Fenwick Goods Ltd (Fenwick Goods) is a small pharmaceutical company. It is perhaps best known for its product Fenwick Air Fresh, as commonly used in many household bathrooms across the nation. Fenwick Goods has 3 directors, Jack, Jill and Jimmy, who are also significant shareholders as each of them hold around 25% of shares in the company. The remaining shares in Fenwick Goods are held by several other individuals and small companies. Jack, Jill and Jimmy founded Fenwick Goods back in 1988 after meeting in chemistry class and deciding to go into business together. However, in recent times, the relationship between Jack, Jill and Jimmy has broken down. Jimmy feels that Jack and Jill want to remove him from the company as the two have grown very close to one another. Jack and Jill have been excluding Jimmy from their discussions about Fenwick Goods - Jimmy has no idea what is going on in the company. Jimmy decides to take a look at the company's books, and discovers by chance that Jack and Jill recently transferred the company Ferrari (worth around $300K) into Jack's name. Jimmy also discovers that Jack and Jill approved large marketing fees to an unknown company which, upon further investigation, appears to be owned by Jill. When Jimmy asks Jack and Jill for their clarification on these transactions, Jack and Jill tell Jimmy that he has "misinterpreted the books" and that Jimmy "has not been paying attention to his job"

Q) Have Jack, Jill and Jimmy breached their directors duties? Outline which directors duties they may have breached. Make sure you use I.R.A.C. to structure your answer and make reference to the relevant sections from the Corporations Act 2001 (Cth) and case law.

Answer rating: 100% (QA)

Issue Are Jack and Jill and Jimmy violating the fiduciary duty towards the company Rule As per the r... View the full answer