Ted invented a fresh-tasting cola and started a small home business in 2014. After about 9 months, Ted decided that if he wanted to grow beyond his current market, he would need to find some investors to raise capital for a suitable manufacturing site and a marketing campaign. Nora and Bob invested in Ted's business, and the three of them formed and became shareholders in Frosty Cola Corporation ("Frosty"). Ted, Nora, and Bob own an equal number of shares in and serve as directors of Frosty. 1. As directors, Ted, Nora, and Bob make many decisions for Frosty. How are they protected from personal liability for such decisions? (3 points) 2. In 2017, Bob alleged that Ted had diverted Frosty's assets and opportunities to ReFresh Cola Corp., a corporation owned solely by Ted's wife, Sally. Ted denies the allegations. a. What lawsuit would Bob file to recover the losses? (1 point) b. Who will receive the damages from the lawsuit if any are awarded? (1 point) In 2015, Nilsson, when working as a machine operator, was injured by a pipe cutoff machine manufactured by Continental Machine ("Continental") in 2005. In 2010, Fredor Corp. had purchased all of the production and manufacturing assets of Continental ("Assets"), including the pipe machine product line, and formed Continental Machine Manufacturing Co., (CMM). The Assets from Continental were transferred to CMM, and CMM continued to manufacture product lines that were the same as Continental's had been. However, the shareholders of Continental did not become shareholders or officers of Fredor or CMM. Most of the production/manufacturing employees of Continental became employees of CMM. There was no evidence that the transaction was undertaken for a fraudulent purpose, and also, no evidence that Fredor or CMM agreed to assume Continental's liabilities. After the sale of Assets, Continental continued to exist, but it had no production/manufacturing assets. However, Continental continued to own the real estate/building in which the machines were located and leased that building to CMM. Nilsson brought a product liability suit against CMM. CMM claimed that it had merely purchased Continental's assets and had not assumed liabilities. Review the facts, and then discuss whether a merger has occurred and the likelihood that CMM is liable