Florid Flicks Pty Ltd is a company that produces various artworks in print and other media. The company has three shareholders Mick, Muldoon and Kim who each have an equal number of voting shares. The company has two directors Mick and Muldoon.
The company owns some beautiful drawings (‘the drawings”) prepared by Sarah a well know artist which have a commercial value of $250,000.
Florid Flicks Pty Ltd is having a cash flow problem and the company’s record keeping has been poor.
One of the directors Mick thinks everything will be all right eventually and keeps commissioning new products for sale but is paying ongoing expenses of the company out of money previously put aside to meet income tax and GST payments.
The other director Muldoon takes no steps to monitor the company’s position and is unaware of Mick paying expenses out of money set aside for tax payments.
Mick ponders that if Florid Flicks Pty Ltd fails then the liquidator would end up with Sarah’s drawings. Mick and Muldoon pass a directors’ resolution donating the drawings to the National Museum.
Mick and Muldoon decide to convene a members’ meeting whereby they pass a resolution ratifying the donation to the National Museum. Kim votes against the resolution.
Kim is also employed full time by Florid Flicks Pty Ltd as the Gallery Manager. In her position as Gallery Manager Kim constantly talks to various artists about new artworks and exhibitions. Recently she has been talking to Sarah about her fears for the future of Florid Flicks Pty Ltd and Sarah has agreed to provide all her future artwork exclusively to a new company Kim has just formed called Thursday Night Lights Pty Ltd
Have Mick or Muldoon or Kim contravened any of the statutory duties imposed upon them by the Corporations Act or any corresponding general law duty?