Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ken and Terry's Ice Cream Pty Ltd (Ken and Terry's) is a small proprietary company that produces ice cream. Ken and Terry's has 3 directors

Ken and Terry's Ice Cream Pty Ltd (Ken and Terry's) is a small proprietary company that produces ice cream. Ken and Terry's has 3 directors Ken, Terry and June, who are also shareholders with 26% each of shares in the company. The remaining shares in Ken and Terry's are held by 5 other individuals who are long-time friends of the 3 directors.

Ken, Terry and June founded Ken and Terry's back in 1970 after meeting at a confectioner's convention in the United States. However, in recent times, the relationship between Ken, Terry and June has become very poor. In fact, Ken knows that Terry and June want to remove him from the company, or to at least punish him for some reason. Terry and June have not been inviting Ken to Board meetings, and so Ken has very limited knowledge of current events at Ken and Terry's. Out of desperation, Ken decides to take a look at the company's books. He discovers by chance that Terry and June have recently transferred company property (to the value of around $500K) into Terry's name. Ken also discovers that Terry and June approved unusually high "consulting" fees to a company which, upon further investigation, turns out to be owned by Terry. When Ken asks Terry and June for their clarification on these hidden transactions, they inform Ken they will use their 52% voting power to fire Ken from his job as a director in Ken and Terry's. Terry and June claim that Ken "has never properly performed in his job as director" and that he "hasn't got a clue about the business".

Question: Have Ken, Terry and/or June breached their directors duties?

Make sure you use I.R.A.C. to structure your answer and make reference to the relevant sections from the Corporations Act 2001 (Cth) and case law.

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

Criminal Law And Its Processes Cases And Materials

Authors: Sanford H. Kadish, Stephen Schulhofer, Rachel E. Barkow

11th Edition

1543810772, 978-1543810776

More Books

Students also viewed these Law questions

Question

What are your options besides a rote memory approach?

Answered: 1 week ago

Question

2. How do I perform this role?

Answered: 1 week ago