Question
Wang and John declare a 'special dividend' that is only payable to shareholder who are also executive manager in the company. however Erin argues that
Wang and John declare a 'special dividend' that is only payable to shareholder who are also executive manager in the company. however Erin argues that no dividend should be able to paid because SCPL is insolvent and paying the dividend will prejudice the interest of creditors and other member. Wand produces an auditors report the from DodgyBros Accountants, who certify in an unqualified auditor's report that the company business can continue as a going concern for the next 12 months. This is based on revaluating the business' goodwill and the intellectual property to more than $20 million. DodgyBros has no basis for this revaluation, the simply relied on the information provided by Wang.
What are the potential consequences under the Corporation act of paying the dividend? Can Eric stop the dividend being paid?
What action (if any) could be taken against DodgyBros accountants for their audit of SCPL and POp Up?
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