subsidiary called Software Pty Ltd. Software Pty Ltd and Computers Pty Ltd have the same directors and management. Software Pty Ltd now operates the retail software and hardware division previously operated by Computers Pty Ltd.
Advise Computers Pty Ltd as to whether the company can seek a court injunction to prevent Systems Pty Ltd from soliciting its customers. Refer to relevant cases to support your answer.
And I need them within today.