Insolvent Trading and Directors' Duties: A Comprehensive Case Study
VerifiedAdded on 2021/02/19
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Case Study
AI Summary
This case study examines a scenario involving a director, Gino, and the company Sell my House Pty Ltd, which faced insolvency. The assignment analyzes the application of Section 588G of the Corporations Act 2001, focusing on the director's duty to prevent insolvent trading. It assesses whether Gino breached this duty by continuing business operations despite the company's financial distress. The study also explores the potential applicability of Section 588H, which provides defenses for directors. Specifically, the case considers Gino's illness and hospitalization as a factor influencing his awareness and involvement in the company's trading activities. The conclusion finds that Gino may be able to utilize the relief provided under section 588H due to his health condition at the time of the breach.
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