Gillis is the managing partner of Extreme Sports Partnership (ES) a partnership in the business of the retail selling of sports clothing and equipment.

The other partners have asked Gillis to find a new, low-cost supplier for treadmills (running machines).ES's current supplier is too expensive, and the profit margin is too narrow.

After many months of searching, Gillis meets a representative from a company that manufactures treadmills and is looking to enter the Canadian market.The treadmills are manufactured in Korea, and the treadmills appear to be both high quality and relatively low-priced.

Rather than tell the other partners about the Korean treadmills, Gillis thinks he can make money himself from this meeting.He therefore sets up his own company, Gillis Sports Inc.(GSI).His wife and brother are the two shareholders of GSI.GSI then enters into an exclusive distribution agreement with the Korean treadmill manufacturer.In its first year of operation, GSI earns a profit of $3 million, just from the sale of these treadmills.

At about this time, the other partners of ES find out what Gillis has been doing.Up to this point in time, Gillis had continued to tell the other ES partners he had not yet found a suitable treadmill supplier.

Advise the other partners what action can be taken against Gillis. (15 marks)