Reference no: EM133418798
ACME Limited is a publicly traded company in Australia, engaged in the production and sale of electronic goods. The company has a board of directors consisting of six members, including the CEO, CFO, and four independent directors. The company has been facing financial difficulties, and the board has been exploring ways to improve the company's performance.
Facts:
In 2021, the board of directors approved a major investment in a new product line that was expected to generate significant profits. The investment required a substantial amount of funds, and the board decided to finance it by issuing new shares. However, the company was unable to generate the expected profits from the new product line, and the share price began to decline.
Despite the decline in share price, the CEO and CFO continued to receive high salaries and bonuses. The company was unable to pay dividends to the shareholders, and the board did not call a meeting to discuss the issue.
An investigation revealed that the CEO and CFO had failed to disclose material information to the board regarding the risks associated with the new product line. It was also discovered that the CEO and CFO had entered into contracts with related parties without obtaining the approval of the board.
1. You are an employee at a law firm, and you have been assigned to work on the case of ACME Limited. Your task is to analyse the case and identify where the breach of directors' duties occurred.
You need to do a memo for John Moses, the Senior Partner working on the case. Your task is to provide advice on the following:
- Identify where the breach of directors' duties occurred in the case of ACME Limited.
- Identify the key elements of corporation law that apply to the case (i.e director's duties and shareholder duties)
- Identify the key provisions of the Corporations Act 2001 (Cth) and any other relevant legislation, common law, policies, or procedures that are relevant to the case.
- Identify the penalties associated with the breach.
- Advise John if the shareholders would succeed in taking action against the company and its directors.
Your memo should include similar cases and apply the facts of these cases to your scenario.
Your memo should be a minimum of one thousand words. Direct quotations will not be included in your word count.
Referencing requirements
Ensure that you use reliable and credible sources to support your work.
Reference the relevant laws, cases, and other sources of information to support your analysis.
- Choose either Harvard referencing or AGLC as your referencing style. Ensure that you understand the requirements of the style you choose and use it consistently throughout your work.
- Apply the referencing style you have chosen to reference all sources used in your analysis, including legislation, cases, and other sources of information. Ensure that you follow the correct format for in-text citations and reference lists.
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