CASES FOR DISCUSSION Case 1 Cyndi wants to check with you before she says something to the general partner of the limited partnership in which she is a limited partner. At a conference, she saw some new computer systems that would help the business, and she would like to be able to tell management of the limited partnership about these systems. Because she receives information of this nature regularly, she wonders if she can provide advice to management from time to time. Advise her on this matter. (LO 10.1, 10.4) Case 2 Weiping and Jared had a partnership providing bookkeeping services to local businesses under the name W&J Account- ing. Jared had recently incurred some large gambling expenses and owed Elsie, his bookie, a considerable amount of money. Jared offered to work off his debts by providing bookkeeping services to Elsie's legitimate businesses in the evenings and on weekends. Things were working out until Jared made an error in his calculations on Elsie's accounts, which cost her $15,000 to correct. Elsie called Weiping and told her that she would bring an action against W&J Accounting to recover the money that Jared's negligent bookkeeping had cost her unless Weiping paid her right away. "Talk to Jared; it has nothing to do with me!" Weiping responded before slamming the phone down. Elsie sued Weiping and Jared as partners of W&J Accounting. Outline and explain the legal implications of this situation for Weiping and Jared. (LO 10.1, 10.4) Case 3 Saldan was an employee of Organo Farm Corp. Organo owned and operated a 200 hectare farm and allowed Saldan to harvest soybeans from the fields, for which Saldan would pay the corporation a price per kilo. Kia, the president of Organo, had become unhappy with the price per kilo that Saldan was paying and the two of them got into a heated argument. Kia carried a gun to scare rabbits from the fields and, in the heat of the argument, he took out the gun and shot Saldan, who died from his wounds. The executor of Saldan's estate brought a legal action on behalf of Saldan's children against Organo Farm Corp., based on vicarious liability for the actions of its president, as well as against Kia. Kia has very few assets but Organo has some very valuable equipment and the farmland. Kia has admitted his actions and his personal liability but Organo is not willing to admit liability, claiming Kia was not acting within the scope of his employment when he shot Saldan. Outline the legal issues in this case and present arguments on behalf of the following: (LO 3.1, 3.2, 8.2, 10.1, 10.5, 10.6) a. The executor of Saldan's estate; and b. Organo Farm Corp.Case 4 You are the sole director of a private corporation, Sounds Incredible Inc., which operates a very successful sound recording studio. You and your brother Dom are the two shareholders, and each of you owns two common shares in the company. Dom holds the office of Treasurer of the corporation and you are the President. The company was started three years ago using a $50,000 loan from your aunt, Jerusha, and so far she has only required interest to be paid on the loan annually. The loan is payable on demand and if it had to be repaid, Sounds Incredible would be on shaky ground to survive. Dom had a meeting with Jerusha yesterday to confirm the amount of the annual interest to be paid for this year. He met with you today to talk about how delighted Jerusha was with the company's success, and some "suggestions" she had made during their conversation to help the business continue to grow while using the money she had loaned you. Jerusha's daughter, Jaspreet, is finishing high school this year. Jaspreet won a singing competition at school and is very interested in the music industry. Your aunt thinks it would be an excellent opportunity for her daughter to learn about the industry by becoming a director of Sounds Incredible. Also, Jerusha's husband, Navdar, who had owned and operated a video store as a sole proprietorship for a number of years, has declared bankruptcy. Navdar is hanging around the house feeling lost, and Jerusha believes that if he were to become a director of Sounds Incredible, it would give him a sense of direction again. And she suggested that the company could hire him as an employee to handle marketing, which would make good use of his talents and give him a salary. Jerusha looks forward to hearing the results of the elections to be held at your shareholders' meeting next week. Outline and discuss the legal issues, if any, in this case in light of the following: (LO 10.1, 10.5, 10.6) a. Jaspreet and Navdar's qualifications for election as directors of the corporation; b. Navdar's employment by Sounds Incredible; C. Obligations you and Dom have as shareholders of the corporation; and d. Obligations you have as a director of the corporation