[Questions on Directors' Duty in a Comapny, please help me with the suggested answer]

Yurame Ltd (YL) is a consumer technology company founded by four university friends: Peter, Amelia, Jack and Hugo. Peter's uncle, Cecil, has provided almost all the finance for the ventures from the inception of the company; this explains why Cecil holds 52% of the shares. The remaining shares are held in the following proportions: Peter (8%), Amelia (10%), Jack (10%) and Hugo (20%). The board of directors consists of Amelia, Jack and Peter. Jack is the chairman of the board and the chief executive officer. Peter oversees product innovation and development, while Amelia is in charge of marketing and sales. Three years ago, Hugo took up a job in Silicon Valley and left the active management of the company to his friends. The company has a promising product - the glide-board. This is a handy transportation device the size of a small surf-board that moves the user to her programmed destination on a devicegenerated air-stream. News of the product leaks to the media; analysts project that the device will be the best seller next Christmas. The pressure is on the company to get the product to the market by the Christmas sale season. The normal barrage of product reliability tests involves some four to six months. To have the product manufactured in time for the Christmas season would involve a testing period of no more than three months. At a family dinner, Cecil tells Peter than it would be ideal if the product can make it to the shelves by the Christmas sales period, as the company needs the cash-flow to pay off a bank loan due three months after Christmas. Peter asks his team to ensure that the glide-board makes it in time for the Christmas sales. His product engineers simplify some testing procedures and the glide-board makes it to the shelves in time for Christmas. As expected, the sales are good. Quantum Capital (QC), a private equity firm, acquires the shares of Cecil, Peter, Amelia and Jack. As Hugo is not contactable, he is left out of the deal. Reports soon arrive of a few of the heavier users losing balance when the glide-board navigates turns and tilts at a larger than expected angle. The company carries out a product recall and incurs a loss of some $20 million. YL (now controlled by QC) seeks to sue all the former directors and shareholders of the company for this loss.

Advise YL and QC.