This question concerns a multi-generational business which commenced operation in Brisbane in 1824. The early corporate structures were modernised in 2005 when the company was rebranded and incorporated as Company 1824 Investments Pty Ltd (Company 1824) by the then head of the family William (born in1936). William at this point held 59% of the shares in Company 1824 and his wife, Alice (born 1945), had the other 41%.

During the 1970s William and Alice had 1 daughter, Elizabeth, and 3 sons, Albert, Edward and George. From 2005 to 2015 William acted as chairman, CEO, company secretary and treasurer of Company 1824. When the company was formed in 2005 William appointed his 4 children as directors, however as they held no shares in Company 1824 at this point, their role was very limited to supporting William complete various transactions. The children were paid according to the work they did on transactions and for attending meetings. The rate of pay was substantially below market rates.

In 2015 William held a general meeting of Company 1824 on his 79th birthday. At this meeting he announced he was appointing his eldest son, Albert, to act as chair of Company 1824. Albert agreed but raised the idea of increasing payment to market rates. William laughed and said "over my dead body". He explained that his 59% of the company was to be divided on his death equally between the 4 children, giving them each 14.75% of the company. As the company was valued around $20 million they were all working for their own futures.

In the 2015 general meeting William retained managerial control as managing director and CEO, while his son George became deputy CEO, Albert was appointed chairman of Company 1824 and Edward as company secretary. Elizabeth was appointed as an ordinary director without portfolio and Alice was not appointed to the board and did not vote in the annual general meeting. This structure continued for 2 years until late in 2017 William died.

William left his 59% of the company equally between his 4 children leaving them each 14.75% of the shares in Company 1824 and his widow Alice retained her 41% in the company. A general meeting of shareholders was held a few weeks after William's death in 2017 to discuss the future direction of the company. At the October 2017 meeting Alice had strong views on how things should be done in Company 1824. She gave a number of suggestions to how investments should be better managed and told "the children" how one of the company's major transactions should be done "better". Rather than arguing, the children let Alice negotiate and manage a major transaction for Company 1824.

In the October 2017 meeting George was confirmed as managing director and CEO, Albert as Chair and Edward and Elizabeth as ordinary directors without portfolios. Alice did not take any position on the board.

During the rest of 2017 and 2018 Alice kept popping into board meetings and offering her suggestions. Often the board just followed her advice but Albert was not convinced some of them were good for Company 1824.

Albert called a members meeting of Company 1824 for September 2018. At this meeting he set out his vision for the company. Alice set out a different vision and moved to appoint Elizabeth as chair and managing director of Company 1824. Elizabeth agreed and their voting block ensured Elizabeth was appointed chair and managing director. Albert, Edward and George were kept as directors without portfolio.

At the September 2018 meeting Alice moved that directors wages were not increased, were kept below market rate and that larger dividends were paid. With the support of Alice this motion was carried.

On 9 April 2019 a board meeting was held there Albert had a motion to review director's remuneration. Alice had heard of this motion from Elizabeth and turned up at the board meeting. She came with scones and coffee and said she was only there to have morning tea with her children and then she would duck out when the meeting started. In fact Alice did not leave when the meeting started and offered her opinions most firmly throughout the meeting.

Albert, Edward, Elizabeth and George agree, with Alice nodding agreement in the background that they should send the decision on director's remuneration off to a management consultancy that specialises in family businesses. They will let this independent party decide how much director's should be paid for their previous and future work, and providing it is commercially viable, then George is directed to make payments accordingly.

After this motion was agreed upon Alice said a dividend should be paid to shareholders. Albert raised his eyebrow and said to the room at large "mum you are not on the board". Elizabeth smiled and said that she had a motion that a dividend should be paid to shareholders. Albert countered that the dividend should be set 50% of the maximum possible dividend. Elizabeth countered that she was moving a motion that the dividend should be set at 75% of the maximum possible dividend, that she should send the financial papers from the board meeting to their external accountant to determine the appropriate figure and that she should be given delegated authority to pay the amount fixed.

The board reluctantly agreed. The consequence of the two above motions sets Company 1824 on a financial disaster.

Both the assessment of directors' remuneration and the dividends to be paid were assessed on the financial documents provided to the meeting. These were finalised on Friday 7 June and relevantly provided:

Total real estate assets were $20 million. These assets are made up of some large land holdings and would be hard to sell.

Total liabilities were $5 million

There is $250,000 cash in the accounts on 7 June after paying all outstanding bills

330,000

There are $230,000 fixed expenses for June

There will be $300,000 as a payment for construction on one of the Company 1824 properties

$1 million in income from the sale of a property developed by Company 1824 came in on 6 June

The consultant determined that directors should receive a one-off payment each of $250,000 to cover significant and sustained under-payments and then advised the board should consider a more reasonable remuneration structure in their next meeting. Details of this proposal were provided.

On 10 June George made payment of $250,000 to each director of Company 1824.

On 10 June Elizabeth was informed that that the maximum possible dividend was just over $1 million dollars and that a total payment of $750,000.00 was possible. After receiving this advice, Elizabeth divided $750,000 between members according to how many shares they held. On 10 June she used electronic funds to transfer the dividends.

On 11 June George checked the Company 1824 accounts and notices that there has been some automatic payments and that is a large bill due for payment on 12 June, the company account is significantly in the red and calls an immediate meeting of the directors of Company 1824 using a conference call. Elizabeth is at Alice's house and they call in together. Albert, Edward and George attend via their separate phone lines. They argue about the best course of action and call you to give them advice.

Please advise everyone of their liability for insolvent trading and their best course of action.