The June 2010 change to the manner in which dividends were deemed payable shifted the requirement from a measure of profit to a balance sheet-based formula in which dividends were only payable if assets outstripped liabilities, essentially.
This is, according to the facts of the case as presented, the only reason the dividend payment might be considered insolvent trading or otherwise contrary to the legal and financial constraints of the company under current Australian law. As the error was again solely the fault of chief financial officer George, the directors incur no liability in this instance.
Part B
As described above, the board of directors at Hampton Park Pty, Ltd. incurred no liability in this case as they relied on information provided by a competent and informed employee in the person of the company's chief financial officer, George, which legally absolves them of liability in this case.
Whether or not the company ultimately engaged in insolvent trading would require a more careful analysis of financial documents and a deeper knowledge of the facts of the case than are given, but that the directors would not be liable for any insolvent trading is certain and that such trading did not exist at all -- i.e. this does not appear to be a case when dividends were declared at a time when the company could not meet its obligations, but rather it was unable to meet its obligations shortly after paying a dividend (though not as a direct result). As Section 588g of the Australian Corporations Act of 2001, which defines insolvent trading, establishes that dividend payments are to be recorded as debts when they are paid or when they are declared, and with Section...
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