A recent ruling in New Zealand has cast doubt on the extent to which directors can rely on their Directors’ and Officers’ (D&O) liability insurance cover to help fund defence costs. The decision is relevant to all directors of companies who have a single policy covering both defence costs and claims for damages.
In the recent Federal Court decision of ASIC v Healey [2011] FCA 717 Justice John Middleton ruled that Centro’s directors breached the Corporations Act 2001 (Cth) (Act) when they failed to notice significant errors in the 2007 consolidated financial statements of Centro Properties Limited, Centro Property Trust and Centro Retail Trust (CRT) (collectively, Centro).
On 28 June 2010 the Corporations Amendment (Corporations Reporting Reform) Act 2010 came into effect, signalling a shift from the long-standing profits-based test to a new solvency-based test for paying dividends.
It is not uncommon in shareholder disputes involving allegations of oppression under section 232 of the Corporations Act 2001 (Cth) for the aggrieved shareholder to seek to wind up the company as part of a wider strategy seeking a buy-out order.
The case of ASIC v Rich provides us all with some valuable commentary on directors duties and the potential application of the business judgment rule.
On 19 January 2010, in response to perceptions of inflexibility in Australia’s corporate insolvency regime, Chris Bowen, the Minister for Financial Services, Superannuation and Corporate Law, announced a major review of Australia’s insolvency laws.
In a move designed to help directors better understand their statutory duty to prevent insolvent trading, ASIC last week released Consultation Paper 124 – Directors’ duty to prevent insolvent trading: Guide for directors (Consultation Paper).
A recent decision of the New South Wales Supreme Court in the case of ASIC v Somerville & Ors [2009] NSWSC 934, highlights that legal advisors may be personally liable if they give advice in relation to unlawful activities conducted by their clients.
The New South Wales Supreme Court last week imposed penalties against 10 former non-executive and executive directors of James Hardie Industries Limited (JHIL).
Client legal professional privilege lies at the heart of Australia’s legal system. Essentially, it is the principle that confidential communications between a client and a legal advisor should be protected to facilitate honest and open communication between them.