There is an article for those that wish to source it "The role...

There is an article for those that wish to source it "The role of caretaker directors in Australia" by Philip Clacher.

This is purely my interpretation of the article, the cases examined and whether there is possible similarities to our situation, and is not legal advice in any way. But it is an interesting read for those who are interested.

In summary it examines the concept of "caretaker directors", in relation to three cases: the first in supreme court of Western Australia; "Woonda Nominees Pty Ltd v Chug (2000); following from other Australian decisions "Paringa Mining Co plc v North Flinders Mines Ltd (1988) and a new zealand case "Utilicorp NZ Inc v Power New Zealand Ltd (1997).

The article means to discuss these rulings in relation to what a director of a takeover target company can legitimately do to block the process and the law which limits the actions directors can take in such circumstances.

In the summary "what are caretaker directors precluded from doing" is goes on to discuss that decisions can not be made which is fundamental or significant.
Including:
- The approval of a placement of shares which will alter the power balance between two significant blocks of shareholders at a shareholder meeting, although neither is a controlling shareholder (Woonda).
- Accepting an offer to sell a strategic parcel of shares held by the company (Utilicorp).
- When under take-over offer, making a counter offer for the shares (Paringa).
- Using a management agreement which will deprive an incoming director to manage the company.

These principles are applicable to only the referenced cases and not a suggestion that GXN has entered into similar scenarios.

The article does further state that actions by directors are limited in certain circumstances; and that the circumstances when these principles can and will be applied is still expanding and developing in Australian law.

It would be an interesting debate to see whether the decisions by GXN to issue and SPP prior to the s249 are allowed under the existing circumstances, and what the actual justification of issuing the SPP at such time was.

As mentioned I am not offering a legal opinion, but would be interested to hear responses from anyone with such knowledge or that may be able to discuss the issues further, and whether any such principles may be relevant to our company.

Is anyone aware of any specific guidelines issued by ASIC relating to these circumstances?