Fine Foods Limited (Fine Foods) operates a catering business in Sydney and Melbourne where it supplies food and catering staff to major conference venues. Its business has rapidly expanded over the past 4 years. The directors, all of whom are also shareholders, plan to profit from a further anticipated increase in conferences once COVID-19 restrictions are eased in early 2021.

In 2020, when the company's plans were being developed, directors Sam and Patricia, cautioned the board not to incur too much debt. These directors believed the company would have difficulty in meeting its financial commitments because there was an oversupply of catering companies in Sydney and Melbourne. They suggested the company employ an expert to advise the board on the present market conditions. The board rejected this suggestion. The company accounts for 2018/2019 showed a small profit. However, Fine Foods' finances deteriorated. In late September 2020, Fine Foods began to retrench some of its staff on the grounds of improving efficiency.

In mid-December 2020, the board authorized the signing of contracts with Jackson Pty Ltd (Jackson) for the purchase of further vehicles to deliver its food to venues. These vehicles were due for delivery in March 2021. Sam and Patricia did not support this board decision saying the purchase should be delayed. Their dissent from the board's ruling was noted in the board minutes. Paul, the Managing Director, and his friend Gary, also a director, persuaded the board to sign the Jackson contract. Non-executive director, Jane, said directors should be entrepreneurial and, although the decision involved some risk, that was outweighed by the benefits.

The company secretary, Roger, informed the board that he had received a requisition from the members that a general meeting be convened to discuss rumors concerning the company's financial position. The board followed Gary's advice to ignore the requisition. The board decided to issue Barrington Pty Ltd, one of Fine Foods' major shareholders, an additional 10,000 shares. Soon after this decision, Sam and Patricia resigned as directors.

By late December, the accounts department had received several creditors' requests for payment. This was reported to the board who decided that the creditors were responding to unfounded rumors.

2(a):What legal action is available to members of Fine Foodsto take againstthe directors on behalf of the company?Explain(10 marks).

2(b):What remedies are available for Fine Foods? Discuss(5 marks).

2(c):What legal action is available to the members ofFine Foodsto take on theirown behalf for the directors' conduct?Discuss(5 marks).

2(d):What remedies are available to the members?Discuss(5 marks).