+61480015851
BULAW5915: Corporate Law Economic Reform Program (CLERP) - Law Assessment Answer
Download Solution
Order New Solution
Subject Code: BULAW5915
Internal Code: 1AHDAC
Law Assessment Answer
TASK: Background The laws relating to corporations are continually evolving. Judicial decisions, the changing needs of society, various parliamentary hearings and Treasury discussion papers have led to reforms being introduced to corporations law in Australia. In 1997, the Australian government introduced the Corporate Law Economic Reform Program (CLERP) which aimed to comprehensively improve Australia’s business and company regulation. In 2000 when the CLERP Act 1999 came into effect (part of predecessor legislation to the Corporations Act; a part of the Corporations Law), the ‘business judgment rule’ s180(2) was introduced as a ‘safe harbour’ defence of s180(1). The Corporations Act 2001 (Cth) provides for other specific defences; for example against claims of insolvent trading. Section 588H of the Corporations Act contains a defence to insolvent trading under s 588G, but there has been ongoing discussion about the need for a business judgment style rule to be made available under s588G. The Treasury Discussion paper of 2010 Insolvent Trading: A Safe Harbour for Reorganisation Attempts Outside of External Administration, again raised for discussion the concept of a modified business judgment rule (a safe harbor defence) to be available to directors under s588G of the Corporations Act. The Australian Productivity Commission report Business Set-up, Transfer and Closure, released in 2015, gave further consideration to implementing a safe harbor defence under s588G. In 2017 the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017 – was introduced offering directors a defence to claims of insolvent trading under s588G. Subsequently, in 2018, the Corporations Act 2001 (Cth) was amended by introducing s588GA and related amendments to Division 3—Director’s duty to prevent insolvent trading Tasks to be completed Part A Research and consider the reasons for the introduction of the safe harbor defence in s588GA and the effect of the 2018 amendments to Division 3 - Director’s duty to prevent insolvent trading. Answer the following questions.- Is the duty to prevent insolvent trading a fiduciary duty? Why or why not? You must give detailed reasons
- How does the safe harbour defence s588GA operate?
- Who does it (s588GA) protect, and is this different to the business judgment rule s180 (2)? Give reasons.
- Are there any restrictions on the operation of the s588GA defence? If so, what are they?
- Do you think the changes to Division 3 will have an effect on the number of voluntary insolvencies in Australia in the future? Why or why not?
- Did Mr Daly breach any directors’ duties? If so, which ones and how?
- Did any of the other directors breach their duties? If so, who, which duty and how?
- Do you think the company was trading while insolvent? Give reasons.
- If the company was trading while insolvent – are there any defences available to Mr
- Would the new ‘safe harbour’ defence assist the directors? If yes, how? If no, why not?
This Law Assessment has been solved by our Law experts at My Uni Paper. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+ Students in Australia, UK & US by helping them to score HD in their academics. Our Experts are well trained to follow all marking rubrics & referencing style.