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.4 .- 4- .a provide expert advice with regard to a business situation with this company. Based on the information provided in the Fashion First

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.4 .- 4- .a provide expert advice with regard to a business situation with this company. Based on the information provided in the Fashion First Case Study, the directors of Fashion Flrst Pty. Ltd. would like you to advise them as to the liability of the mentioned parties under common law and Corporations law. Ensure that relevant case law is mentioned in your advice. Provide the advice to your client in the form of a report addressing the client's requirements. Case Study: Fashion First Pty. Ltd. Andrew Brian, Colin, Diana and Elizabeth were the directors of Fashion First Pg. Ltd Fashion First Pty. Ltd. is a company engaged in the business of importing and supplying fashion accessories to the local market Andrew is also the Managing Director: The company has decided that as the market was becoming more competitive. it needed to expand its business it felt that with increased volumes of sales it would be able to lower its prices and become more competitive. in order to do so it obtained a $4 million loan from ABC Bank Ltd. $3 million was used to buy more inventory and $1 million was used to buy a large new warehouse and showroom from development interests Pty. Ltd Colin was not at the meeting where these decisions were made, as he was in hospital recovering from a serious accident Elizabeth had not attended the meeting (as was her usual custom) but had signed the requisite documentation agreeing to the expansion of the business and the obtaining of the loan. Diana had attended the meeting but said she did not know if she agreed with the proposal and abstained from voting. Andrew and Brian both voted to go ahead with the expansion of the business and the getting of the loan. About this time Brian established contact with George who was setting up a new business as a retailer of fashion accessories George was looking for reliable supplies but said he would not deal with Fashion First as he did not like Andrew. Not wishing to miss out on such a lucrative business opportunity Brian arranged to set up his own business as a fashion accessory wholesaler and a contract was entered into between George and Brian for the supply of fashion accessories. Six months later Brian resigned as a director of Fashion First At the same time it was clear that Fashion First has over-extended itselt was insolvent and could not pay the interest on its loans lt also became clear that Brian was a major shareholder in Development lnterests Pty. Ltd and the other directors of Fashion First had been unaware of this at the time of purchase of the warehouse and showroom. Furthenhore, Brian had been approaching other established customers of Fashion First and had secured orders for his own business

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