Q1:

Blue Star Hotels Ltd operates a chain of hotels in NSW and Victoria. Its directors are Tom Sharp, Charles Dickens and Mary Wollstonecraft. On 1 April Taylor's Linen Hire Ltd presented a demand to Blue Star in respect of a $ 2 500 laundry bill owed by the hotel group. Blue Star was unable to meet this debt. On the basis of this insolvency, Taylor's Linen Hire then filed an application for winding up on 23 April. The application was successful, and Ivan Trump was appointed as liquidator under a winding up order granted on 1 May. Ivan has requested that the directors meet with him on 5 May and provide him with a report on the company's affairs. Advise him as to what impact the following facts have on the liquidation, giving full authority for your answer:

• On 12 April Blue Star registered a circulating asset security interest in favour of Wholesale Liquors Ltd, securing a debt of $ 100 000 owed to Wholesale for wine supplied by it in February and March.
• On 2 April the Board of Blue Star, in an attempt to deal with its cash-flow problems, borrowed an amount of $ 200 000 from Grasping Bank, paying the bank an application fee of $ 50 000 and agreeing to a 25% per annum interest rate.

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QUESTION 2:

The annual general meeting of Sparx Ltd is held on 1 July. Vladimir and Anushka, who are married and who live at the same address, are both shareholders in the company. Vladimir owns 30% of the shares in the company, and Anushka 5%. The company had sent out a notice on 23 June stating that the meeting was to take place on 1 July. However, it sent only one notice to Vladimir and Anushka's address, and that notice was addressed to Anushka. Anushka did not tell Vladimir about the meeting and so he did not attend.

Several motions are agreed to at the meeting, including an amendment to the company's constitution. When Vladimir hears of the meeting and the amendment (which he says he would certainly have voted against), he is furious, and approaches you for legal advice.

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QUESTION 3:

Following great interest on online fora,Anaherawantstostarta companythat is in the business ofmanufacturing customised beanbags.Shewould need significantfunding butwould like to remain infullcontroloverthe company.

Discusstwowaysin which she canattractfundingand structurethe shares ofhercompany. Explain howthese approachesconsiderAnahera'sown interest, as well asthe interests ofpotentialfundersand/orcustomers.