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DEVRY MGMT 597 Week 6 Homework Assignment

DEVRY MGMT 597 Week 6 Homework Assignment (2 Sets) NEW

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36.11 Business Ethics John A. Goodman was a real estate salesman in the state of Washington. Goodman sold to Darden, Doman & Stafford Associates (DDS), a general partnership, an apartment building that needed extensive renovation. Goodman represented that he personally had experience in renovation work. During the course of negotiations on a renovation contract, Goodman informed the managing partner of DDS that he would be forming a corporation to do the work. A contract was executed in August between DDS and "Building Design and Development (In Formation), John A. Goodman, President." The contract required the renovation work to be completed by October 15. Goodman immediately subcontracted the work, but the renovation was not completed on time. DDS also found that the work that was completed was of poor quality. Goodman did not file the articles of incorporation for his new corporation until November 1. The partners of DDS sued Goodman to hold him liable for the renovation contracts. Goodman denied personal liability. Was it ethical for Goodman to deny liability? Is Goodman personally liable? Goodman v. Darden, Doman & Stafford Associates, 100 Wn.2d 476, 670 P.2d 648, Web 1983 Wash. Lexis 1776 (Supreme Court of Washington)

37.5 Dividends Gay &'s Super Markets, Inc. (Super Markets), was a corporation formed under the laws of the state of Maine. Hannaford Bros. Company held 51 percent of the corporation &'s common stock. Lawrence F. Gay and his brother Carrol were both minority shareholders in Super Markets. Lawrence Gay was also the manager of the corporation &'s store at Machias, Maine. One day, he was dismissed from his job. At the meeting of Super Markets &'s board of directors, a decision was made not to declare a stock dividend for the prior year. The directors cited expected losses from increased competition and the expense of opening a new store as reasons for not paying a dividend. Lawrence Gay claims that the reason for not paying a dividend was to force him to sell his shares in Super Markets. Lawrence sued to force the corporation to declare a dividend. Who wins? Gay v. Gay &'s Super Markets, Inc., 343 A.2d 577, Web 1975 Me. Lexis 391 (Supreme Judicial Court of Maine)

37.7 Duty of Loyalty Lawrence Gaffney was the president and general manager of Ideal Tape Company (Ideal). Ideal, which was a subsidiary of Chelsea Industries, Inc. (Chelsea), was engaged in the business of manufacturing pressure-sensitive tape. Gaffney recruited three other Ideal executives to join him in starting a tape manufacturing business. The four men remained at Ideal for the two years it took them to plan the new enterprise. During this time, they used their positions at Ideal to travel around the country to gather business ideas, recruit potential customers, and purchase equipment for their business. At no time did they reveal to Chelsea their intention to open a competing business. The new business was incorporated as Action Manufacturing Company (Action). When executives at Chelsea discovered the existence of the new venture, Gaffney and the others resigned from Chelsea. Chelsea sued them for damages. Who wins? Chelsea Industries, Inc. v. Gaffney, 389 Mass. 1, 449 N.E.2d 320,Web 1983 Mass. Lexis 1413 (Supreme Judicial Court of Massachusetts)

39.9 Duty of Loyalty Ally is a member and a manager of a manager-managed limited liability company called Movers & You, LLC, a moving company. The main business of Movers & You, LLC, is moving large corporations from old office space to new office space in other buildings. After Ally has been a member-manager of Movers & You, LLC, for several years, she decides to join her friend Lana and form another LLC, called Lana & Me, LLC. This new LLC provides moving services that move large corporations from old office space to new office space. Ally becomes a member-manager of Lana & Me, LLC, while retaining her member-manager position at Movers & You, LLC. Ally does not disclose her new position at Lana & Me, LLC, to the other members or managers of Movers & You, LLC. Several years later, the other members of Movers & You, LLC, discover Ally's other ownership and management position at Lana & Me, LLC. Movers & You, LLC, sues Ally to recover damages for her working for Lana & Me, LLC. Is Ally liable?