its corporate law subject

cos-2112495738_8251651727852.jpg O WORDS POWERED BY TINY QUESTION 7 10 points Save Answer Scenario 1: Morris is one of the directors of P-Builders Pty Ltd, a construction company in the city. Liz is the other director while Ronny is the majority shareholder and has opted not to become a director. Liz did not submit a written acceptance of her role as director. In the last three years business has been very good because of the growing demand for housing and the availability of funding for buyers. P-Builders wishes to expand the business into other states. The company invests in new tools and equipment and triples its capacity. However, because of supply chain problems, it has become difficult to get much of their building material delivered on time and the pricing fluctuates all the time. Their building projects are now delayed, and the costs have escalated. Their sales begin to go down because most of P-Builders' prospective customers are increasingly looking for established homes rather than new homes. P-Builders is in need of orders for the construction of more homes, otherwise the company may soon face bankruptcy It is common knowledge in the industry that P-Builders is now facing financial difficulties due to its unplanned expansion of capacity and the supply chain issues that it has faced. Mornington Ltd operates a number of retirement homes nationwide and is looking to construct 30 homes in the state of Victoria. They have approached Morris and have agreed to pay $12 million on a cost-plus basis and to take delivery of the homes within twelve months of the contract date. Morris is excited as this will significantly improve the financial position of P-Builders and help in avoiding insolvency. Blake is a director of Morningte and has become aware of P-Builders' financial position. Two months after the contract is signed and P-Builders has started on the construction process, Blake contacts Morris and requests a variation of the contract so tha the price is fixed. As is customary for significant decisions, Morris speaks with Liz and they consult Ronny. Usually if Ronny disagrees with a course of action proposed by Morris and Liz, they will compromise to suit Ronny On this occasion Ronny thinks they should go ahead, and P-Builders reluctantly agrees to the fixed price contract, despite the uncertainties with the supply of building material. Meanwhile, while Ronny is inspecting the company's accounts, he notices some accounting anomalies which suggest that Morris has been misappropriating funds from the company. Ronny believes that the company ha been insolvent for some time and the supply chain issues have only just aggravated things. Suppliers have withheld supplies because they have not always been paid on time and the banks have threatened not to provic any further financing for their projects. Question PART C: With the aid of case law, explain the defences that may be available to directors who are said to have breached the insolvent grading provisions. (10 marks) cos-2112495738_8251651727852.jpg O WORDS POWERED BY TINY QUESTION 7 10 points Save Answer Scenario 1: Morris is one of the directors of P-Builders Pty Ltd, a construction company in the city. Liz is the other director while Ronny is the majority shareholder and has opted not to become a director. Liz did not submit a written acceptance of her role as director. In the last three years business has been very good because of the growing demand for housing and the availability of funding for buyers. P-Builders wishes to expand the business into other states. The company invests in new tools and equipment and triples its capacity. However, because of supply chain problems, it has become difficult to get much of their building material delivered on time and the pricing fluctuates all the time. Their building projects are now delayed, and the costs have escalated. Their sales begin to go down because most of P-Builders' prospective customers are increasingly looking for established homes rather than new homes. P-Builders is in need of orders for the construction of more homes, otherwise the company may soon face bankruptcy It is common knowledge in the industry that P-Builders is now facing financial difficulties due to its unplanned expansion of capacity and the supply chain issues that it has faced. Mornington Ltd operates a number of retirement homes nationwide and is looking to construct 30 homes in the state of Victoria. They have approached Morris and have agreed to pay $12 million on a cost-plus basis and to take delivery of the homes within twelve months of the contract date. Morris is excited as this will significantly improve the financial position of P-Builders and help in avoiding insolvency. Blake is a director of Morningte and has become aware of P-Builders' financial position. Two months after the contract is signed and P-Builders has started on the construction process, Blake contacts Morris and requests a variation of the contract so tha the price is fixed. As is customary for significant decisions, Morris speaks with Liz and they consult Ronny. Usually if Ronny disagrees with a course of action proposed by Morris and Liz, they will compromise to suit Ronny On this occasion Ronny thinks they should go ahead, and P-Builders reluctantly agrees to the fixed price contract, despite the uncertainties with the supply of building material. Meanwhile, while Ronny is inspecting the company's accounts, he notices some accounting anomalies which suggest that Morris has been misappropriating funds from the company. Ronny believes that the company ha been insolvent for some time and the supply chain issues have only just aggravated things. Suppliers have withheld supplies because they have not always been paid on time and the banks have threatened not to provic any further financing for their projects. Question PART C: With the aid of case law, explain the defences that may be available to directors who are said to have breached the insolvent grading provisions. (10 marks)