Q1 Complex Hypo Note - this question would be worth 30 marks in an exam. Take your time to plan your response carefully and ensure you understand the facts. It may be useful to draw a diagram. Exotic Industries Ltd (Exotic) runs a coal mining business. In 2012, it was hit by the decline in the world price for coal and there was a possibility that it might collapse financially. Baskin Pty Ltd (Baskin) saw an investment in Exotic as a good idea. Baskin believed that the coal price would recover so it bought a large parcel of newly issued ordinary shares from Exotic. This extra share capital saved Exotic from financial collapse. At Baskin's request, the shareholders of Exotic voted to alter the constitution of Exotic to provide the following provision: 'A dividend of 5% shall be payable by Exotic to Baskin in the event that the company has sufficient profits available.' The coal price improved and in 2015, Exotic made a very large profit. However, the directors of Exotic have decided not to pay a dividend to Baskin. They are concerned that Baskin might use a dividend payment to buy more Exotic shares from existing Exotic shareholders. This could result in Baskin holding the majority of Exotic shares, and the directors fear they could lose their positions on the Exotic board. Baskin are very unhappy with Exotic's failure to pay a dividend, as it was crucial to their decision to invest in Exotic. (a) Advise Baskin what legal action, if any, it can take in relation to the non-payment of the dividend. (b) Have the directors of Exotic breached their duties under the Corporations Act 2001? Do NOT discuss s180, 182 or 183 of the Corporations Act or their general law equivalents Q2 Basic Hypo Note - this question would be worth 5 marks in an exam. Kit Mun Investments Pty Ltd (KMIPL) is experiencing financial difficulty. Nevertheless, two of KMIPL's shareholders, Quang and Edward, are hoping to receive a dividend and have bene putting pressure on the directors of KMIPL. Although KMIPL did not make a profit this financial year, its directors decide to pay a dividend of $0.50 per share. (a) Are the directors permitted to pay the dividend? (b) If the payment of the dividend causes KMIPL to become insolvent, what are the consequences for the directors of KMIPL