Tutorial 7 LAWS3100 Amy Wang T08 44860123
1a) Have any of the directors breached their statutory duty to prevent insolvent trading by
JV Investor?
S588G:
1) Application
This section applies if:
a) A person is a director of a company at the time when the company incurs a debt;
and
b) The company is insolvent at that time, or becomes insolvent by incurring that debt,
or by incurring at that time debts including that debt; and
c) At the time, there are reasonable grounds for suspecting that the company is
insolvent, or would so become insolvent, as the case may be; and
d) That time is at or after the commencement of this Act
2) Failure to prevent incurring of debt
By failing to prevent the company from incurring debt, the person contravenes this section
if:
a) The person is aware at that time that there are such grounds for so suspecting; or
b) A reasonable person would in a like position in a company in the company’s
circumstances would be so aware
3) A person commits an offence if:
(a) a company incurs a debt at a particular time; and
