The following week, Kathy Smith, Jason's wife, went to see you to seek legal advice. Kathy told you that her husband Jason and his brother, Tony, had incorporated a company together – Bespoke Quality Tailoring Corp. (“BQTC”). The business, although only 8 months old, had been doing very well by offering on-line custom clothing for “businesswomen”. Tony was the “face” of the business, even though he knew little about clothing, as Jason wanted to be very “low key”. The plan was to expand BQTC over time. The basic business model was that women could have made-to-measure business attire for a low price. BQTC had connections with clothing manufacturers in India and were able to have custom clothing made and shipped directly to the customer at a fraction of Canadian competitor prices. Tony has since told Kathy, “When Jason died, the business came to an end. Because my brother and I worked together, everything belongs to me as everything is joint and several. I am sure you have heard that term. I am sorry, but you do not get anything. My brother loved me for more years then he knew you. BQTC has paid all money to me as a dividend. As per my legal advice, I declared this dividend as I was the director.”

Kathy wants to know if what Tony has told her is correct and if she has any rights to anything. Kathy begins to cry and says, “I know Jason would want to take care of me and his child. What Tony said is so out of character.”

Prepare a memorandum which analyzes the legal issues which the Estate of Jason now face. Your response to Kathy should be as detailed as possible and should provide her with a clear analysis of the issues as well as details as to how she will have to proceed in order to resolve these issues and compel a further response from Tony.