You should refer to relevant sections of Corporations Act 2001 and any relevant common law case.

The Directors and members of the publishing company AVAL Pty Ltd (AVAL), are Mark the Managing Director, Haynes the marketing and sales manager and Stacey a non-executive director who has a degree in English literature.

You have recently been recruited to the investigation of team of ASIC, the Australia Security Investment Commission. You have been given the file of a company that ASIC are considering prosecuting, as several incidences have occurred.

In a board meeting of AVAL that took place six months ago the board asked Haynes if he would find another larger warehouse in which they could relocate as their building was being demolish soon, so they had to vacate and believed this would be a good time to upsize. Mark did raise the issue though that profits had been suffering since in the Global Financial Crisis (GFC), but believed that eventually things would turn around for them.

Haynes finds a building, but it is way beyond the budget that had been discussed in the meeting. He is very keen on it as it is currently owned by his brother, and Haynes has been financially supporting his brother of late, so would really like to help him out by getting this building sold. He does not get an independent evaluation and it turns out the company overpays for the property by $500,000.

The board approved the purchase of the building four months ago based solely on the advice of Haynes. Haynes told the board the purchased was 'a bargain' and 'the only one on the market that will suit them'. The other directors do not ask any questions, and Haynes does not disclose that it is his brothers building.

Things have now turned out badly for the company as they went into liquidation 6 weeks ago.

REQUIRED:

ASIC has asked for a brief and advise them of the following-

1. Whether the company directors have breached any of the duties under the common law and statutory law. (10 marks)

2. When the liquidator is appointed what are the liquidator's duties to the company? (5 marks)

3. What "voidable antecedent transaction" are and if the purchase of the new building may fall into this category. (5 marks)