Breach of Duties under Corporations Act 2001

Running head: BUSINESS AND CORPORATION LAW
BUSINESS AND CORPORATION LAW
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1BUSINESS AND CORPORATION LAW
Article Details
Claims regarding the breach of duties under the Corporations Act 2001 (Cth). Have been
brought to the Australian Securities and Investments Commission against the directors of the
flight booking company Bestjet. The administrators and partners of the collapsed company
believe that the obligations to act in good faith and in best interest of the company may have
been breached by former and current directors of the company which led up to the collapse of the
company. The administrators statement reported by ASIC further include that the company may
have been trading even after insolvency from early December 2018 and the financial records
were incomplete and unreliable. There has been report of removal of security equipments from
the company’s headquarter. The collapse of the company has left around 4,684 ordinary and
unsecured creditors with claims estimated to be of almost 10.8m.
Issues identified through Article
The primary issue that can be identified in regard to the article is the breach of director’s
duties by the current and former directors. The breach of duties of directors is required under the
Corporations Act 2001.
Another issue that can be identified in the article is that the continuation of trading even
during insolvency.
Rules identified in association with the article
Section 180-184 of the Corporations Act 2001 states the general duties of the directors of
a company. Section 180 of the act states that a director must exercise their duties with care and