guys seriously, forget about it, write it off against profits. the coy is now subject to a deed of company arrangement so there will be NO examination of the conduct of directors. As for trading whilst insolvent, please, go read the corps act, the section is 588G. Funny thing is, it's not against the law to rip off shareholders!
and here's some icing on the cake......
Directors face ASIC after 'culpable' judgment ELISABETH SEXTON March 4, 2010 .
A NSW Supreme Court judge has referred two directors to the corporate regulator after finding their conduct "gross", "culpable" and "dishonest" in a damages claim brought by their company after they left its board.
Justice Robert McDougall found in December that Leon Carr and Nigel Purves had committed ''numerous breaches of their statutory and general law obligations'' as directors of Resource Equities, an unlisted public company registered as a pooled development fund.
Mr Carr, an executive director of the listed cancer-treatment company Fermiscan, which went into administration in November, and Mr Purves, a would-be rescuer of Elderslie Finance after its 2008 collapse and a former chief executive of listed companies Kinetic Power and Cosmos (now Corum Group), have links going back to at least the mid-1990s when they were fellow directors of Auschina Corp (now RIMCapital).
Justice McDougall also found that when the pair were on the board of Resource Equities in 2003 and 2004, they overpaid themselves $368,000 as directors ''in total disregard'' of their duties, inappropriately lent $358,000 unsecured to an associate, and lost $682,000 after providing $2.5 million to a technology company in order to benefit Cosmos, of which Mr Purves was a director and Mr Carr an investment adviser.
It was not appropriate for the matter to finish with his orders that Mr Carr and Mr Purves must compensate Resource Equities $2.3 million, the judge said.
There was ''a significant public interest'' in referring his judgment to the Australian Securities and Investments Commission, he said.
It is understood the commission is examining the judgment.
In a subsequent ruling published this week, the judge made an uncommon award of so-called ''indemnity'' costs against Mr Carr and Mr Purves because they had fabricated evidence on a ''vital part'' of the case.
''Although I accept that the fabrication of evidence ? does not extend to the whole of the claim, it should not be forgotten that I was deeply unimpressed by Mr Carr and Mr Purves as witnesses,'' Justice McDougall said.
Mr Carr was a director of Resource Equities from January 2001 to November 2004, and Mr Purves from May 2003 to November 2004.
The judge found the company
went into administration in 2005 as a ''direct result'' of their actions in paying dividends beyond profits, including to payments that also threatened the company's registration as a pooled development fund.
Resource Equities returned to normal trading in October 2007 when a deed of company arrangement expired.
The judge said the pair ''concocted a scheme to justify payments to themselves well in excess of their entitlements'' and improperly backed a proposal for Resource Equities to give funds to Fox Technology, a then cash-strapped partner in eftpos technology with Cosmos.
''On any rational analysis, the proposal ? was one whereby Resource Equities would bear all the risk of investment and Cosmos would derive substantially the whole of any benefit,'' Justice McDougall said.
Mr Purves was a director of both companies at the time and the judge inferred that ''Mr Carr was motivated by a desire to gain, for himself or a company controlled by him, a very substantial reward for arranging the listing of Fox.
''In relation to the Fox transaction ? I conclude the actions of each of them were marked by conspicuous dishonesty, having regard in particular to their conflicts of duty (or duty and interest),'' the judge said.
FER Price at posting:
3.0¢ Sentiment: Buy Disclosure: Held
