BYP11-6 The R&D division of Hancock Chemical Lid. has just developed a chemical for sterilizing the vicious Brazilian "killer bees" which are invading Mexico and the southern states of the United States. The president of Hancock is anxious to get the chemical on the market to boost the com- pany's profits. He believes his job is in jeopardy because of decreasing sales and profits. Hancock has an opportunity to sell this chemical in Central American countries, where the laws are much more relaxed than in the United States. The director of Hancock's R&D division strongly recommends further testing in the laboratory for side-effects of this chemical on other insects, birds, animals, plants, and even humans. He cau- tions the president, "We could be sued from all sides if the chemical has tragic side-effects that we didn't even test for in the labs." The president answers, "We can't wait an additional year for your lab tests. We can avoid losses from such lawsuits by establishing a separate wholly owned corpora- tion to shield Hancock Lid. from such lawsuits. We can't lose any more than our investment in the new corporation, and we'll invest in just the patent covering this chemical. We'll reap the benefits if the chemical works and is safe, and avoid the losses from lawsuits if it's a disaster." The following week, Hancock creates a new wholly owned corporation called Badell Lid., sells the chemical patent to it for $10, and watches the spraying begin