Daniel Vu bought a peat bog with two of his friends. A peat bog is a wetland that accumulates peat( a deposit of dead plant material), which can be used as a fossil fuel for heating and electrical energy. Daniel and his friends bought the peat bog for $40,000. Daniel then incorporated a company PB Inc,. and himself and his two friends named as directors. The newly appointed directors held a meeting, and on the first order of business they sold the peat bog tp PB Inc. for $500,000. The directors then voted to sell all of the shares of PB Inc. to five interested business people for $500,000, based on the value of PB Inc.'s sole asset, the peat bog. When the business people found out what had happened, they sued Daniel and his friends.

Required:

Explain the likely outcome of each independent situation. (3 marks)