Karen, a talent agent, has hit hard times and needs cash. She borrows $50,000 from her mom. In January 2018, mom realizes that Karen will not be able to pay her back and forgives the $50,000 debt, telling her daughter she does not need to pay her back. Soon thereafter in February, Karen gives her mom her diamond necklace, valued at approximately $10,000 as a thank you gesture for forgiving the loan. Karen eventually files bankruptcy under Chapter 7 in May 2018. In her bankruptcy schedules she does not list her mom as a creditor nor does she list the transfer of the necklace to her mom. At a meeting of creditors, one of Karen's creditor tells the Trustee about the necklace because he saw Karen wearing it. Karen explains that she gave it to her mother as a thank you for a loan that was forgiven and she just forgot to schedule it.

(a) Discuss the legal risks to Karen and her mother arising out of these transactions.

(b)If Karen owns 100% of the stock in her talent agency, a California corporation and there are no employees, discuss how, under Chapter 7, Karen can attempt to keep the stock in her company?