Due 11:59 pm Friday
Discussion Question 1 – Piercing Corporate Veil
Answer essay question 2 on page 837 (6th Edition) incorporating legal terms and concepts to support your analysis.
In this case of John and Thelma holding Michael personally liable and PIERCE THE CORPORATE VEIL for not delivering the mobile home they purchased, yes. After being INCORPORATED with Erin Holmes Inc. for 8 years you would think they would have held more than one meeting. Michael FAILED TO OBSERVE FORMALITIES and thus was not acting like a corporation.
Discussion Question 2- Corporate Management
Answer question 4 on page 861 (6th Edition) incorporating legal terms and concepts to support your analysis.
In this case the Signal board is protected by THE BUSINESS JUDGEMENT RULE. The board of directors acted in the DUTY OF CARE and did what was in best interests of the corporation in which the corporation benefitted from greatly. Although the SHAREHOLDERS did not agree, this was a RATIONAL BUSINESS PURPOSE.
Discussion Question 3 – Shareholders
Chapter 35 discusses many concepts related to shareholders that you’ve probably heard in sound bites on the news. The concepts, however, are more important than mere sound bites as the ramifications for corporations, shareholder, and our economy are significant. As the intro to the Chapter illustrates, everyone is all too familiar with the rise and fall of Enron. Unfortunately, Enron is not the only corporation with management, shareholder, and earnings troubles.
Choose ONE of the following to discuss in class:
C. Discuss Question 3 on page 889 (6th Edition) using legal concepts and applicable case law from the chapter.
This one was a little tricky for me. But especially since they were fighting for management for control of the company, I would see some red flags. The fact that they own another corporation that competes with Bruce sends even more red flags. In this situation I don’t feel that the Gilberts are