question 1

Tanked Pty Ltd(Tanked)has four directors who have been found guilty of insolvent trading under s 588G ofthe Corporations Act2001 (Cth). Holly,one of the directors,believes she is not liable as she relied on a financial report prepared by the accounting intern that showed the financial situation ofTankedwas good. Bob also believes he is not liable ashestood down from management some months earlier to assist his unwell wife. Richmond also believes he is not liable as he didn't read the financial report from the Chief Financial Officer which showedTankedwas heading towards insolvency.

Advise Holly, Bob and Richmond as to what defences they might be able to raise to avoid liability for insolvent trading.

Question 2

Imaging Pty Ltd (Imaging) sells health care and consumer imaging products. Big Bankhas asecurity interest over all of the business and assets of Imaging.

Imaging has been struggling financially and has missed a loan repayment due to Big Bank. The loan agreementbetween Big Bank and Imaging provides that where there isa default in payment Big Bank is entitled to appoint areceiver.

On 1 June2019Tim is appointedreceiverof Imaging. Tim decides to sell the medical imaging assets. He lists the assets on Gumtree and takes the first offer.Tim decides that the medical imaging side of the business is not profitable and dismisses15employees.

Advise Tim as to his rights and dutiesasreceiver