Question
You are Vice President of Acquisitions for Greensill Capital, LLC.Your chief executive officer asks you to evaluate a possible acquisition of a company known as
You are Vice President of Acquisitions for Greensill Capital, LLC.Your chief executive officer asks you to evaluate a possible acquisition of a company known as Mayor Oscar's Meat Sellers, Inc.("MOMS").In performing due diligence on MOMS you learn the following:
You learn that thirty percent of MOMS' annual revenue derives from its manufacture and sale of microwave ovens to Amana, Inc., which operates retail stores in all 50 states and sells the microwave ovens to consumers.You review correspondence from Amana advising MOMS of more than three dozen claims Amana has received asserting that consumers have been seriously injured as a result of electrical fires erupting in the microwave ovens manufactured by MOMS.MOMS' General counsel tells you not to worry about these claims because MOMS: (i) has recently changed the design of the electrical components of the microwave ovens at no additional cost in favor of a design which MOMS' engineers originally recommended but did not adopt at the urging of MOMS' marketing department; (ii) MOMS is not in privity with the consumers who purchased the microwave ovens; and (iii) Amana's sales order form with consumers disclaims all warranties and excludes any and all damages for personal injury.
a brief memo to your CEO addressing the issues set forth above.
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