You are a consultant for a client who wholly owns a business called Bistro, a popular caf and bar located in historic downtown, Arizona. Your client also inherited a significant sum of money that is invested in several business entities, including publicly traded companies. Over the course of the fall season (into the winter), your client has had several questions. Some of the questions relate to your client as the owner of the caf. Others relate to other business issues the client is experiencing. Those different issues are found on the next page

For each scenario, briefly address the following:

1. What laws would you use in assessing the situation?
2. What is your sense of the "right" thing to do in the situation?
3. What steps should the client take at this point?
4. What are the risks (if any) of failing to act?

1. Sep 22: Your client has been invited to serve on the board of directors of a company owned by a good friend of his. Your client knows that at one point the other company had some trouble with misstated financial statements. The client asked about it and the friend said that it was all taken care of. Your friend would like to serve in this capacity but has some concerns about that issue as well as the client's qualifications to be a board member. Discuss a board member's duties and whether the client has fulfilled them regarding the financial statement issue.
2. Sep 29: Your client would like to take out a loan to remodel part of the caf. Even though the caf is a corporation, the lender is nervous about loaning to it (because so many small corporations go broke). Your client is the only shareholder of the corporation. The lender has sked for some sort of assurance or personal promise from your client that the client will pay if the corporation cannot.
3. Oct 6:In addition to the loan on September 29 for the remodel, your client wants to purchase some new equipment for the caf - a real nice multi-nozzle espresso machine. The cost of the machine is approximately $9,000. The seller will not sell it on credit and the client does not want to use a personal credit card for the company purchase. So, the client went to a credit union. The credit union is willing to loan the money but wants to be able to take the espresso machine if the client does not pay back the loan. Describe what this is and how it works.
4. Oct 13:Your client agreed to serve on the board of directors of a friend's company (see Sept 22). Now your client has learned that the company did indeed recover from its financial statement issue but has significant cash flow issues - to the point that it cannot pay its debts when due.
5. Oct 20: As part of an attempt to increase the scope of the caf, your client wants to purchase two vehicles for delivery. To have good visibility in the community, the client wants to buy "vintage" cars - probably 1950's or 1960's models. The client is a little worried about buying a car that has mechanical problems, higher mileage then the odometer shows, and other issues. Since employees will be driving the cars, the client wants to make sure they comply with safety regulations.
6. Oct 27:Your client has created a new list of menu items and is "re-imagining" the caf dcor to be more 1950's style to attract the college crowd. There are newly designed menus, a distinct color scheme and furnishings, and super creative names for the new items. The client wants to make sure competitors do not copy this stuff.