Your client, Tom Terrific, has been operating his business for the past five(5)

years. The first year Tom was busy getting established and acquiring customers. Years two through five, however, proved very successful for Tom as he was able to expand the customer base, his revenue base, his employees, and his business assets. Unfortunately, a sudden, unanticipated downturn in the economy in this, his sixth year of operation, has caused Tom to lose a large portion of his customer base. He has spent money advertising with various media in an attempt to gain new customers, but his income from sales services remains flat and declining. Likewise, his stockpile of financial resources is being rapidly depleted forcing Tom to contemplate downsizing and layoffs as the bills mount faster than he can pay them off.

As his business lawyer, Tom Terrific once again seeks your advice regarding his options for continuing to operate his business. Specifically, he seeks advice on the following:

1.Bankruptcy-how does it work? What would be the effects of bankruptcy on

his business and on Tom personally?

2. Accountants Legal Liability-

If Tom's extreme losses can be traced to errors committed by the accounting firm, Dewey, Chetum, and Howe, LLP, that Tom has retained for the past five years to manage the businesss books and records what legal recourse, if any does Tom have against his accountants? What theories for liability might apply?