Aardvark HoldingsPty Ltd ("Aardvark") is a company incorporated in2014.It is the holdingcompany of a group of subsidiary companies.The subsidiaries operate a variety of differentbusinesses. One particular subsidiary is Better NomineesPty Ltd ("Better"), which was incorporatedin 2016, was established for the sole purpose of being the trustee of a trust, the Charlie Trust Fund("Charlie"). Better (as trustee for Charlie) operates a dry-cleaning business on land owned byAardvark.However, there is no separate lease agreement with Charlie and no rent appears to bepaid.The sole beneficiary of Charlie is Aardvark.Aardvark has 6 directors:Delta (the managing director), Eric (the chair andDelta'shusband), Fox,Gideon, Hannah and Indigo.Each of the directors, except for Gideon and Hannah, owns one votingshare in Aardvark.Gideon and Hannah own two and three shares respectively.The company's head office is inMelbourne.All its directors and shareholders live in Melbourne,except for Gideon, who lives in Sydney.Aardvark follows the replaceable rules, with one exception.There is a clause that states thatAardvark cannot enter into any loan, or provide a security for any loan, in excess of $500,000without the approval of the general meeting.Better'sdirectors are the same asAardvark's, but it does not appear to hold board meetings:thedirectors merely sign resolutions (which they term "circulating resolutionsof Better")when they aremeeting at the board meetings of Aardvark.The dry-cleaning business is operated by Juliet, anemployee of Aardvark. Neither Charlie nor Better have their own bank accounts:all revenue fromthe business is placed into Aardvark's bank account, and all expenses are paid by Aardvark.Thesereceipts and payments are booked as revenue and expenses of Aardvark, and there are no separatemanagement accounts for Charlie.At the end of every financial year, the accountant for the group,Kilo Accountants, drafts minutes of supposed meetings of Better, which declare trust distributions 1 from Charlie to Aardvark equal to the profits from the dry-cleaning business.However, KiloAccountants does not prepare separate accounts for Charlie.One of the customers of the dry-cleaning business, a wealthy entertainer known only as "Lim-Ah",sues the business.Lim-Ah claims that the business damaged his very expensive clothes, valued at$500,000.The statement of claim is served on Delta, who immediately discusses this with Juliet.Juliet states that Lim-Ah does not have a case, as he had been warned of the dangers of thetreatment on his clothes.After protracted negotiations with Lim-Ah's lawyers, Mike November, itis agreed that Better (as trustee for Charlie) will pay a settlement amount of $400,000, inclusive oflegal costs.The settlement contract is in the name of Better but, at the instigation of Mike,Aardvark is added as a party to the contract and Delta signs on behalf of Aardvark.Delta approaches Aardvark's bankers, Oscar Banking Corp (Oscar), to ask about a loan.This is tocover not only the $400,000, but also $50,000 in legal and an additional $200,000 to cover theworking capital of the dry-cleaning business, as several customers have stopped coming due to thelitigation.Oscar does not want the loan in the name of Better, but would rather that Aardvarkborrow the money, on security of the land on which the business is being operated.Delta calls an emergency board meeting, giving 4day'snotice, viaSMS on everyone's mobile phone,saying that there is an emergency an everyone needs to meet.She does not explain exactly whatwill occur in the board meeting.Delta, Eric, Fox and Indigo attend in person.Hannah does not seethe SMS and therefore does not attend. Gideon dials in on his mobile and is put on speaker phoneby Delta.Gideon is angry at the proposal, as he does not want the land exposed to this liability.He says thatthe business should just be shut down.During the meeting, Delta constantly puts her phone on"mute", so she can talk to the others without Gideon knowing. Before the vote is cast, shedeliberately cuts Gideon off, claiming that her phone was low on battery.The board votesunanimously (with only Indigo abstaining) for the finance.Delta and Juliet attend the offices of Oscar the next week and sign the loan documents "on behalfof Aardvark".Papas, the loan officer of Oscar, knows about the provision Aardvark's constitution,requiring general meeting approval, but assumes this was obtained.He does not ask any questions.Gideon and Hannah are angry with the contract and call a general meeting.The notice is postedto all shareholders the day after the board meeting, with the meeting to be held atGideon'shomein Sydney 3 weeks (21 days) after the board meeting.Gideon, Hannah and Indigo all attend, andvote to rescind the contract.They send notifications to this effect to the other shareholders andGideon contacts Papas to state that the loan and mortgage have been rescinded.The following day, the Oscar Corp lodges the mortgage with ASIC as a charge under the PersonalProperty Securities Act.Your client is Indigo, who approaches you after finding out that the charge has been registered.Youneed to advise Indigo on whether Aardvark will be held liable for the any the loan from Oscar, thesettlement amount payable to Lim-Ah or any other debts of Better. In particular, you need to adviseas to whether the charge could be valid. Solve according to Corporations Act 2001.