All questions are related to the Misconduct in the Corporate Environment. Accordingly, the explanations for your answers must be given using the language and reasoning discussed in Misconduct in the Corporate Environment such as ULTRA VIRES DOCTRINE , ULTRA VIRES DOCTRINE , SHAREHOLDERS' RIGHTS , Individual Actions , Derivative Actions , SHAREHOLDERS IN CLOSE CORPORATIONS , CORPORATE LIABILITY , INDEMNIFICATION, EMPLOYEE LIABILITY , COMPETITIVE MISCONDUCT , BRIBERY etc.

1.

Oh was the president and majority shareholder of Kay Corporation. Although the corporation had long been successful, it recently began to have cash-flow problems when the Japanese government prohibited the sale of key materials that it needed for production. When Kay Corporation was unable to pay some of its suppliers, Oh gave the corporation a personal loan to help pay the debt. When that was insufficient to meet all of the outstanding claims, the suppliers sued Oh personally for the amount they were owed. They argue that Oh's personal loan to the corporation is proof that he dominated the corporation. Is Oh personally liable on the debt? Explain the analysis a court would use.

2.

Several minority shareholders sued Oh and other members of the Kay Corporation board of directors because of their original decision to purchase their key components from Japanese suppliers. They claim that if the corporation had originally sourced its raw materials from China, instead of from Japan, the company would be profitable today. Explain how a court will determine if the directors are liable for their original decision to source from Japanese suppliers.

3.

Suppose that Oh and the other directors have been holding secret talks with a Chinese company that can supply Kay Corporation with the materials that it needs to resume full production. When the new sourcing contract is announced, Kay Corporation's stock prices will rise significantly. Before the public announcement, a taxi driver overheard Oh discussing the new contract on the telephone. Is it illegal for the taxi driver to purchase Kay Corporation stock based on this information? Explain