Question: Vern Hayes owned 32 percent of Coast Oyster Co. and served as president and director....

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Question: Vern Hayes owned 32 percent of Coast Oyster Co. and served as president and director. The company owned several large oyster beds, including two located in Washington State. Coast was struggling to pay its debts, so Hayes suggested that the company sell the Washington beds to Keypoint Co. After the sale, other officers at Coast discovered that Hayes owned 50 percent of Keypoint. They demanded that he give the Keypoint stock to Coast. Did Hayes violate his duty to Coast? Strategy: Here, Hayes has violated the duty of loyalty not once, but twice. (See the "Result" at the end of this section.)