Bus 307 Case Study 2 Guidelines And Rubric

Bus 307 Case Study 2 Guidelines And Rubric For This Case Study Cra

Craft a professional memo, appropriate in format, tone, and content, to send to your clients Fred and Sally, with your preliminary thoughts on the issues within. Your memo should illustrate the issues and relevant law, apply the facts, and support your conclusions with regard to each issue.

Identify the legal defenses Fred and Sally might raise concerning the checks Jane wrote to Don, and analyze whether these defenses are likely to be successful.

Determine the legal defenses Fred and Sally might raise regarding the check written by Jane and delivered to the church, and analyze their potential success.

Assess the civil claims Fred and Sally have against Jane based on her actions, and evaluate the likelihood of success of these claims.

Analyze the forms of bankruptcy available to the business, considering the business's legal structure, and recommend the most appropriate option with reasoning.

Examine the impact of a potential bankruptcy on the business assets, detailing which assets may be subject to forced sales, liens, or forfeiture.

Discuss the implications of a bankruptcy on the personal assets of the owners, including whether they could be subject to forced sale, liens, or forfeiture.

Evaluate Fred’s legal options against Bob for infringement of intellectual property rights, and assess the likelihood of success with supporting reasoning.

Paper For Above instruction

Introduction

The successful launch of Fred’s Miracle Cough Syrup has brought numerous legal and financial challenges that require careful legal analysis. This memo addresses critical issues including potential defenses related to Jane’s fraudulent activities, civil claims against her, potential bankruptcy options for the business, implications of bankruptcy on both business and personal assets, and intellectual property concerns related to Bob’s infringement.

Legal Defenses Concerning Checks Written to Don

Jane’s issuance of checks to Don, a local loan shark, raises questions about their legitimacy and the defenses Fred and Sally could raise. Typically, defenses might include lack of authorization or forged signatures. Since Sally and Fred are the only authorized signatories, any checks forged or signed without their approval highlight a breach of agency or employment law. Under the doctrine of "unauthorized signatures," Fred and Sally could argue these checks are invalid because they did not authorize Jane’s actions. However, if Jane was acting within her apparent authority as a business employee, a court might find the checks valid unless they can establish actual unauthorized conduct. Therefore, Fred and Sally's success hinges on proving the absence of their authority and demonstrating forgery or lack of consent, which seems likely given the forgery allegations.

Legal Defenses Concerning the Check Delivered to the Church

The check Jane delivered to the church, intended to hide her embezzlement, is another focal point. Since the check was forged or issued without proper authorization, Fred and Sally could argue that it is invalid and does not constitute a valid payment. The legal principle of forged signatures limits liability for the company because the amount was not properly authorized. Additionally, since the check was made out to "Cash," it was essentially a clandestine transaction, further undermining its validity as an official company payment. Despite this, if the church received the check in good faith, there could be arguments about whether the church's reliance on the check affected its validity. Nonetheless, the lack of proper authorization and forgery generally favor Fred and Sally's position.

Civil Claims Against Jane

Fred and Sally have strong civil claims against Jane, primarily for breach of fiduciary duty, embezzlement, and conversion. Embezzlement involves the unlawful taking of funds entrusted to her in her role. Given her actions—writing checks to Don, forging signatures, and cashing a check at church—she has committed fraud and conversion. These actions breach her duty of loyalty and good faith to the company. The success of these claims depends on the availability of evidence, such as bank records and forgery traces. Given the detailed misconduct, it is likely Fred and Sally would succeed in recovering damages through civil litigation.

Bankruptcy Options for the Business

The business, structured as a corporation (implied from the context), has several bankruptcy options, including Chapter 7 (liquidation), Chapter 11 (reorganization), and Chapter 13 (individual debt adjustment). Chapter 7 is appropriate if the business lacks sustainable income, leading to liquidation of assets to satisfy creditors. Chapter 11 allows the business to restructure debts and continue operations, which might be preferable given the value of Fred's Miracle Cough Syrup and ongoing contracts. Considering the current financial distress and potential asset value, Chapter 11 is likely the most appropriate, as it provides a pathway to reorganize and preserve the business.

Implications of Bankruptcy on Business Assets

In bankruptcy, the business assets are subject to creditor claims. Under Chapter 11, assets are kept under the control of the court during reorganization, but certain assets could be liquidated to satisfy debts. Secured creditors with liens on property—such as the warehouse or equipment—may have their liens enforced, leading to forced sales. Unsecured creditors, like suppliers or lenders without collateral, may receive a pro-rata share of remaining assets. Additionally, intellectual property such as patents and trademarks may be deemed assets of the estate, potentially subject to liquidation or licensing. The consequences are that assets vital to operations could be sold or collateralized to pay off creditors, though some assets might be preserved for future viability of the enterprise.

Implications for Personal Assets of Family Members

In a corporation, the personal assets of owners typically are protected from business liabilities. However, if the business is solvent and the owners have personally guaranteed loans or debts, then personal assets could be seized in bankruptcy proceedings. For Fred, Sally, Sam, and Lilly, unless personally guaranteeing the business debts, their personal assets—such as homes, savings, or autos—are likely protected from forced sale in business bankruptcy under the corporate veil. Nonetheless, if fraudulent or illegal activities, like Jane’s embezzlement or misappropriation, lead to personal liability, creditors or courts could potentially pierce the corporate veil, exposing personal assets to claims. Given the context, personal assets are likely shielded unless personal guarantees or fraudulent conduct is proven.

Legal Recourse Against Bob for IP Infringement

Fred has viable legal recourse against Bob for infringing on intellectual property rights—specifically patents and trademarks associated with Fred's Miracle Cough Syrup. Under patent law (35 U.S.C.), patent holders can sue for infringement if another party makes, uses, or sells the patented invention without permission. Similarly, trademark law (Lanham Act) provides grounds for action against unfair competition or trademark infringement, especially if Bob posted the recipe online, potentially misappropriating protected trade secrets or proprietary information.

Fred’s success in litigation depends on establishing ownership of the IP rights and demonstrating that Bob's actions constitute infringement. Given Bob reverse-engineered the recipe and made it publicly available, Fred might argue that Bob violated trade secret protections if the recipe was kept confidential, or that Bob infringed patents if such protections exist. Courts tend to favor IP holders when infringement is clear, and damages or injunctions can be issued to prevent further misuse. Overall, Fred has a strong basis for legal action, and success depends on the strength of the underlying IP protections and the specific infringement details.

Conclusion

The legal landscape surrounding Fred and Sally’s business is complex, involving issues related to forgery, embezzlement, civil liability, bankruptcy, and intellectual property rights. Their best course of action involves fortifying legal defenses, pursuing civil claims against Jane, selecting a reorganization bankruptcy such as Chapter 11, and enforcing their IP rights against Bob. Due diligence and strategic legal counsel are essential to navigating these multifaceted challenges effectively and safeguarding both their business and personal assets.

References

• Clarke, T. (2020). Business Law: Principles and Practice. Academic Press.
• Fox, M. (2021). Intellectual Property Law and Practice. Oxford University Press.
• Ginsburg, J. C., & Dykstra, D. (2019). Bankruptcy Law Manual. LexisNexis.
• Johnson, R. (2022). Corporate Law and Practice. West Publishing.
• Klein, P. (2018). Trade Secrets and Business Competition. Harvard Law Review.
• Martin, S. (2020). Legal Aspects of Business Transactions. Thomson Reuters.
• Thomas, A. (2023). Bankruptcy Fundamentals. American Bar Association Publishing.
• Watson, H. (2021). Intellectual Property Rights Protection. Stanford Law Review.
• Zaid, S. (2019). Consumer and Business Law. Routledge.
• Young, D. (2022). Legal Strategies for Small Businesses. Sage Publications.