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Charlie created a corporation called BBB inc. and was its sole officer and director. Charlie's plan was to use BBB to buy some commercial real

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Charlie created a corporation called BBB inc. and was its sole officer and director. Charlie's plan was to use BBB to buy some commercial real estate to lease to businesses. BBB's first purchase was made with a loan from Charlie to BBB for $100,000 and a mortgage from Northwest Bank to BBB for $400,000. The mortgage was registered by the bank. The purchase was a small building on a busy street with retail on the main level and a workshop on the upper level. BBB leased the space to Bike Bros, a bicycle sales and repair company. The lease was for a 3-year term. Bike Bros was a partnership formed by two friends, Mike and Dave. Bike Bros spent a lot of money on the interior of the store, buying repair equipment, and purchasing inventory. After about a year in business, Bike Bros started running out of money. As a result, Bike Bros started falling behind on its rent. At first the rent was just paid late, but then only partial amounts were being paid. Eventually, Bike Bros owed BBB $20,000 in late rent. A. If Mike and Dave decided to give up the business, could they sell off their remaining inventory, divide the money, and not repay BBB (state yes or no and explain your answer)? (2 Marks) B. If BBB stopped paying its mortgage with Northwest because Bike Bros stopped paying its rent, what could Northwest do to recover its loan? (2 Marks) C. Assume that Bike Bros packed up all their equipment and left town after 14 months. Charlie managed to find a new tenant one (1) month after Bike Bros left at the same lease rate. Can Charlie sue Bike Bros for the rent for the remaining term of the lease? (1 mark) D. Assume that Charlie wanted to get out of commercial real estate and decided to sell the building. If the value of the building had fallen and it was only worth $400,000, could he pay himself back the $100,000 loan first and leave Northwest with the loss on its loan? Who would have priority to the proceeds of sale? (2 Marks) E. Assume Charlie sold the building, repaid Northwest, and filed to dissolve BBB. If property taxes were still owing by BBB to the government, could the government sue Charlie personally? (1 Mark)

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