QUESTION: Gerry Toomey is a director and chairperson of Anthrax Ltd, an airline company operating out of Hervey Bay. Anthrax Ltd provides air transport to Fraser Island and joy flights around the...

QUESTION:


Gerry Toomey is a director and chairperson of Anthrax Ltd, an airline company operating out of Hervey Bay. Anthrax Ltd provides air transport to Fraser Island and joy flights around the Fraser Coast. Gerry is also the majority shareholder in Virgin Bush Pty Ltd, a management consultancy, which provides advice to tourism enterprises and operates out of Brisbane.
Anthrax Ltd has met with hard times due to a slump in overseas and domestic visitors to the Fraser Coast. Global market forces suggest that a further downturn in the market is imminent and recovery will be slow. The directors of Anthrax Ltd believe that a restructure is necessary and are aware that this will mean job losses. The board has called for expressions of interest from businesses specialising in management strategies.


At the last directors’ meeting two expressions of interest from management companies were tabled and discussed. Gerry gave particular attention to the documentation supplied by Virgin Bush Pty Ltd and emphasised the company’s stated experience in tourism and in redundancy planning and implementation. A resolution was passed, on which all directors present voted, to engage Virgin Bush Pty Ltd for the planning and implementation of the restructure.


Last week, one of the other directors of Anthrax Ltd, Frieda Frenzy, learned from a colleague in Brisbane that Gerry Toomey is a major shareholder in Virgin Bush Pty Ltd.
Frieda is alarmed and angry that the board has been unaware of Gerry’s involvement with that company.


Frieda comes to you for advice as to what action can be taken against Gerry.
Advise Frieda.


ASSESSMENT CRITERIA


As noted in the course outline and further explained above the assessment criteria for this assessment task are:
1.    Demonstration of knowledge of the law, as evidenced by accurate statement of relevant legal principles
2.    Demonstration of understanding of the law as evidenced by cogent and coherent application of legal principles to the facts; and
3.    Demonstration of requisite academic communication skills, as evidenced by logical structure of arguments, appropriateness of conclusions, accuracy of referencing and use of appropriate expression.