Case Study $2$

Javiers Very Hot Sauce! has hit the market. It has become a huge success locally, and they are looking to grow nationally. Javier has patented his famous concoction and trademarked the hot sauces name and logo$.$ Demand is so high that Javier and Elena are working full$-$time on the business. Their children, Antonio and Maria, have now joined the company full$-$time as well. In fact, Javier has made Antonio and Maria partial owners of the business. Javier and Antonio handle the production, sales, and delivery. Elena and Maria handle most of the administrative and business management tasks. They also hired a longtime friend, Tiffany, as the bookkeeper. While there are more employees now, Javier and Elena are the only authorized signatories on the corporate account.

At this point, the business has only one business credit card that they use to buy Javiers Very Hot Sauce! production supplies. There is also a small mortgage outstanding on the family property. The business owes vendors money for supplies, but it is consistently in the red. Individual family members carry high personal credit$-$card balances. Antonio has a loan on the delivery van, too.

Elena and Maria are working on securing a new production facility and distribution chain. They need this to accommodate an upcoming contract with a national chain. After locating a large warehouse on several acres, Elena and Maria approach their local credit union for a loan.

An issue arises during the commercial loan accounting review process. The bank discovers that Tiffany has been siphoning off large amounts of corporate money and cooking the books to hide her actions. She has written several checks from the corporate account and forged both Javier and Elenas signatures on several checks from the businesss account. Tiffany also wrote several of the forged checks to Don, a local loan shark, to repay her gambling debts. After feeling some guilt about her actions, Tiffany wrote one very large check out to Cash and slipped it into the collection box at church. The embezzlement is so severe that the family fears Javiers Very Hot Sauce! business is now on the brink of bankruptcy.

Meanwhile, Antonio has refused to enter into an exclusive distribution deal with the local grocery store. This upsets Tyrone, the owner of the local grocery store. Tyrone has exclusively promoted Javiers product and believes he is the one who made it a success. As a result of this dispute, Tyrone has discontinued buying the product. Tyrone has also reverse$-$engineered the recipe for Javiers Very Hot Sauce! and has posted it online in an act of vengeance.

Specifically, address the following rubric criteria in your memo to Javier and Elena:

Determine thelegal defensesJavier and Elena might raise about the checks written by Tiffany to Don, and explain why defenses will be successful or unsuccessful.

Determine the legal defenses Javier and Elena might raise about the check written by Tiffany and delivered to thechurch, and explain why defenses will be successful or unsuccessful.

Determinecivil claimsavailable to Javier and Elena against Tiffany based on her actions, and evaluate the potential for success.

Analyze the forms ofbankruptcyavailable to the business in this instance based on the chosen type of business entity, and determine which form is most appropriate and why.

A$.$ Assume the business entity is the same form as you chose in Case Study $1.$

Analyze the implications of a potential bankruptcy action on thebusiness assetsand explain which are subject to forced sales, liens, or forfeiture.

A$.$ Assume the business entity is the same form as you chose in Case Study $1.$

Analyze the implications of a potential bankruptcy action by the business on the personal assets of the individualfamily members, and explain if the assets of business owners are subject to forced sale, liens, or forfeiture.

A$.$ Assume the business entity is the same form as you chose in Case Study $1.$

Determine the legal recourse Javier has against Tyrone for infringement ofintellectual property rights, and explain why Javier will be successful or unsuccessful.