Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Saturday's Fashion, Inc. is a corporation that manufactures and markets cutting edge fashion clothing. Daniel, the CEO, decides that for every garment sold Saturday's would

Saturday's Fashion, Inc. is a corporation that manufactures and markets cutting edge fashion clothing. Daniel, the CEO, decides that for every garment sold Saturday's would give away an article of clothing to a poor individual in a developing country. The board of directors approves this initiative. The give away program ends up costing the company $2,000,000 in its first year. During that same time period the company had a net loss of $1,000,000. Additionally, three years ago Harry, the CFO of the company borrowed $200,000 from the company on a short-term basis. The board approved this loan, but Harry has not started making payments back to the company as agreed. Finally, Saturday's has not paid a dividend to the stockholders in two years. The shareholders are getting antsy and would like to receive a dividend. Eighty percent of the ownership is concentrated in three individuals; Cedric, Fredric and Dedrick. These three come to you seeking advice on several matters. First, they would like to sue Daniel and the members of the Board personally for the give away program. Secondly, they want to compel Saturday's to sue Harry to force repayment of the loan. Lastly, they want to compel Saturday's to declare a dividend. Please advise on how these things might be accomplished and any defenses the parties may have

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Sustainable Development Goals Key Principles And Tools For Supply Chain

Authors: Barden Gonzalez

1st Edition

B0BZFDM86C, 979-8388651501

More Books

Students also viewed these Accounting questions

Question

What is the effect of word war second?

Answered: 1 week ago