Analyze the scenario using the FIRAC model to determine if the court will pierce the corporate veil to hold Diaz personally liable for any debt of the corporation arising from Raj Jain's death if CCC, Inc. is unable to satisfy a judgment against it.

Before you begin writing your paper, you may want to review the information in the Corporations module relating to the personal liability of shareholders, paying close attention to Lecture 6.

In your identification and discussion of the Rule, make sure that you start with thegeneral ruleregarding the liability of shareholders for debts of the corporation before you discusseachof theexceptions to that rule(and each component of each exception that might result in the court applying an exception to hold a dominant shareholder personally liable).

DoNOTdiscuss whether

Raj Jain suffered his injuries as a result of negligence by CCC, Inc. or its staff. You can assume CCC is liable for Raj Jain's wrongful death at the adventure park. Your focus is exclusively on whether the court will pierce the corporate veil to hold Diaz personally liable if the company can't satisfy a wrongful death judgment against it. Diaz breached anyfiduciary dutiesowed to the corporation or its shareholders, as this analysis is NOT pertinent to the lawsuit filed by the Jains against CCC, Inc. and Camilla Diaz on behalf of their son.

Word Length: Your target length for a full analysis of this scenario is between600 and 750words.

Carla Becker, Chloe Curtis, and Camilla Diaz are three best friends who have known each other since high school. Commonly referred to as "granola" growing up, the girls always enjoyed spending time together in nature, going on long hikes, and rock climbing. After high school, the trio remained very close, still spending most of their time outdoors together.

Tragically, Camilla's father passed away in a boating accident on a summer afternoon in 2014. In his will, her father left her $80,000. Camilla was determined to use the money to improve her community while at the same time improving her life, as her father would have wanted. Always inspired by nature, Camilla thought the perfect way to use the money would be to build an outdoor ropes course for the children in her community, and run the business with her two best friends, Chloe and Carla.

Building the ropes course required a capital investment of $65,000, leaving $15,000 in the account left to her by her father. Camilla proceeded to properly incorporate the business in her home state of Mythigan as a C-Corporation, and called it CCC, Inc. She did not elect close corporation status. Camilla is the president and CEO of the company and owns 90% of the shares in the corporation. Carla serves as secretary and owns 7.5%, and Chloe owns 2.5%. The trio of women also comprise the CCC board of directors.

At its first meeting, the Board adopted bylaws that outline CCC Inc.'s management structure and govern its day-to-day operations. In addition to stating the company's purpose, the bylaws identify the rights and duties of the officers, directors, and shareholders; establish quorums; specify procedures for electing and removing directors, their qualifications, and terms of office; set up the procedures for an annual shareholders' meeting; and spell out how to amend the bylaws. In addition, the bylaws specify that the board must be comprised of three directors who must meet at least quarterly; and that accurate and detailed minutes of all board and shareholder meetings must be taken and maintained.

The ropes course opened in 2015 as Coronado. Adventure Park. Camilla, Chloe, and Carla were enthusiastic about the ropes course and about how it would introduce climbing and an appreciation of the outdoors to the youth in their community. In the first year it was open, CCC, Inc. did very well; the community readily accepted the new activity for their kids and local businesses held team-building exercises at the ropes course. Building on the first year's success, the board decided to expand operations, and in 2016 added a second, higher course, zip lines, a climbing wall, and a rugged mountain bike track.

The revenue earned from the adventure park was mostly distributed to Camilla's personal account, including checks payable to CCC, Inc. but she usually kept enough money in the corporate account to purchase and maintain equipment for the park, pay wages to the growing staff, and pay all other corporate expenses, including the purchase of commercial property insurance to cover damage to park equipment, as well liability insurance to cover any injuries suffered by customers engaging in activities at the adventure park. On a few occasions, however, Camilla used her personal account to write checks for repairs to the ropes course, ziplines, and climbing wall.

Particularly in the first few years, the three owners were excited that their venture was going well, and would host dinner parties with their friends using the corporate bank account from time to time to pay for these events.

As CEO of the company, Camilla ran the day-to-day operations and the board held ten meetings in 2016 and seven in 2017, with Carla diligently taking detailed, accurate minutes of all board discussions and decisions. By 2108, the novelty of the business had faded, and the board no longer held regular meetings, but Camilla did call 2 or 3 board meetings a year when she wanted her friends' advice, and Carla continued taking detailed minutes. Since its incorporation, CCC has held shareholder meetings every year, again with Carla diligently taking detailed minutes. The women have fun at these gatherings, chuckling as Camilla, the majority shareholder, of course, votes to re-elect herself, Carla, and Chloe as directors.

After COVID hit in March 2020, customers stopped coming to the adventure park. When the insurance premium came due in June 2020, Camilla made the decision not to renew the liability insurance policy for the park, as she didn't believe they needed it with the small number of users, particularly with the lack of revenue that the course was bringing in. Camilla has not purchased insurance for the company since then, even when users returned to the park in larger numbers than at any time since the park opened in 2015.

In August of 2022, Raj Jain, an 8-year-old child attending a birthday party at the ropes course fell to his death when he slipped out of the protective harness. It was subsequently determined that a CCC employee had put young Raj in a harness that was too large and failed to hold him securely when he toppled and fell while traversing the course.

His parents have filed a wrongful death lawsuit against CCC, Inc. and against Camilla Diaz in her individual capacity as the corporation's primary shareholder, asserting that Diaz is the alter ego of the corporation and that it was deliberately undercapitalized. At the time of the suit, the corporation still had $15,000 in its reserve account, less than $700 in its bank account, and no liability insurance. Because of these limited funds, the child's parents hope to pierce the corporate veil to recover most of their damages directly from Camilla.