Write a detailed Legal office memorandum

Write a detailed Legal office memorandum

Write a detailed Legal office memorandum. LulLaBy is the holding company of a conglomerate whose shares have been listed on the ASX since 2008. Luna Billy, the managing director of LulLaBy, is on the verge of retirement and has been engage din negotiation s to finalize a deal that, if  ,may significantly increase LulLaBy’s share price before her retirement. The deal involves an infrastructure investment in fiber optic cables and multi-year continuous maintenance contract in the national broad band network(NBN).Once installed, NBN will significantly increase internet connection speed-which is currently relying on dated DSL/ADSL technology. The investment requires a significant financial out lay and it is unclear at this point whether LulLaBy has the necessary resources to do so.

Inspite of this uncertainty, LulLaBy, under Luna’s leadership, finalizes the deal in February 2017.LulLaBy advertises the successful deal and the fact that they will be providing fast, reliable internet to the country. Yet, the company carefully refrains from disclosing to the market the extent of the financial commitment.

By August 2017, LulLaBy is having difficulty meeting its financial commitments under the contract, and in lieu of payment, it issues 6 million AUD worth of shares to the infrastructure company. Luna then retires in November 2017 with a dreamy retirement package and with pride in having been the architect of the deal. The retirement package amounts to a payout of over $3 million including share options and she remains eligible to receive another $1.5 million as a member of a defined benefits pension scheme.

In February 2018, the share prices of Lullaby starts to decline as rumours spread. It now becomes impossible for the company to hide the heavy financial burden it committed itself into and that it issued shares to the infrastructure company.

One day, Luna wakes up to a newspaper article about herself that gives details about her retirement package including the share options. The article blames her for the current sharp decline in the share price of the company, questions the retirement package she received and claims that she carelessly pushed the company into this deal to receive such a generous retirement package.

Luna rushes to your law firm to seek advice as to whether she was in breach provisions of the Corporations Act 2001 (Cth) from 2016 until her retirement from LulLaBy. The managing partner of the law firm tasked your department to write the Memorandum of Advice to Ms Billy,


referring to relevant provisions of the Corporations Act 2001 (Cth);recent cases; relevant law review articles and focusing on the following areas:

  1. Potential breaches of her duties as director;and
  2. Potential breaches of disclosure provisions;and
  3. Whether there are possible defences available to her to protect her against personal liability.

The managing partner has formed a separate team specifically working on potential liability relating to insolvent trading provisions. Hence, you are advised not to spend time on insolvent trading provisions.

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legal office memorandum