Fiddelsticks Ltd is an entertainment company. It organises live events. The company's revenue comes from sales of tickets, merchandise and selling films of the events to Pay TV and steaming services. The company's shares are listed on the ASX. The company was profitable until 2019. In 2019, the then board of directors collectively. decided to invest most of the working capital of the company into a tour by an unknown. acrobatic troupe, 'Le Cirque de la Vidange". The directors had not viewed the troupe's performance or read any reviews or taken any other action to assess the quality of the troupe's performance. A reading of the board minutes indicates the board may have confused the Vidange troupe with a famous troupe with a similar name. The tour was nearly a disaster for the company. The reviews of the performances were terrible, and the company lost a lot of money but did not become insolvent. The following year the entire board resigned. The current board is now considering suing one of the former directors, Bim. Bim is an actor. He was an independent non-executive director in 2019. He has considerable personal wealth. Required: Advise the current board of directors whether there are grounds to bring legal action against Bim for a breach of directors' duties and the likelihood of a successful outcome.
Fiddelsticks Ltd is an entertainment company. It organises live events. The company's revenue comes from sales of tickets, merchandise and selling films of the events to Pay TV and steaming services. The company's shares are listed on the ASX. The company was profitable until 2019. In 2019, the then board of directors collectively. decided to invest most of the working capital of the company into a tour by an unknown. acrobatic troupe, 'Le Cirque de la Vidange". The directors had not viewed the troupe's performance or read any reviews or taken any other action to assess the quality of the troupe's performance. A reading of the board minutes indicates the board may have confused the Vidange troupe with a famous troupe with a similar name. The tour was nearly a disaster for the company. The reviews of the performances were terrible, and the company lost a lot of money but did not become insolvent. The following year the entire board resigned. The current board is now considering suing one of the former directors, Bim. Bim is an actor. He was an independent non-executive director in 2019. He has considerable personal wealth. Required: Advise the current board of directors whether there are grounds to bring legal action against Bim for a breach of directors' duties and the likelihood of a successful outcome.
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