Please advise her. Cite relevant cases and/or statutes.

Rebbo is a newly appointed CEO of a large public company. She is aware that amongst

various other statutory obligations and duties under the Corporations Act she has a duty

under s 180 to exercise care and diligence in her role. However, she is very worried that she

may be liable for breach of this duty whenever she makes a poor or unprofitable commercial

decision.

Have Michael and / or Andrew breached any of their directors' duties? Discuss the duties

owed by both Michael and Andrew.

Michael and Andrew are brothers. They both have a keen interest in technology. They

decide to form a business to pursue various technology projects, and decide that a company

will be the best business structure to adopt. They establish CathXander Pty Ltd. Michael and

Andrew are its only shareholders (taking 25,000 x $1 shares each), and they are also its only

directors. Michael takes a much more active role in managing the company than Andrew. Andrew

relies heavily upon Michael to provide him with information about the company, particularly

in relation to its finances, and its dealings with other companies. Andrew does not himself

investigate the finances or transactions of CathXander Pty Ltd, other than by relying on

Michael to provide him with this information. In June 2017, Michael arranges for CathXander Pty Ltd to purchase a very large quantity of electronics components. The components are acquired from ErinElectronics Pty Ltd, a company that Michael has a significant shareholding in. The transaction generates significant profits for ErinElectronics Pty Ltd. Michael signs the contract on behalf of CathXander Pty Ltd; Andrew does not sign the contract, and is not aware of the contract, as Michael does not inform him about it. The transaction puts CathXander Pty Ltd in a disastrous financial position. After paying for the very large order, it is no longer able to pay its debts. When Andrew eventually finds out (in August 2017), he is very worried - about his own potential responsibility, as well as about the failure of the business.