Clyde Monett has been operating an art restoration business since 1998, specializing in the refurbishment of portraits and paintings.He operated the enterprise as a sole proprietorship (called Monett's Art Restoration Services) until 2006, when he attended a "Business Structures, Licenses and Permits" workshop at the local community college, at which time the presenting attorney suggested he convert his business to a corporation, in order to "shield" Monett's personal property and real estate from liability for his business' financial obligations (Monett's personal net worth is approximately $150,000.)Through the incorporation process, the only change to the business name was the addition of the word "Incorporated."Monett was the only incorporator of the business.He serves as the president, vice-president and treasurer of the corporation; his sister, Georgette O'Keeffe, is the secretary.Since the corporation was formed in 2006, Clyde and Georgette have only convened one "official" corporate meeting; the meeting lasted approximately one hour, and the two shared family gossip for forty-five minutes of that hour.Monett's Art Restoration Services, Incorporated has maintained an average daily balance of $45.22 in the corporate checking account at Homeland National Bank.Yesterday Monettinadvertently purchased the wrong art refurbishment materials (the cleaning solution was too acidic,) and the oversight resulted in irreparable damage to a painting conservatively valued at $75,000.The owner of the painting, Paul, demands $75,000 in damages from Monett; Monett apologizes, offers two free coupons for future restoration services, and refuses to pay the $75,000.The current corporate checking account balance is $52.84.

Is Clyde Monett personally liable for the $75,000 damage claim? Is he ethically obligated to pay Paul $75,000?