Ques 1. Shorty and Shifty set up a company called Simpleton Ltd. Through the business organisation Simpleton Ltd, Shorty and Shifty raised shareholder funds to purchase a Goldmine from Façade Ltd. The Goldmine was long since past its best and most productive, but Shorty and Shifty paid the market rate that would have applied to an active mine, in its prime. Some time after the purchase, Shorty and Shifty left the jurisdiction. After they mysteriously departed, the minority shareholders of Simpleton Ltd discovered that Shorty and Shifty were the owners of Façade Ltd. The minority shareholders of Simpleton Ltd seek your advice as to what action they can take in relation to their rights and the actions of the directors. In advising the shareholders, discuss whether this action provides a role for ASIC and, if so, why that is important. Briefly consider the remedies that are available in this case and whether the type of company influences the remedies to be sought. Would your answer differ if Shorty and Shifty were not the owners of Façade Ltd and if they had not left the jurisdiction? Why? Required IRAC solution.

Ques 2: Toolbox was a comedian. Due to hisroguish humor, Toolbox gained many offers to serve on boards of companies. (He made the meetings more lively and introduced a new perspective into board room discussions). In the course of serving as a Director of Not the Sharpest in the Shed Ltd (NTSS), Toolbox learnt a lot about NTSS's market strategy for the coming years. For example, he learnt it was starting an ad campaign aimed at Generation Y, it was about to lose a court case and it was considering expanding its business overseas. Subsequent to learning these matters, but before any of them actually occurred, Toolbox sold his NTSS shares and discussed with directors of another company on whose board he served the feasibility of starting an ad campaign aimed at Generation Y. Has Toolbox breached his duties to NTSS? If so, which ones and what is the strength of the case against him? In so doing discuss relevant cases and evidence. Also discuss the penalties he may face and what occurs when there are a variety of actions that could be taken against a director. Why have these sorts of situations lead to discussion by judges and scholars of white collar crime? Required IRAC solution.

Ques3: It is often said that the bedrock of corporate law is the notion of the corporate veil. As business people you would not only be likely to deal with corporations as separate business organisations but you might also hold roles as directors. Would the courts be likely to lift the corporate veil or seek redress against you in relation to all of the following circumstances?

• You are the sole director of a Company X. Several years after it is formed, Company X collapses. In the early stages of Company X's life, you had loaned it money from your personal funds. After the collapse you seek to become a preferred creditor of Company X. What would your position be?
• The facts are the same as above, except that this time your loan is made within months of Company X's collapse and after it has experienced financial turmoil.
• You have established a subsidiary company but that subsidiary has no books of account and no business charter of its own, it seems very much to follow the lead of the holding company. Required IRAC solution

Ques 4: Recently, there have been reforms to the laws on corporate insolvency and voluntary administration. Briefly discuss those key reforms and why they were adopted. In the course of your analysis discuss particular issues relevant to group insolvencies and restructures.