September 2014 Vicki
On 1 September 2014 Vicki was appointed liquidator of Revitup Pty Ltd in a creditors’ voluntary winding up. Revitup Pty Ltd is a company which sells imported motorcycles.
The sole director of Revitup Pty Ltd is Max. Vicki has discovered that on 3 February 2014, the company had entered into a transaction with Bad Bike Hire Pty Ltd (BBH) under which Revitup sold 20 motorcycles to BBH which then leased them out on three year terms to customers.
The motorcycles were sold to BBH at 40% of their retail value. Vicki discovers that all of the shares in BBH were owned by Max’s wife Cheryl, who is also a director of BBH.
When asked about the transactions, both Max and Cheryl explain that they were sold cheaply because the market was very slow at the time and there should be a discount for buying 20 motorcycles. Vicki’s investigation reveals that this explanation is not true.
There have been no proper accounting records kept for Revitup Pty Ltd since December 2013. The company’s bank also advised in January 2014 in writing that it was not prepared to lend any further funds until significant amounts of the debt owed to the bank was repaid.
Advise Vicki as to whether she can make a claim against BBH (DO NOT discuss defences or remedies in your answer)
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