Question: Modern Design Ltd is a property developer and Gerry is a major shareholder of that company.He discovers that Bellman, who is the managing director of

Modern Design Ltd is a property developer and Gerry is a major shareholder of that company.He discovers that Bellman, who is the managing director of the company, has made recommendation to the board of directors to enter into a building supply contract with Brick and More Pty Ltd, a company belonging to Bellman's cousin, which has low financial standing and is in need of promoting.As a result of entering into that building supply contract, Modern Design Ltd makes a massive loss in profits and its share prices suffer.The board of Modern Design Ltd does not want to see the company institute legal proceedings against Bellman.

Can Gerry successfully initiate a court action against Bellman on behalf of Modern Design Ltd for breach of his duties as a director?If so, how and on what grounds?Explain with supporting case law and sections of the Corporations Act 2001 (C'th).

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