Question
Brown Corp. Inc. manufactures bricks. It owns all the shares in White Corp. Inc., which is the sales arm of the business. The members of
Brown Corp. Inc. manufactures bricks. It owns all the shares in White Corp. Inc., which is the sales arm of the business. The members of the board of directors of White Corp. Inc. are all officers of Brown Corp. Inc.
A salesmen on the staff of White Corp. Inc. negligently told Systems Inc. that a certain type of cement block was suitable for a retaining wall. It wasn't, and the wall collapsed, damaging expensive machinery. Systems Inc. learns White Corp. Inc. has no assets. Any profits are sent to Brown Corp. Inc. immediately by the way of dividends.
a)Diagram the corporate structure and the contract involved. Will Systems Inc. be successful in claiming its loss against Brown Corp. Inc.?
b)If the statements by the sales representative of White Corp. Inc. had been fraudulent, would that make any difference?
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