D WORDS POWERED BY TINY QUESTION 4 15 points Save Answer Question 4. Marks: 30 Suggested time allocation: 54 Minutes Anit and Michael are the directors and shareholders in Property First Pty Lid. They are considering a major property development which will deplete their cash flow. They decide to approach an investor. They make an offer to Catherine, the offer is to invest $1,000,000 for a 1/3 interest in Property First Pty Lid. Catherine agrees to the investment and becomes an equal shareholder with Anil and Michael (all parties holding 1/3 each). Catherine is appointed as a non-executive director There is a delay in the new project and Property First Pty Ltd continues with their existing projects, Property First Pty Ltd's existing projects are running at a loss and the company is using the $1,000,000 invested by Catherine to survive. Catherine becomes concerned with this and looks into the accounts to discover Anil and Michael have increased their salaries as executive directors (CEO and CFO) and have also declared bonuses to themselves. Anil and Michael tell Catherine there is no issue and once the existing projects are completed there will be a dividend. However the profit is reduced to nil by Bonuses issued to Anil and Michael and no dividend is declared. In addition to this Catherine becomes aware of the following: . At a directors meeting (no notice provided to Catherine) a resolution was passed to assign a maintenance contract to a new company formed by Anil and Michael as the sole shareholders. . Anil and Michael then called a General meeting with shareholders (no notice provided to Catherine) and resolved that Catherine will be removed as director of the company. At the General Meeting of shareholders, the director's decision to assign the maintenance contract was ratified by the shareholders with a vote of 60% (Catherine not being present). Catherine comes to you with the following questions. (a) Can Catherine bring a personal or derivative action against Anil and Michael, and what should Catherine consider in making this decision? Explain your reasoning in detail. (15 marks) (b) If Catherine brings a personal action, should Catherine bring it under the general law or make an oppression claim under s 232 of the Corporations Act 2001 (Cth)? Explain the issues Catherine would need to consider in bringing the action. (15 marks) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph v Arial 10pt X2 X2 ck Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Save and Submit MacBook Pro esc % & 5 6