The Brown family owns several companies, including the J. H. Stevedoring Company and Penn Warehousing and Distribution, Inc. Many aspects of the companies’ operations and management are intertwined. Dennis Bishop worked for J. H. and Penn for more than ten years until by 2011, he had become the fi nancial controller at J. H., where he was responsible for approving invoices for payment and reconciling the corporate checkbook. In December 2012, Bishop began stealing from Penn and J. H. by writing checks on the corporate accounts and using the funds for his own benefi t (committing the crime of embezzlement). Several members of the Brown family signed the checks for Bishop without hesitation because he was a longtime, trusted employee. Over the next two years, Bishop embezzled \($1\),209,436, of which \($670\),632 was used to buy horses from the Fasig-Tipton Company and Fasig-Tipton Midlantic, Inc., with Penn and J. H. checks made payable to those fi rms. When Bishop’s fraud was revealed, J. H. and Penn fi led a suit in a federal district court against the Fasig-Tipton fi rms

(the defendants) to recover the amounts of the checks made payable to them. Using the information presented in the chapter, answer the following questions.

1. What method was most likely used to negotiate the instruments described here?

2. Suppose that all of the checks issued to the defendants were made payable to “Fasig-Tipton Co., Fasig-Tipton Midlantic, Inc.” Under the Uniform Commercial Code, were the instruments payable jointly or in the alternative? Why is this signifi cant?

3. Do the defendants in this situation (the two Fasig-Tipton fi rms) meet the requirements of an HDC?
Why or why not?

4. In whose favor should the court rule, and why?