Reference no: EM131290661
Julie and Emmanuel were the co-founders and directors of Cyclone Financial Ltd ("Cy- clone"), a company investing funds of their clients in lucrative but risky financial products.
Most of the Cyclone clients borrowed considerable amounts of money from banks to invest according to the advice given by Cyclone ("margin lending"). In the second half of 2008, Cy- clone got into trouble as the Global Financial Crisis had a very negative impact on the in- vestments of Cyclone and its clients.
In early December 2008 the situation became very critical and the directors of Cyclone, namely Julie, Emmanuel and the Cyclone CFO Mark, discussed plans on how to drastically cut costs. They agreed to make 10 of the 13 Cyclone staff members redundant with immediate effect. Mark had worked with a small group of people the whole afternoon of Sunday, 14 December 2008 until the early hours of Monday to put together a rescue plan for Cyclone and to prepare for a voluntary liquidation if things got worse, before he retired to get some sleep.
When Mark returned to work on Monday 15 December 2008 at around 8:30am Lauren, a senior financial officer, told him that Julie had instructed a payment of $2 million to be made to a personal bank account she shared with her husband Emmanuel.
Julie had argued that the Cyclone board of directors had approved a bonus of $10 million to be paid to herself and Emmanuel and that the $2 million payment had come out of this.
Mark became "very uneasy about it" and sought a legal opinion from a very well renowned law firm in Sydney. The law firm advised him that there was no legal basis for the payment, as it had depended on the successful float of Cyclone shares, which had not occurred.
In early January 2009 Cyclone was forced into liquidation. It turned out that Frederic, the son of Julie and Emmanuel has withdrawn all the money from his parents shared account to buy a luxury boat on which he currently lives.
Disregarding that Cyclone potentially was insolvent on 15 December 2008 and disregarding possible criminal action, advise the liquidator whether Julie has breached her directors' duties and if so whether Cyclone can recoup some or all of the $2 million.
|
Organizational culture and ethics resources
: Creating and maintaining a positive organizational culture in any organization or industry requires leaders to have exceptional awareness, communication, and management skills.
|
|
Continuous improvement manager
: Being able to identify opportunities for improvement based on data and other information is a valuable professional skill. Most management and administration positions require this skill, but this can be a highly specialized employment position. T..
|
|
Determine the price of an average price asian call option
: Determine the price of an average price Asian call option. Use an exercise price of 95. Count the current price in determining the average. Comment on whether you would expect a standard European call to have a lower or higher price
|
|
Develop classes for a billofsales customer item and product
: In this assignment question you will develop the functionality of a simple Accounts Receivable system. You will develop classes for a BillofSales, Customer, Item, and Product.
|
|
Very critical and the directors of cyclone
: In early December 2008 the situation became very critical and the directors of Cyclone, namely Julie, Emmanuel and the Cyclone CFO Mark, discussed plans on how to drastically cut costs.
|
|
How do teaching principles to education
: How do teaching principles, varied learning styles (for both nurses and patients), and teaching methodologies impact the approach to education?
|
|
Determine the prices of the following barrier options
: Then calculate the actual value of the European call or put and compare that answer with your answer obtained from the barrier options. Explain why this result is obtained
|
|
Coaching or mentoring activities
: What training, coaching or mentoring activities could an organisation provide for employees? Discuss in 80 to 100 words.
|
|
How does shamming manifests itself in a negative way
: How Does Shamming manifests itself in a negative way - Start with background
|