Gabriel, Dora and Andy all study astronomy at Wollongong Uni. They spend many nights stargazing together using Dora's sophisticated telescope. Gabriel, who is very financially astute, convinces Andy and Dora that the future lies in mining oxygen from the Moon. Andy, who has a life-long interest in mining and oxygen, is convinced it will be possible. After much discussion, Andy, Dora and Gabriel decide to form a company to conduct Moon mining, called "Mooneralogy Pty Ltd". All of the family members of Andy and Dora think this is a brilliant initiative, and are thrilled when they are allowed to purchase parcels of partly-paid shares. Gabriel's family, however, thinks this is stupid, and say they are not interested in purchasing any partly-paid shares. The directors of Mooneralogy Pty Ltd are Gabriel, Dora and Andy.

The directors resolve to set themselves the goal of buying a rocket with a rover, which will be sent to the Moon, to take core samples and report on the oxygen levels in the Moon rock. This will be a very significant undertaking. Luckily though, a group of very smart students in the robotics department at Wollongong Uni tell the directors of Mooneralogy Pty Ltd that they will provide a rover to Mooneralogy Pty Ltd for free. All that Mooneralogy Pty Ltd needs to do now is buy a rocket. Luckily, Andy knows the world-famous entrepreneur, Reelon Dusk,. Gabriel, having worked as a high-powered corporate lawyer for a bank, says he can get Mooneralogy Pty Ltd a loan for $1 million to buy a rocket from Columbia Bank Ltd.

Andy contacts Reelon to say he needs a rocket to take a small rover to the Moon. Reelon tells Andy that it just so happens he is the largest single shareholder (30%) and CEO of "Dusk to Dawn Solar System Solutions Ltd", and he has just the thing Andy needs: "Reelon's Pocket Rocket 2000". He tells Andy these retail for $ 1 million. Andy explains that Mooneralogy Pty Ltd is evaluating other alternatives, but that what Reelon has on offer seems like a perfect fit. So Reelon says to Andy "If you make sure I get the contract to supply this rocket, I will give you $100,000 paid into your personal account. Andy says: "this all sounds like a win-win". Andy decides it would not be worth evaluating any other options for rockets.

A few weeks later Mooneralogy Pty Ltd has a board meeting at which Andy is called on to recommend a rocket and explain his reasons. Andy decides to bluff Gabriel and Dora about how thoroughly he has investigated the rocket market by having a very big folder with himat the meeting, and pretending it is full of technical data. In fact, the folder only contains pages and pages of drawings Andy drew of spaceships while he was on the beach in Queensland. He says to Gabriel and Dora "not to worry you two. I have done a comprehensive survey of the market, found 20 great rockets, and narrowed the list down to one. I have all the technical details of the 20 rockets in this big folder I have with me". Gabriel says to Andy "I'm a finance man, and hot-shot corporate lawyer. I don't know anything about rockets, so I hope you have done all the research needed?" Dora says "my role on this board is to operate the telescope and watch our beautiful rocket fly to the Moon. I can't be distracted by technical rocket-data. I too am relying on you Andy". Andy then recommends "Reelon's Pocket Rocket 2000", which the Board accepts.

Mooneralogy Pty Ltd purchases a rocket from "Dawn to Dusk Solar System Solutions Ltd", and pays them $1 million. Reelon keeps to his word and acts in good faith towards Andy and sends $100,000 to Andy's account at Columbia Bank's Cayman. Trish, who is Dora's aunt, and is a very successful university administrator, is one of the partly-paid shareholders in Mooneralogy Pty Ltd. Trish finds out from the clever students in robotics who tell her the Pocket Rocket 2000 is not suitable. Trish immediately contacts Dora and Gabriel and tells them "Andy has really stuffed this whole thing up. He's blown $1 million on an expensive toy, and by the way, did you know Andy and Reelon were at school together?" Trish even tells them that she spoke to someone in the accounts department at Dawn to Dusk Solar System Solutions Ltd, and they told Trish that they had heard Reelon tell someone in the company canteen that he had just sold a rocket to some fools in Australia, and all he had to do was "give a little back to one of the directors".

Dora listens carefully to what Trish has said, and then says: "I can't get involved in all of this, speak to Gabriel". Gabriel says: "It's too late now, we've already arranged a huge party for the launch, we've invited all our friends".

A week later the rocket is launched, a huge party is held to celebrate, and thanks to some last-minute enhancements made to the rocket by the students in Robotics, the rocket is a huge success. The rover starts work and sends back large amounts of useful data about oxygen levels in the Moon rock.

questions :

1. Are Mooneralogy Pty Ltd's directors in breach of any of the provisions of the Corporations Act 2001 (Cth)?

2.)How could Trish protect her investment in Mooneralogy Pty Ltd?

3)Why might a creditor prefer a company to be placed into voluntary administration rather than be wound up in insolvency? Give reasons for your views.