Question
Alex, Ben, Chad and Doug are the directors and equal shareholders of Table Pty Ltd, a company that manufactures and sells modern furniture. Alex, Ben
Alex, Ben, Chad and Doug are the directors and equal shareholders of Table Pty Ltd, a company that manufactures and sells modern furniture. Alex, Ben and Chad no longer get along with Doug in either a social or professional capacity; they want him out of the company. They suggest that he resigns as director, and they offer to buy out his shareholding at a price that they have decided is fair. Doug refuses. Alex hears about a business opportunity from his old school friends, Emma and Frank, who are furniture designers who have links into an overseas market. Emma and Frank want to collaborate with Table Pty Ltd. The opportunity would be one where Emma and Frank design new cutting edge furniture; Table Pty Ltd would then build that furniture and sell it locally and into the overseas market, using Emma and Franks business contacts. Alex then discusses this opportunity with Ben and Chad; they think its a great idea as they have always wanted to crack an international market. They decide that instead of taking the opportunity to the next Board meeting of Table Pty Ltd, they would keep it secret. They decide to form a new company Chair Pty Ltd in which they would be the only directors and shareholders. Chair Pty Ltd then enters a contract with Emma and Frank and they start business. This collaboration brings in huge profits for Chair Pty Ltd. Doug realises that Alex, Ben and Chad are no longer concerned about the business of Table Pty Ltd. Doug finds out about their new company (and the business opportunity with Emma and Frank) and is very upset. He feels that he has been cheated out of this lucrative deal. He shares his concerns at the next Table Pty Ltd board meeting. Alex, Ben and Chad tell Doug that they do not care and that they had to do this because Doug was a horrible person and was difficult to work with. Doug is sick of working with Alex, Ben and Chad and tells them he resigns as Director. With reference to the Corporations Act 2001 and case law, what actions can Doug take in relation to the above conduct? What remedies are personally available to him?
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