Fabio, Donatella and Georgio (the trio) create a new fragrance called Un Fire which is...
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Fabio, Donatella and Georgio (the trio) create a new fragrance called Un Fire which is scientifically proven to improve communications skills with the opposite sex. The trio established a company called Fabdoge Pty Ltd (Fabdoge) and were named as the only directors of the company. One week before the company was registered with ASIC, the trio sold all the rights to Un Fire to Fabdoge (by pre-incorporation contract) for $3,000,000. Immediately after registration, the transaction was disclosed to and approved by all three directors. It had cost the trio $100,000 to create the fragrance. The market value of the fragrance has been valued at $1,000,000.
Which of the following statements is correct?
a.
The sale may be rescinded because the trio made a personal gain from the sale of Un Fire to Fabdoge
b.
The sale is valid because the trio are not promoters as defined at common law and therefore do not owe any fiduciary duties to Fabdoge
c.
The sale is valid because the trio at all times acted honestly and disclosed their interests in the transaction to Fabdoge
d.
The sale may be rescinded because the trio did not disclose their interest in the transaction to an independent board of directors
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