Nectar Pty. Ltd (Nectar) runs a fresh juice business from Hunter Valley, SW. There are three

shareholders: Anthony, Jenny and Chandan. Anthony holds 200 shares, Jenny holds 120

shares and Chandan (an employee of the company) holds 50 shares. All three have also been

directors since the registration of the company. Jenny is the Managing Director and

Chairperson of the Board.

Jenny's friend approached her, asking whether Nectar would be interested in investing in a

new company, Nirvana Pty. Ltd (Nirvana) that owns a few local orchards growing oranges and

nectarines. Jenny said she would be personally interested but would also put it to Nectar's

Board of Directors at its next meeting. At that meeting Anthony said it sounded a bit vague and

ndicated he was not interested in further diversifying. Chandan thought it was a good idea, but

chose not to, as he generally agreed with whatever Anthony said.

At the following board meeting, Jenny asked Anthony and Chandan to approve a large loan to

her at low interest as she was going to renovate her house which Anthony and Chandan

approved. Instead, Jenny used the loan money to buy a large number of shares in Nirvana

and subsequently she was also appointed a director of Nirvana. Six months later the share

value of Nirvana increased substantially.

Anthony and Chandan have now realised that Jenny has made a large profit from his

investment in Prospect and believe that he should pay that to NECTAR. Jenny has refused.

Required: DO NOT REPEAT THE FACTS. Discuss whether any of the directors in this case

scenario have breached or may be about to breach their directors' duties. Note: only discuss the duties in corporations Act 2001 (4th)