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Jack, James, and Jill are directors of WonderThemeFun Pty Ltd (WTF). WTF specialises in opening and operating theme parks across Australia.
Jack, James, and Jill are directors of WonderThemeFun Pty Ltd (WTF). WTF specialises in opening and operating theme parks across Australia. Jack and James own 40% shares of the company each, and Jill owns 20%. James' hobby is to watch stars at night through his telescope. In recent months, James has been taking this 'star-gazing' seriously and has increasingly been discussing it with his fellow directors. At a board meeting, James proposed that 25% of their network of 17 themes parks be closed. All these theme parks were very profitable and as such this proposal seems odd to Jill. Jill asks Jack what he thinks about this proposal. In reply, Jack says that he completely supports James. Jill then requests to inspect the company accounts, but the majority of the board (Jack and James) refuse her request. She then wants to sell her shares to Jack and James, but they refused to make any offers. At the next board meetings, Jack and James ignored Jill's questions and they were both openly critical of her. Jack and James then pass a resolution removing Jill from the register of shareholders and that the company compulsorily acquire her shares at a fraction of what they are worth. Jill later discovers that James was basing his business decisions on his star gazing and on what he thought the stars were telling him. Jill also discovered that Jack was being paid a secret allowance from James to support all of the proposals put forward by James. On the basis of the facts outlined here, you are REQUIRED to: Advise Jill on whether any of the directors have breached their director's duties and whether Jill has any legal remedies that she may pursue to protect her personal interests as a shareholder. Also consider any action that the corporate regulator (ASIC) might take in these circumstances. Your answer should include references to relevant cases and appropriate provisions of the Corporations Act 2001 (Cth.)
