Clean Pesticide Pty Ltd (CPP) & Trinity Pty Ltd (TPL) Case Study Management Assignment Help

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Trinity Pty Ltd (TPL) runs a confectionary business. Anusha, Borden, Colleen, Dennis, and Emily are directors in the company. In recent times, the company premises have been infested with rats. To deal with the rat problem, the board passed a resolution to fix the problem and agreed that the job be given out urgently through a tender process. Felicia, the Facilities Manager was assigned the task of receiving the tenders and presenting the same to the board for final approval. Felicia provided a copy of the job description to Gregory, her partner, who is in the fumigation business. Gregory read through it and began to work on lodging a tender for the job. A week later, Felicia returns home with all the tenders and leaves them in an unsealed envelope on the kitchen slab. When Gregory returns home, he notices an envelope on the kitchen slab and opens it. He reads through all the tenders and decides to adjust his tender based on the information from the other tenders. The next morning, he hands Felicia his tender. When Felicia presented all the tenders to the board, they unanimously agreed to go with Gregory’s tender. Another person who had placed a tender has reported to one of the Directors’ (Anusha) that he heard Gregory boasting that he got the job due to insider information from his wife. He said, “I had direct access to all the tenders; I read them and doctored my tender to be better than the others.” The board is disappointed and angry with Felicia and has confronted her about the situation and the possible breach of several duties of directors. Felicia responded that she is not one of the directors and therefore cannot be in breach of directors’ duties. She also denies providing any privileged information to her partner Gregory. She mentioned that she informed him about the tender the same way she informed others, but she did not provide him with inside information. The premise was eventually fumigated, and this appeared to resolve the problem. Three months after the fumigation, customers have reported seeing rat droppings in their bread. The business is having to shut down, and the board is worried about its ability to meet its credit obligations. Already they have overdue taxes that the company cannot pay. Emily offered to settle all the outstanding obligations and suggested that TPL should go into the pesticide business. She advised that the current business location be split in two - one side for confectionaries, the other for the pesticide business. She said, from her experience of over 15 years as a scientist, “rats are rarely found in premises running pesticide business”. The plan is that after about 6 months, the confectionary business would recommence operations, and that by then, the rat problem will be history. The board is worried about investing in another business at a time when they are struggling with meeting their financial obligations. The board deliberated on the business idea for a long time and based on Emily’s expert opinion and persuasiveness, they decided to take on the risk. It’s now six  months since they began running the pesticide business and unfortunately, it is not yielding meaningful returns. For the last five months, they have been unable to pay Clean Pesticide Pty Ltd (CPP) the agreed payments for monthly supplies of raw materials. CPP has threatened to bring an action against the directors for insolvent trading.

 


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