The stock of West End Development Co. was subject to a transfer restriction. This restriction required that any shareholder selling shares first offer every other shareholder the right to purchase a proportion of the shares being sold. The proportions were to be the same as the percentages of the outstanding shares that the other shareholders already owned. This restriction was stated in the articles of incorporation but was not stated on the stock certificate of the corporation. The Taylors owned stock in the company and sold their stock to Vroom, an officer of the corporation, without first offering any stock to the other shareholders, as required by the restriction. The other shareholders brought an action against Vroom to recover from him the percentages of the shares they would have been entitled to if the Taylors had followed the transfer restriction. Decide. [ Irwin v. West End Development Co. , 481 F.2d 34 (10th Cir.)]
> Drehman Paving & Flooring Co. installed a brick floor at Cumberland Farms that its salesman promised would be “just like” another floor Cumberland had installed several years earlier. The bricks in the new floor came loose because Drehman had failed to i
> In 1984, Alexander Tolin executed a will under which the residue of his estate was to be devised to his friend Adair Creaig. The will was prepared by Steven Fine, Tolin ’ s attorney, and executed in Fine ’ s office. Fine retained the original will and ga
> On July 27, 2000, Sheldorado Aluminum Products, Inc., installed an aluminum awning on the back of Marie Villette ’ s home for use as a carport. On January 11, 2001, the awning collapsed on top of Ms. Villette ’ s new Mercedes automobile. Ms. Villette bro
> After watching a male horse owned by Terry and Manita Darby perform at a horse show, Ashley Sheffield contacted the Darbys about buying him. The Darbys assured her that the horse had no problems and would make a good show horse for use in competition. In
> GE Oil & Gas, Inc., is a company that manufactures gas compressors. Berge Helene owns a large barge that it leases to oil companies for purposes of storing and producing petroleum offshore. GE Oil & Gas sold Berge Helene gas compressors that were to be u
> Brianna Kriefall, a child, died after she ate meat at a Sizzler restaurant that was later found to contain E. coli. Her family brought suit against Sizzler USA to recover for the loss of their daughter. Is Sizzler liable for the death? Explain your answe
> A complaint was filed with the U.S. Commerce Department’s ITA by U.S. telephone manufacturers AT&T, Comidial Corp., and Eagle Telephones, Inc., alleging that 12 Asian manufacturers of small business telephones, including the Japanese firms Hitachi, NEC,
> James Jelinek purchased Hytest BMR Sorghum Sudan grass seed, which was produced and marketed by Land O ’ Lakes. Land O ’ Lakes warranted the seed to be free from defects and expressly warranted that by using normal farming practices and proper maintenanc
> The majority shareholder and president of Dunaway Drug Stores, Inc., William B. Dunaway, was structuring and executing the sale of virtually all of the corporation ’ s assets to Eckerd Drug Co. While doing this, he negotiated a side noncompete agreement
> In a January 2000 prospectus for its initial public offering of shares, Apex Oil Discovery Co. (AODC) estimated a sizable volume of oil production based on the studies of two geologists and a test well at one of its Oklahoma properties. A cautionary stat
> G.C. Vincent was an employee of Porter County Development Corporation (PCDC). Vincent had three personal credit cards through Citibank. Vin- cent diverted checks to the PCDC, deposited them into his personal checking account, and issued checks drawn upon
> John Clark purchased a paintball gun at a pawn shop and then participated in a community sport of shooting paintball guns at cars. While John and his friend were riding around their small town with their paintball guns, they spotted Chris and shot his ca
> George Baxter executed a will that left the bulk of his estate to the Church of Christ in New Boston, Texas. Two members of the church served as the witnesses for the will. Is the will valid? [In re Estate of Gordon , 519 S.W.2d 902 (Tex.)]
> Advent purchased ink from Borden. On the labels of the ink drums delivered to Advent, Borden had imprinted in one-sixteenth-inch type in all caps: seller makes no warranty, express or implied, concerning the prod- uct or the merchantability or fitness th
> Andy ’ s Sales (owned by Andy Adams) sold a well-built trampoline to Carl and Shirley Wickers. The Wickerses later sold the trampoline to Herbert Bryant. While using the trampoline, Herbert ’ s 14-year-old nephew, Rex, sustained injuries that left him a
> Jane Jackson purchased a sealed can of Katydids, chocolate-covered pecan caramel candies manufactured by NestlT. Shortly after, Jackson bit into one of the candies and allegedly broke a tooth on a pecan shell embedded in the candy. She filed a complaint,
> Paul Parrino purchased from Dave ’ s Professional Wheelchair Service a wheelchair manufactured by 21st Century Scientific, Inc. The sales brochure from 21st Century Scientific stated that the wheelchair would “serve [the buyer] well for many years to com
> Maria Gonzalez lived in a rental unit with her sons in Queens, New York. The hot water supplied to their apartment was heated by a Morflo water heater, which had a temperature control device on its exterior manufactured by Robertshaw and sold to Morflo.
> Zogarts manufactured and sold a practice device for beginning golfers. According to statements on the package, the device was completely safe, and a player could never be struck by the device ’ s golf ball. Hauter was hit by the ball while using the devi
> Webster ordered a bowl of fish chowder at the Blue Ship Tea Room. She was injured by a fish bone in the chowder, and she sued the tea room for breach of the implied warranty of merchantability. The evidence at trial showed that when chowder is made, the
> Develop a chart for when a seller’s creditors can repossess goods in transit to a buyer.
> Equisure, Inc., was required to file audited financial statements when it applied for a listing on the American Stock Exchange (AMEX). Stirtz, Equi- sure ’ s auditor, issued a favorable audit opinion used for the AMEX application. Stirtz also issued “ cl
> Reebok manufactures and sells fashionable athletic shoes in the United States and abroad. It owns the federally registered Reebok trademark and has registered this trademark in Mexico as well. Nathan Betech is a Mexican citizen residing in San Diego, Cal
> Copenhaver wrote a will in ink, which was found with her other papers in her bedroom at her death. Pencil lines had been drawn through every provision of the will and the signature. There was no evidence as to the circumstances under which this had been
> J. C. Cowdin, a director of Curtis-Wright Co., phoned Robert Gintel, a partner of Cady, Roberts & Co., a stock brokerage house, and advised him that Curtis-Wright ’ s quarterly dividend had been cut. Gintel immediately entered orders selling Curtis- Wrig
> An insurer issued a settlement check on a claim brought by an injured minor that was payable to “ Trudy Avants attorney for minor child Joseph Walton, mother Dolores Carpenter 11762 S. Harrells Ferry Road #E Baton Rouge LA 70816. ” The lawyer indorsed th
> A note from Mark Johnson with HealthCo International as payee for $28,979.15 included the following language: payable in _________, Successive Monthly Installments of $ Each, and in 11 Successive Monthly Installments of $2,414.92 Each thereafter, and in
> William Rubin, president of Tri-State Mining Co., sought a loan from Bankers Trust Co. To secure the loan, he pledged worthless stock in six companies and represented that the stock was worth $1.7 million. He also arranged for fictitious quotations to ap
> Dubois sold Hocking a condominium that included an option to participate in a rental pool arrangement. Hocking elected to participate in the arrangement. Under it, the rental pool ’ s agent rented condominiums, pooled the income, and after deducting a ma
> International Advertising, Inc. (IA), would like to raise $10 million in new capital to open new offices in Eastern Europe. It believes it could raise the capital by selling shares of stock to its directors and executive officers as well as to its bank a
> Mary Dale worked in the law office of Emory Stone, an attorney practicing securities law. While proof- reading Mary ’ s keying of a document relating to the merger of two computer software companies, Emory joked to her, “ If I weren’t so ethical, I could
> Dorozhko hacked into the corporate network of Thomson Financial on October 17, 2007, at 2:15 P . M . and gained access to IMS Health ’ s soon- to-be-released negative earnings announcement due out at 5:00 P . M . He purchased $41,670 worth of put options
> Brown made an offer to purchase Overman’s house on a standard printed form. Underneath Brown’s signature was the statement: “ACCEPTANCE ON REVERSE SIDE.” Overman did not sign the offer on the back but sent Brown a letter accepting the offer. Later, Brown
> The following transactions in Heritage Cosmetics Co., Inc., stock took place: On January 21, Jones, the corporation ’ s vice president of marketing, pur- chased 1,000 shares of stock at $25 per share. On January 24, Sylvan, a local banker and director of
> Minnesota Prostate Research Labs, Inc. (MPRL), made an initial public offering of its shares in August 1998. It stated in its prospectus that research on laboratory animals indicated that the lab may have discovered a cure for prostate cancer in humans.
> Business Week magazine is sent to a national distributor of magazines, Curtis Circulations Co., which sells the magazines to various wholesalers, including Hudson News. Business Week publishes a column entitled “ Inside Wall Street, ” and the evidence sh
> Corporation A was involved in merger discussions with Corporation B. During this time, Corporation A made public statements denying that any merger negotiations were taking place or that it knew of any corporate developments that would account for heavy
> The Official Comment to § 3-420 states that delivery of an instrument occurs when it “comes into the payee’s possession, as for example when it is put into the payee’s mailbox.” Constructive delivery had occurred with the delivery to the mailbox. While C
> Lawrence D. Polizzotto, a former vice president at First Solar Inc., spoke in one-on-one phone calls with some analysts and investors. He stated that the company was unlikely to receive a much-anticipated loan guarantee from the U.S. Department of Energy
> Birt was a hospital patient. The doctor who treated him was a shareholder of a professional corporation organized under the Indiana Medical Professional Corporation Act. Birt claimed that the doctor who treated him was guilty of malpractice, and he sued
> Linhart owned shares of stock in First National Bank. She borrowed money from the bank and pledged the stock as security. She later decided to transfer 70 head of cattle and the shares of stock to her son, but she could not deliver the share certificate
> On March 3, 2002, pursuant to a public offering, First All State Trucking Corp. (FAST) issued securities to investors in denominations of $1,000. The interest rate was 7 percent per year payable semiannually, and the maturity date was March 3, 2010. The
> Ibanez owned shares of stock in Farmers Underwriters. He left the stock certificate lying on top of his desk in his office. Many persons continually passed through the office, and one day Ibanez realized that someone had taken the certificate from the to
> Ed Klein was the sole shareholder, director, and chief executive officer of The Gun Exchange, Inc., a retail firearms dealership. The inventory of The Gun Exchange had been pledged as security for a $622,500 debt owed to InterFirst Bank. It also owed $23
> Bernie and Phil’s Great American Surplus store placed an ad in the Sunday Times stating, “Next Saturday at 8:00 A. M. sharp, 3 brand new mink coats worth $5,000 each will be sold for $500 each! First come, first served.” Marsha Lufklin was first in line
> Gladys Boles and 28 other owners of property at Hidden Valley Lakes Development sued the corporate developer, National Development Co. Inc. (NDC); NDC ’ s parent, Sunstates Corporation; and the individual behind both corporations, Clyde Engle, for breach
> Ken and Charlotte Maschmeier were the majority shareholders of Southside Press; each owned 1,300 shares. Marty and Larry Maschmeier, who each owned 1,200 shares of the corporation, had a falling out with Ken and Charlotte and were terminated as employees
> U.S. Die Casting, Inc., is a closely held Ohio corporation that owns 5 percent of Security First Corporation, a Delaware corporation. David Slyman is the president of U.S. Die and its sole shareholder. The defendant, Security First, entered into a merger
> In January 1998, Allied Capital Partners, L.P., and American Factors Corporation were in the business of factoring accounts receivable for third-party cli- ents. Allied assigned its factoring contract with Complete Design, Inc., to American but retained
> Equivest, a partnership, owned 10,000 shares of Altec International, Inc. Equivest pledged these shares to secure loans by Lloyds Bank. Sometime after pledging the stock, Equivest transferred beneficial ownership of 350 shares of Altec stock to Thorn Hof
> Tomlinson and Hubbard were two of five share- holders in Multimedia Software Distributors, a corporation. The corporation was formed in 1992 and filed for bankruptcy in 1994. In 1996, Tomlinson filed a claim in his own name, alleging that Hubbard had bre
> Six members of the Weston family, who owned 6.8 percent of the stock of Weston Paper and Manufacturing Company, brought suit against three corporate directors and CFIS, a firm hired by the company to make the annual evaluation of the company ’ s stock fo
> Monica Beam, a shareholder of Martha Stewart Living Omnimedia, Inc. (MSO), filed a derivative action against Martha Stewart and the other MSO board of directors, alleging that Stewart breached her duties to MSO by illegally selling ImClone stock and mish
> Ronald Naquin, an employee of Air Engineered Systems & Services, Inc., owned one-third of its outstanding shares. After six years, he was fired and an offer was made to buy out his interest in Air Engineered at a price that Naquin thought inadequate. He
> Siebrecht organized Siebrecht Realty Co., a corporation, and then transferred his building to the corporation in exchange for its stock. The corporation rented different parts of the building to different tenants. Elenkrieg, an employee of one of the ten
> On August 15, 2003, Wilbert Heikkila signed an agreement with Kangas Realty to sell eight parcels of Heikkila’s property. On September 8, 2003, David McLaughlin met with a Kangas agent who drafted McLaughlin’s offer to purchase three of the parcels. McLa
> Sullivan sold t-shirts with the name Boston Marathon and the year of the race imprinted on them. The Boston Athletic Association (BAA) sponsors and administers the Boston Marathon and has used the name Boston Marathon since 1917. The BAA registered the n
> On August 19, 1980, Joan Ioviero injured her hand when she slipped and fell while leaving the dining room at the Hotel Excelsior in Venice, Italy. This hotel was owned by an Italian corporation, Cigahotels, S.p.A. (The designation S.p.A. stands for Socie
> Smith made a contract to sell automatic rifles to a foreign country. Because the sale of such weapons to that country was illegal under an act of Congress, the U.S. government prosecuted Smith for making the contract. He raised the defense that because t
> Adams and two other persons were promoters for a new corporation, Aldrehn Theaters Co. The promoters retained Kridelbaugh to perform legal services in connection with the incorporation of the new business and promised to pay him $1,500. Aldrehn was incor
> The Seabrook Island Property Owners Association, Inc., is a nonprofit corporation organized under state law to maintain streets and open spaces owned by property owners of Seabrook Island. Seabrook Island Co. is the developer of Seabrook Island and has m
> Madison Associates purchased control of the majority of shares of 79 Realty Corp. from the Kimmel- mans and the Zauders, who then resigned as directors. The Alpert group, which owned the remaining 26 percent of 79 Realty refused to sell their shares. Par
> Emmick was a director and shareholder of Colonial Manors, Inc. (CM). He organized another corporation named Oahe Enterprises, Inc. To obtain shares of the Oahe stock, Emmick transferred CM shares arbitrarily valued by him at $19 per share to Oahe. The CM
> The Community Youth Center (CYC) Corporation failed to pay its annual registration fee in 2000 and was automatically dissolved by the state corporation commission. CYC continued to operate and held itself out as a corporation well into 2005 when it obtai
> Richard Ramlall was hired by CloseCall (MD) Inc. to negotiate a billing dispute with Verizon involving some $2 million in asserted overcharges. CloseCall (MD) agreed to a contingent fee “ bonus ” for its negotiators of 10 percent of the refund. The negot
> On January 27, 1982, Joe Walker purchased a wheel- loader machine from Thompson & Green Machinery Co. (T&G). Walker signed a promissory note for $37,886.30 on behalf of “ Music City Sawmill, Inc., by Joe Walker, President. ” When Sawmill was unable to
> Compare and contrast consolidations, mergers, and conglomerates.
> Clinton Investors Company, as landlord, entered into a three-year lease with the Clifton Park Learning Center as tenant. The lease was executed by Bernie Watkins who represented himself as the treasurer of the Learning Center. On May 31, 1984, the day be
> L. B. Foster invited Tie and Track Systems Inc. to submit price quotes on items to be used in a railroad expansion project. Tie and Track responded by e- mail on August 11, 2006, with prices for 9 items of steel ties. The e-mail concluded, “The above pri
> Michael Sykes, the president of Sykes Corp., hired Richard Amelung to handle the company ’ s book- keeping and deal with all of its vendors. Amelung entered into an agreement with East- ern Metal Supply to help reduce Sykes ’ s debt to Eastern. Whenever
> Edwin Edwards and Karen Davis owned EEE, Inc., which owned three convenience stores, all of which sold gasoline. Reid Ellis delivered to the three convenience stores $26,675.02 worth of gasoline for which he was not paid. Ellis proved that Edwards and Da
> William Sullivan was ousted from the presidency of the New England Patriots Football Club, Inc. Later, he borrowed $5,348,000 to buy 100 percent control of the voting shares of the corporation. A condition of the loan was that he reorganize the Patriots
> North Pole, Inc., approved a plan to merge with its subsidiary, Santa ’ s Workshop, Inc. The merger plan provided that certain of Workshop ’ s shareholders would receive $3.50 per share. The highest independent appraisal of the stock was $4.04 per share.
> Peter Kertesz formed an LLC and operated it in South Florida under the business name “ Mourning Flowers. ” The LLC specialized in the sale of flowers to funeral homes. Although Kertesz was initially the only member and manager, he ultimately granted owne
> Ralph and Maureen K. Hagan (collectively Hagan) owned the Stuart Court Apartments in Richmond, Virginia. On April 30, 1994, Hagan executed an agreement with Adams Property Associates, Inc. (Adams), giving Adams the exclusive right to sell the property fo
> Jerome Micco was a major shareholder and corporate officer of Micco and Co., Inc., which was a limited partner in Harbor Creek, Ltd., a limited partnership formed to build a condominium complex. Hommel, an electrical contractor, was the successful bidder
> Hacienda Farms, Ltd., was organized as a limited partnership with Ricardo de Escamilla as the general partner and James L. Russell and H. W. Andrews as limited partners. The partnership raised vegetables and truck crops that were marketed principally thr
> John and Amelia have general commitments from a number of individuals to invest in their Sproondrift Cove Club golf course and distinctive residential community in Duval County. John wants to form a limited partnership. He realizes that every limited par
> Don Mason and Beth Daley were managers and members of Pacific Beach Developers, LLC (PBD), a start-up real estate development company focusing on rehabilitating older properties for increased rental values and possible resale. Daley made a contract with
> Hurwitz and Padden practiced law as equal partners for a short period of time before converting to an LLC. Some three years later, Padden informed Hurwitz that he intended to leave the firm. When they could not agree on how to divide $200,000 in fees rel
> When claims filed with an insurance company were approved for payment, they were given to the claims clerk, who would prepare checks to pay those claims and then give the checks to the treasurer to sign. The claims clerk of the insurance company made a n
> Ackerley Media Group, Inc., claimed to have a three- season advertising Team Sponsorship Agreement (TSA) with Sharp Electronics Corporation to pro- mote Sharp products at all Seattle Supersonics NBA basketball home games. Sharp contended that a valid agr
> Sabastian Hafner joined a start-up business with a business plan focused on making breads without common food allergens, such as wheat, yeast, dairy, and gluten, to be marketed in a major metropolitan area. The five founders of the business, including Sa
> Gilroy, Sims & Associates, Ltd., was a limited partnership engaged in real estate development. The original general partners were Richard Gilroy and William Sims. Thomas Green and John Murphy, Jr., were listed as limited partners, along with certain othe
> Kate Haley, an experienced builder, formed a limited partnership in August 2011, along with two limited partners, Drs. Growbioski and Gailen, who each provided $100,000 to the partnership for initial capital for the construction of a medical office build
> Alan Waung, a Hong Kong businessperson, purchased a golf course in Saginaw, Michigan, as an investment. As an avid golfer, Alan anticipates spending several weeks during the year at his “ Northern Pines ” course. He has been informed that a Subchapter S
> Thomas Banner assigned his voting rights and his right to receive distributions in the Hut at Avon, LLC, to Elizabeth Condo as part of a divorce settlement. When the other members of the Hut Group, Thomas Connors and George Roberts, learned of the unappr
> What is the principal advantage of an LLP over an LLC?
> Thomas Smith and Jackie Lea were partners in the logging business. In January 1981, they joined Gordon Redd and went into business running a sawmill, calling the business Industrial Hardwood Products (IHP). Smith and Lea used their logging equipment at t
> Leland McElmurry was one of three partners of MHS Enterprises, a Michigan partnership. Commonwealth Capital Investment Corp. sued the partnership and obtained a judgment of $1,137,285 against it, but the partnership could not pay the judgment. Commonweal
> Ross, Marcos, and Albert are partners. Ross and Marcos each contributed $60,000 to the partnership; Albert contributed $30,000. At the end of the fiscal year, distributable profits total $150,000. Ross claims $60,000 as his share of the profits. Is he en
> Allstate Insurance Company issued a check payable to “ Chuk N. Tang & Rosa C. Tang HWJT ” with “ Bank of America ” on the second line and the following explanation on the front of the check: “ Settlement of our rental dwelling loss caused by fire on 11/2
> Friedman, the “ O ” Street Carpet Shop, Inc., and Langness formed a partnership known as NFL Associates. “ O ” Street Carpet ’ s net contribution to capital was $5,004; Langness contributed $14,000 in cash; and Friedman contributed his legal services, on
> Buster Cogdill, a real estate developer, made an offer to the Bank of Benton to have the bank provide construction financing for the development of an outlet mall, with funds to be provided at prime rate plus two percentage points. The bank’s president J
> Thomas Bartomeli decided to leave his employment to join his brother Raymond full-time in a small construction company. The brothers each contributed individual assets to the company and worked together to acquire equipment with both signing notes join
> After graduating from Vanderbilt University with a degree in economics, James Pettes worked for Video Magic, a video rental business. In 1987, Dr. Gordon Yukon, a pediatrician, wanted to invest in a two- store video business called Rent-a-Flick. One stor
> Samuel Shaw purchased a ticket through Delta Airlines to fly a “ Delta Connection ” flight on Sky- West Airlines to Elko, Nevada. He was seriously injured when the SkyWest plane crashed near Elko. SkyWest ’ s relationship with Delta was a contractual bus
> Calvin Johnson and Rudi Basecke did business as the Stockton Cheese Co., a partnership, which owned a building and equipment. The partners agreed to dissolve the partnership but never got around to completing the winding-up process. Calvin continued to u
> Amy Gargulo and Paula Frisken operated as a partnership Kiddies Korner, an infants ’ and children ’ s clothing store. They operated the business very successfully for three years, with both Paula and Amy doing the buying and Paula keeping the books and p
> Baxter, Bigelow, Owens, and Dailey were partners in a New York City advertising agency. Owens, who was in poor health and wanted to retire, advised the partners that she had assigned her full and complete interest in the partnership to her son, Bartholom
