Thanks to Jack's suggestion Professor B moved to Texas where he became hugely successful in the oil industry. Professor B then returned to California with his money and a Texas way of talking, such as "Stick with me & some day you'll be wearing horse turds as big as diamonds!" Anyhow, the Professor incorporated Texas Oil Inc. and he owned 100% of the stock of the corporation. The corporationcontracted with the Shell oil refinery (Shell) to supply crude oil to Shell. Shell paid a $200,000 deposit to Texas Oil Inc. for the expected crude oil. But, Texas Oil, Inc. never provided any crude oil to Shell and Texas Oil Inc. refused to return the deposit to Shell. Instead the $200,000 was paid out by Texas Oil Inc. to Professor B as his salary as president of the corporation. Also, Texas Oil Inc. did not always adhere to its bylaws and Texas Oil Inc. was somewhat undercapitalized when it was first incorporated. Shell sued Texas Oil Inc. for breach of contract and obtained a judgment for one million dollars against Texas Oil Inc. but Texas Oil Inc.'s assets total $100 so the corporation can't pay the judgment. Professor B is, however, worth five million dollars.

JJ Partnership is a general partnership which has been in business for 2 years, and Jack and Justin are the only 2 general partners in the partnership. For the 2 years the partnership has been in business Jack has performed 98% of the partnership's work and Jack contributed 98% of the partnership's capital. Jack and Justin do not have a partnership agreement. The partnership now has $100,000 in profits which may be distributed to the partners. But Jack wants $98,000 distributed to him, with $2,000 to Justin, and Justin wants the profits split equally, $50,000 to each partner. Also, Jack wants to sell his partnership interest to Bob for the fair market value of the partnership interest but Justin won't agree to the sale.

A. Does Shell have any way of collecting any of the one million dollar judgment from Professor B? If yes, discuss the basis for Shell collecting the judgment from the Professor.

B. Who will prevail with respect to the distribution of profits, Jack or Justin? That is, will Jack receive $98,000 and Justin $2,000, or will Jack and Justin each receive $50,000? Discuss.

C. May Jack sell his partnership interest to Bob or can Justin prevent the sale by refusing to agree to the sale? Discuss.