claw 6002 Directors’ Duties – Good Faith Question 8 and answer .doc

Claw 6002 Directors’ Duties – Good Faith Question 8 and answer .doc

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LECTURE 9 (WEEK 9 commencing 8 May 2017) Directors’ Duties – Good Faith Facts: Tortellini Ltd runs a popular restaurant in Crows Nest, near North Sydney. The company, originally a family-owned business, owns the land on which the restaurant is built. There is also a large car park and small shopping centre on the land. The company uses the replaceable rules and has only one class of shares. There still are a number of family members who are shareholders of Tortellini but, over the years, this shareholding has been considerably diluted as outsiders have acquired interests in the company. The company is now only 40% family owned. Vivian, a member of the family, is the managing director of Tortellini and holds 10% of Tortellini’s shares. The value and profitability of the company has been declining over the last few years due to the increased enforcement of anti-drink driving laws. A minority shareholder of Tortellini, Chaser Pty Ltd, has started buying shares from other shareholders at any opportunity with a stated objective of gaining control of Tortellini.
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