1. Case Study: (60 points) Sid and Bernie are the directors and majority shareholders of Meissen GmbH, which manufactures porcelain ornaments for export. In January 2021they are advised by the company's accountant that the business is in serious difficulties due to the strength of the Euro, which had made the company's products more expensive abroad. In the view of the accountant, the business will be insolvent within months. In June 2020 Meissen GmbH finds itself with "temporary cashflow problems" and so Bernie approaches the bank in order to increase the company's overdraft facility. An increased overdraft of 75,000 is duly agreed, however, as a condition of granting the overdraft, the bank insists on a "first fixed charge" over the company's fixed assets together with a floating charge over the company's entire undertaking. In addition, the floating charge contains a restriction preventing the company from granting any other charge over its assets which ranks in priority or equal to the bank's charge, together with a clause which stipulates that the bank's floating charge will crystallize immediately in the event of the company attempting to grant a competing charge in favor of anyone else. The company's fortunes briefly improve but, by the end of 2020 the company is again in crisis. In an attempt to keep it afloat Bernie obtains a further loan of 20,000 from Loanshark AG who, before agreeing the loan, insist on a floating charge on the company's entire undertaking. Sid is the sales director of the company and unknown to Bernie, he has been negotiating a deal with 'Nick-Nacks' a shop which selis fine china and ornaments, and which has previously bought stock from Meissen GmbH. In January 2017 Sid secures a five-year contract for orders worth 200,000 but, rather than pass the order to Meissen GmbH, he decides to set up his own factory and take the order himself. In February 2021 Sid and Bernie decide that the accountant was right after all and decide to wind up Meissen GmbH, leaving a large number of creditors unpaid. The value of the company's assets has yet to be fully assessed but they are clearly insufficient to meet the company's debts. Discuss the following questions: 1.1. What are the charges and duties of each of the directors in this case? 1.2. How could the OECD corporate governance principles have helped in this situation, in particular as to accountability of the directors and creditors' protection