!! PLEASE ANSWER IN IRAC FORM !!

maximising their value. Often this involves selling off the assets of the struggling business for a sizeable profit. Flip has three directors: Carla, Dave and Ernie. At the June Board meeting, discussion centred on the purchase of a manufacturing business for $2 million. Carla had researched this target business, and presented information to the Board about the assets of the manufacturing business and their likely resale value. Dave was distracted by unrelated matters during Carla's presentation, but when it came time to vote on the resolution to acquire that target business, Dave voted 'yes' because he didn't want to reveal his distracted state. Ernie voted against the acquisition until more research was carried out on the target business, but he was outvoted. Flip proceeded with the purchase of the manufacturing business. When Flip tried to sell the assets of that business, it found that local competitors were not interested in buying the available business assets. Further, this manufacturing business acquired was heavily in debt and about to lose a negligence case that would cost the business $3 million in damages. Instead of making a profit from the acquisition of the manufacturing business, Flip was making a multi-million dollar loss. Ernie was very upset by this disastrous outcome. He was concerned that he might not receive a bonus this year and that he might even lose his job as a director of Flip. With these concerns in mind, Ernie withdrew $200,000 from Flip's bank account, to pay himself a bonus. Discuss any liability that Carla, Dave and/or Ernie may have for breaching any directors' duties they owe under the Corporations Act 2001 and/or common law