Person G, director of company K, opened her own company SA and used the employees, premises, customer relationships, credits of K to the advantage of S. In return K paid merely 1 percent of SA’ total sales to K. To find: Breach of fiduciary duties by G in the given case.

Question

homas Persson and Jon Nokes founded Smart Inventions, Inc., to market household consumer products. The success of their first product, the Smart Mop, continued with later products, which were sold through infomercials and other means. Persson and Nokes were the firm’s officers and equal shareholders. Persson was responsible for product development, and Nokes was in charge of day-to-day operations. In time, they became dissatisfied with each other’s efforts. Nokes represented the firm as financially “dying,” “in a grim state, . . . worse than ever,” and offered to buy all of Persson’s shares for $1.6 million. Persson accepted.On the day that they signed the agreement to transfer the shares, Smart Inventions began marketing a new product—the Tap Light. It was an instant success, generating millions of dollars in revenues. In negotiating with Persson, Nokes had intentionally kept the Tap Light a secret. Persson sued Smart Inventions, asserting fraud and other claims. Under what principle…

Answer 1

Question

Chapter 18, Problem 4BCP

Summary Introduction

Case summary: Person G, director of company K, opened her own company SA and used the employees, premises, customer relationships, credits of K to the advantage of S. In return K paid merely 1 percent of SA’ total sales to K.

To find: Breach of fiduciary duties by G in the given case.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Students have asked these similar questions

homas Persson and Jon Nokes founded Smart Inventions, Inc., to market household consumer products. The success of their first product, the Smart Mop, continued with later products, which were sold through infomercials and other means. Persson and Nokes were the firm’s officers and equal shareholders. Persson was responsible for product development, and Nokes was in charge of day-to-day operations. In time, they became dissatisfied with each other’s efforts. Nokes represented the firm as financially “dying,” “in a grim state, . . . worse than ever,” and offered to buy all of Persson’s shares for $1.6 million. Persson accepted.On the day that they signed the agreement to transfer the shares, Smart Inventions began marketing a new product—the Tap Light. It was an instant success, generating millions of dollars in revenues. In negotiating with Persson, Nokes had intentionally kept the Tap Light a secret. Persson sued Smart Inventions, asserting fraud and other claims. Under what principle…

Duties and Liabilities of Corporate Directors Discuss the extent to which a director should be held liable for breaching his or her duty of care if he or she simply neglects to read materials regarding issues to be voted on at board meetings or neglects to show up for these meetings. 2. Should such a person be equally or less liable than a director who knowingly votes to approve an illegal or harmful act?

Is the rule that franchisors are not liable for the torts of a franchisee fair?