Burns Pty Ltd lost many of its customers after news reports featured the maggots in their sushi and illness suffered by customers. Hank, the managing director, decided to go travelling around the world to forget the bad experience. Otis remained uninvolved in the business and Charli was busy with her new business venture with her sister. Profits decreased significantly and suppliers began complaining that they had not been paid.Some suppliers wrote letters demanding payment and threatening to wind up the company.

On one of his rare visits to the company's office, Otis discovered the suppliers' letters of demand and realised the company was in serious financial difficulties. He sought advice from an accountant who proposed that the company should sell off some assets to improve cashflow, reduce unnecessary expenses and diversify its business. The consultation with the accountant costed Burns Pty Ltd $8,000.

When Hank returned from his travels, he was unhappy to discover that Otis had spent $8000 of the company's money on advice from an accountant. Hank and told Otis that the accountant did not understand the sushi business. Hank ignored the accountant's advice and spent $15,000 on renovations to improve the appearance of the sushi bar and $3000 on advertising.

Hank arranged for his daughter to buy Burns Pty Ltd's collection of special sushi knives for $500. The collection of special sushi knives was the company's most valuable asset which had a market value of $10,000. Five months later, a liquidator was appointed by the court.

(i) Advise the liquidator whether any of the directors are personally liable for the company's debts. Explain the relevant law and discuss how it applies to the facts above.

[10 marks]

(ii) Can the liquidator seek compensation on behalf of creditors in relation to the collection of sushi knives bought by Hank's daughter?Discuss the applicable law.

PleaseanswerthequestioninIRACformat