LOTSAGOLD Ltd was incorporated in January 2018 and was floated on the ASX in March 2017, having raised $20 million from investors. The company is primarily involved with mining and exploration in the Northern Territory. LOTSAGOLD has four directors: Brendan, Gino, Max and Spike. Brendan and Gino are both executive directors. Gino is the company’s chief executive officer (CEO), Max is the company’s chair and Spike is the company’s chief financial officer. The company begins exploration surveys in July 2017 by drilling various sites to sample the rocks. The results from the survey reveal that there is next to no gold deposits and that the sites are uncommercial. By this time the company has spent $5 million. At a recent board meeting, the board considers whether to abandon its mining activities and return the remaining capital to its shareholders. Both Brendan and Gino are eternal optimists and never know when to quit. They both argue that the company in on the verge of a major gold discovery and should continue exploring in the area. Max and Spike are less optimistic and suggest that the company’s capital should be returned back to investors. In order to avoid a heated argument, they agree with Brendan and Gino that the company should continue with its exploration program. By mid-2018 all of the company’s capital has been exhausted and they have found no gold. Answer the following questions:

(a) Have Brendan and Gino breached their director’s duties? 

(b) Do Brendan and Gino have an arguable defense? 

(c) Has Spike as the company’s chief financial officer breached any duties?

Answer rating: 100% (QA)

1 the administrators ar needed to act within the best interest of the corporate interest herein impl... View the full answer