Mr. Pacman filed a collection action against “PDP” Corporation. Upon execution of the court’s decision, “PDP” Corporation was found to be without assets. Thereafter Mr.Pacman filed an action against its present and past stockholder “Laban” Corporation which owned substantially all of the stocks of “PDP” Corporation. The two corporations have the same board of directors and “Laban” Corporation financed the operations of “PDP” Corporation. May “Laban” Corporation be held liable for the debts of “PDP” Corporation? Why?
Mr. Pacman filed a collection action against “PDP” Corporation. Upon execution of the court’s decision, “PDP” Corporation was found to be without assets. Thereafter Mr.Pacman filed an action against its present and past stockholder “Laban” Corporation which owned substantially all of the stocks of “PDP” Corporation. The two corporations have the same board of directors and “Laban” Corporation financed the operations of “PDP” Corporation. May “Laban” Corporation be held liable for the debts of “PDP” Corporation? Why?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mr. Pacman filed a collection action against “PDP” Corporation. Upon execution of the court’s decision, “PDP” Corporation was found to be without assets. Thereafter Mr.Pacman filed an action against its present and past stockholder “Laban” Corporation which owned substantially all of the stocks of “PDP” Corporation. The two corporations have the same board of directors and “Laban”
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