1. Liability of directors of the parent and lenders as "shadow directors". Problems that arise from the appointment of nominee directors. Vicarious liability of the parent corporation. Piercing the veil jurisprudence. ASIC deeds of cross guarantee. Reform proposals by the Companies and Securities Advisory Committee including: the option to form a consolidated group for wholly owned subsidiaries; part removal of directors duties for partly owned subsidiaries; nominee directors; pooling orders; and contribution orders.

Objectives

On completion of this subject, students should 1) understand the legal problem posed by corporate groups; 2) understand the different 'players' or constituencies in a corporate group; 3) be able to advise a hypothetical minority shareholder or unsecured creditor of the likely success in bringing a claim in respect of particular governance practices within the group; 4) be able to advise a hypothetical parent company or financial lender as to the risks of liability for certain governance practices within the group; 5) understand the weaknesses of the current legal regime; 6) understand how the proposals for reform will alter the current law and the impact of the proposals for reform on each constituency; 7) have an appreciation of the different way that other countries approach similar governance issues in corporate groups; 8) develop and demonstrate oral communication skills and skills of presentation of legal concepts, rules and argument in an interactive seminar context; and 9) develop and demonstrate legal research and writing and legal argument skills.

Assessment

Research paper (7000 words): 90%
participation in class discussion: 10%

Contact hours

25 hours over 1 week

Prerequisites

Law 4171 or equivalent