Floppies Retailers is a fast-growing Private Limited company that sells shoes in Francistown. As plans to buy Boots a small shoe company owned by two shareholders in Serowe, the share price of Floppies Retailers rises. Half a year later, it emerges that Boots was was experiencing management problems and was sinking in debt. The share price of Floppies Retailers then drops drastically.

It comes to light also that directors of Floppies Retailers failed to identify important information pertaining to the actual value of Boots and that there was no proper due diligence. Floppies Retailers' shareholders are considering litigation against its board of directors.

A. Suggest the circumstances under which the board of directors of Floppies Retailers may be found to have breached any such duties.

Answer rating: 100% (QA)

In the given scenario the board of directors of Floppies Retailers may be found to have breached their duties under certain circumstances These breach... View the full answer