LLM Company Law coursework
Liam, John and Ming are directors of Sunny Ltd. They hold 30%, 30% and 40% of the shares respectively. Sunny Ltd recently rejects a contract of sale of flour with Flour Ltd as John and Ming say the price of the flour is not suitable for Sunny Ltd. However, Liam finds out that John and Ming later make a profit by entering into the contract of sale of flour with Flour Ltd in their own names. John and Ming have not informed Sunny Ltd regarding their conduct of contracting with Flour Ltd.
Sunny Ltd. is now in compulsory liquidation and its assets amount to £13,200. The creditors have submitted the proofs of debts. The cost of winding up is £10,000 and the interests on all the debts are £6,000. Three employees of Sunny Ltd. are claiming for their unpaid salaries for the last 5 months, each person in total seeks to claim £6,000 respectively. And there are three unsecured creditors who are claiming £1,000, £3,000 and 4,000 respectively.
Liam is not happy with the conduct of John and Ming and he comes to you for advice. He would like you to:
1. advise Liam whether John and Ming have breached any of the statutory directors’ duties;
2. advise the liquidator regarding payments of the claims listed above.
Word count 2500
References and bibliography not included in word count