Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ed out of Energy Hertz Mines NL (EHM) was a no-liability company that operated in the Gallilee Basin of Queensland, EHM was formed in March

image text in transcribed
ed out of Energy Hertz Mines NL (EHM) was a no-liability company that operated in the Gallilee Basin of Queensland, EHM was formed in March 2018 and began operating in December of the same year. By 2019, EHM had issued 100,000 partly paid shares. At first the company g question was successful and secured lucrative contracts for mining and exporting natural gas overseas. However, during late 2020, EHM suffered a disastrous setback when the Australian government suddenly revoked the company's mining licence (the company tried to appeal this revocation but was unsuccessful, exhausting all legal and political avenues for appeal). As a result of losing its licence, EHM was no longer able to mine gas in the Gallilee and soon became insolvent. At the time of declaring insolvency in early 2021, EHM was in significant debt to creditors to the value of tens of millions of dollars. However, on the positive side, EHM owned several large agricultural properties in north-west Queensland. EHM also owned most of their mining equipment, including special equipment for extracting coal-seam gas deposits (EHM was the only company in Australia to possess this equipment). Despite the seemingly gloomy situation for EHM, several experts claimed that companies such as EHM could have a chance to recover when the global economy gets back on its feet in 2022-2023. The Board of EHM decided in April 2021 to place the company into voluntary administration. Question 2: answer parts A, B, and C below A). Could EHM make a call on shareholders for the unpaid issue price of their shares? (2 marks). B). Outline two (2) reasons why directors may desire to place their company into voluntary administration (8 marks). C). Given the circumstances of EHM, discuss each course of action that the voluntary administrator could consider, paying attention to interactions between the company's participants (directors/members) and creditors, and the administrator. Which course of action do you think would be most suitable given EHM's situation? (15 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Law Of Contract

Authors: Paul Richards

14th Edition

1292251484, 978-1292251486

More Books

Students also viewed these Law questions