JV Investor Pty Ltd has four directors: Adderson, Boon and two nominees of Blue Ltd, the company that owns the other 50% of the issued shares in JV Investor. JV Investor has spent several million dollars on developing the new technology, but it is not going well. The chief operating officer of JV Investor sent a report to its directors explaining that there were cash flow difficulties, that rival technologies were emerging, and that the prospects of JV Investor raising further capital by borrowing or further equity injections from AMGL or Blue were limited. At a board meeting attended by Boon and the two Blue nominees, the directors resolve to enter into an agreement with a German software firm to purchase the intellectual property that might assist the project. Adderson is away on holidays and does not attend the meeting. Have the directors (or any of them) breached their statutory duty to prevent insolvent trading by JV Investor?

Answer rating: 100% (QA)

ANSWER Question 1 The directors have breached their statutory duty to prevent insolvent trading by JV Investor The directors of JV Investor Pty Ltd ha... View the full answer