ST Pty Ltd is a manufacturer and seller of children toys. A child aged 3 was seriously injured after choking on one of the toys made by the company as the toy contained small components. There was no warning sign placed on the packaging and neither was there any guidance for a suitable age. The child's parent is seeking advice to sue ST Pty Ltd.

After the matters were widely reported, ST Pty Ltd sales dropped drastically which resulted in them being in financial difficulties. Johnny, the director of ST Pty Ltd in his desperate attempt to save the company, entered into a contract for 5 million which was far from what he was authorized to do. ST Pty Ltd when into liquidation soon after. The company now in an even worst state when a senior staff of ST Ltd, Jerry was caught smuggling drugs and the drugs were found kept in ST Pty Ltd warehouse. ST Pty Ltd was called for questioning and the matter is now pending investigation.

Advise the company as to their liability in the negligence suit by the child's parents, the like hood of the company being criminalized for the drug trafficking and the 5 million contract entered by Johnny.