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Andrew, the shareholder-manager of a wheel manufacturing company (Wheelies Inc.), starts a new auto parts manufacturing company (CarBasics Inc.). He makes sure that Wheelies gets

Andrew, the shareholder-manager of a wheel manufacturing company (Wheelies Inc.), starts a new auto parts manufacturing company (CarBasics Inc.). He makes sure that Wheelies gets all its supplies only from CarBasics at above-market prices. Workers at CarBasics get their salaries from Wheelies. Two years later, CarBasics is a stupendous success while Wheelies has creditors knocking on its doors. Are shareholders of CarBasics liable to creditors of Wheelies?

A) Yes, they are liable because a manufacturer owning a supplier is per se illegal.

B) Yes, they are liable because looting occurred between CarBasics and Wheelies.

C) No, they are not liable because CarBasics is not a subsidiary of Wheelies.

D) No, they are not liable because CarBasics and Wheelies are separate legal entities.

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