Jada and Claire run competing start-up companies in California. Both companies sell solar-generated electricity to wholesale utility buyers, and each has a retail division that sells and installs solar panels for end-use residential consumers. Last year, each company reported gross revenues of more than $600,000.

Both companies rent tracts of land in the massive Death Valley National Park in California, on which they have installed their solar panels to generate the electricity they sell. Each also has retail offices and storage facilities located throughout the state, from which they sell solar panels to consumers. Both companies have entered into long-term purchasing agreements with solar panel wholesale vendors and each receives investments and credits from different private and government entities. Notably, MPG Bank is a creditor for both companies.

Jada operates her business as "Alley Electricity," a limited partnership. Jada is the general partner. There is one limited partner, Bob Lapidine, who manages the finances of the business. Jada signed all the contracts with vendors, numerous commercial leases for her storage and distribution facilities, and promissory notes (loans) with the bank, all for the purpose of carrying on her business. Alley Electricity owes MPG Bank $120,000.

Claire incorporated her business in California as SolElectric, Inc. She is the sole shareholder, director, and officer of SolElectric, Inc. When she signs contracts with vendors, leases with landlords, and promissory notes with the bank, she does so in her capacity as president of SolElectric, Inc., and all of the documents so indicate her representative capacity. SolElectric complies with all corporate formalities and Claire maintains all corporate funds and accounts separate from her personal funds and accounts.SolElectric owes MPG Bank $160,000.

Due to the COVID-19 pandemic and the California wildfires that ravaged the west, both Alley Electricity and SolElectric have experienced astronomical hits to their revenues. Both companies have had to lay off more than a third of their sales and installation workforce and are on track to miss out on installing enough panels in the next quarter of the year to remain solvent. Both have defaulted on their payments to their creditors, namely MPG Bank, for the last six months. MPG Bank is pursuing legal action against each company to recover on these defaulted loans, both of which are valid and enforceable contracts. You work for MPG Bank and have been asked to analyze the bank's options to collect on these two debts.

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