Legal and Ethical Scenarios

Select two of the three scenarios. Support your responses with appropriate cases, laws and other relevant examples by using at least one scholarly source from the SUO Library in addition to your textbook for each scenario. Do not copy the scenario text into the paper. Label the beginning of each scenario with the number you selected (e.g., Scenario 1). Cite your sources in APA format on a separate page. Submit your document to the Submissions Area by the due date assigned.

Scenario 1:Securities

In 2012, after working at First National Bank for six years, Billy Bryant helped establish Breakstone Capital Corporation (BCC), a venture capital firm that invested in the communications and technology sectors. BCC went public in 2014, and Bryant served as its CEO and chairman of the board. Various documents filed with the SEC stated that Bryant earned a BBA degree in accounting from Northwest University. In fact, Bryant attended Northwest for four years, but he did not graduate. After being pressured by a journalist, Bryant disclosed the misrepresentation to the BCC board. The same day, the company issued a press release correcting the statement.

The press responded negatively to “another CEO that lied about his resume” and speculated about “what else might not be right.” On the day the press release was issued, BCC’s stock price dropped from $32.45 per share to $16.22, but it fully recovered within a month.

Shareholders sued, alleging that the misrepresentation violated section 11 of the Securities Act of 1933, section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 under the 1934 Act.

• Was Bryant’s lie about having a college degree material?
• Would your answer be the same if a CEO lied about having helped to take a company through an initial public offering and subsequent acquisition by another company?
• Would a reasonable member of the BCC board be comfortable keeping Bryant as CEO once they learned that he lied about having a college degree?

Scenario 2: Securities

Pampered Pooches, Inc. proposes a merger with Sit Means Sit, Inc. (SMS). SMS will obtain the approval of its shareholders; and then, by operation of law, SMS shares will become shares of the surviving corporation, Pampered Pooches, Inc.

Assume that prior to the merger Paulie Smith owned 25% of SMS stock that he purchased three years before in a private placement. Smith will only own 2% of the Pampered Pooches shares and will not be an officer or director of the merged company.

• Is it necessary to register the Pampered Pooches shares?
• May Smith freely resell his Pampered Pooches shares?
• Would it matter whether the shares were registered in connection with the merger?

Scenario 3: Shareholder Rights

Katy Kirkland, a former employee of the Sand Dune Resorts, Inc., owned 500 shares of stock (10%) in the company. Kirkland was terminated after five years of employment at Sand Dunes; however, she became part owner of Holiday Isles, Inc., a competitor of Sand Dunes. When Sand Dunes made Kirkland an offer to purchase her stocks, she requested access to Sand Dunes’ corporate books to determine the value of her 500 shares of stock. Sand Dunes refused on the basis that Kirkland was a competitor.

• Does Kirkland have a right to view the books? Why or why not?
• Propose a solution to the situation.

Submission Details:

• Name your document SU_BUS30555_W1_LastName_FirstInitial.doc.
• Submit your document to the Submissions Area by the due date assigned.

Legal and Ethical Scenarios

Select two of the scenarios. Support your responses with appropriate cases, laws, and other relevant examples by using at least one scholarly source from the SUO Library in addition to your textbook for each scenario. Do not copy the scenario text into the paper. Label the beginning of each scenario with the number you selected (e.g., Scenario 1). Cite your sources in APA format on a separate page. Submit your document to the Submissions Area by the due date assigned.

Scenario 1 – Contracts

Greg, a consumer in Tennessee, sent a purchase order to Campbell Manufacturing, a U.S. company, for a 4000 PSI gas pressure washer valued at $1275. Greg needed a new pressure washer for his part time business of washing houses. The order did not specify how disputes between the parties would be settled. Campbell returned a definite, unconditional acceptance that contained one additional term which stated that disputes must be submitted to arbitration. Greg received the acceptance; however, he never agreed or objected to the additional term.

Campbell orally contracted to sell 15 pressure washers to London Painting Company a large commercial painting company in France.

• Explain the status of the contract between Greg and Campbell.
• If a contract was formed, did the additional term in the acceptance become part of the contract?
• Is the contract between Campbell and London legally enforceable? (Additional research outside of the textbook may be necessary).

Scenario 2 – Management of Corporations

Parker and Phillips incorporated P & P Resorts Inc., a closely held Texas corporation. Parker was president and Phillips served as vice president and director for operations. Parker owned 40% of the stock, while Phillips owned 60%. Both men met with CTA, a group of travel agents from California to discuss special deals for booking groups into the resorts. After the first meeting, all contracts with CTA were made by Phillips, who learned that there was a good chance that CTA would award the contract to P&P Resorts. Phillips incorporated Travel Brokers and was its sole owner. Phillips used P& P Resort’s time to work on proposals for Travel Brokers and managed to keep negotiations with CTA a secret from Parker. When Parker discovered Phillip’s actions, he filed suit against him for wrongfully taking a corporate opportunity from P &P Resorts. Phillips claimed that he did not take a corporate opportunity because Travel Brokers did not have the financial ability to undertake the contract with CTA.

• Provide the arguments for Parker and Phillips.
• Determine which party should win and provide support for your selection.
• Explain any ethical principles applicable to this case.

Scenario 3 – Product Liability

Allan was not a licensed plumber, but often installed hot water heaters as part of his job as a handyman. Allan installed a new hot water heater manufactured by Bradford Inc. for Karla, a single mother with two children. Warnings were provided in large bold letters on a metal plate on the water heater. Similar warnings were provided in the manual Allan provided to Karla at the time of installation. The warning on the water heater read “CAUTION: HOT WATER CAN SCALD.” The heater itself contained a picture of hot water coming from a faucet with the words “DANGER” printed above it. In addition, the following statement was printed on the water heater.

Warning! Water temperature over 120°F can cause severe burns. Children, elderly persons, and the disabled are at higher risk of being scalded. Test water temperature before bathing or showering. Temperature limiting valves are available, see manual.

Allan set the temperature to 105°F. The next day, 3-year-old Simon was being bathed by his 12-year-old sister, Linda. When Linda received a text on her cell phone, she left Simon alone in the bathtub with the water running. Simon was scalded by the water from the tap. Simon’s mother brought suit against Allan and Bradford Inc. alleging defects in the design of the water heater and Allan’s failure to warn her about the heater’s dangers.

• Provide arguments that Allan, Bradford and Linda will introduce in court.
• Determine which party should win and support your answer.

Submission Details:

• Name your document SU_BUS30555_W2_LastName_FirstInitial.doc.
• Submit your document to the Submissions Area by the due date assigned.

BUS3055 Individual Project Instructions

To make the course engaging for each student, you will select a legal topic to research in Week 3. A list of potential topics is linked to this assignment. Although you are not required to select the exact topics listed, you should select something closely related. Try to select a topic that reflects an issue that is related to a concern you have in your professional life. If your topic is not on the list, contact your instructor for approval.

With the exception of the introduction, you must use the headings that are explained below and the information must be presented in that same order.

Introduction

Provide a short introduction to the topic. Provide some background about the topic selected and why it was selected. Include definitions as necessary. Use more than one paragraph, if needed.

Note: Do not use the term Introduction for the heading, as APA does not use that term. See APA materials in the Library Research Guide.

Article Review

Locate two scholarly articles related to your topic. Summarize the articles in your own words and explain how each is related to your topic. Do not use court cases in this section. You must use scholarly articles from the South University Online Library. Legal journals may provide some of the best sources of information. Westlaw Campus Research is a good option for finding legal information in law journals.

Laws and Regulations

Research and analyze one law or regulation related to the topic you selected. The information may require research of federal and/or state laws, as well as administrative agency laws. Summarize the information about the law or regulation you found and explain how it applies to your topic.

Cases

Locate one published case (lawsuit) that is related to the topic you selected. Summarize the case in your own words and explain how it is related to your topic. Provide a summary that includes the name of the case, state or federal court, issue, summary of events and ruling. Explain whether you agree or disagree with the court’s decision. Westlaw Campus Research is a great resource for finding specific state and federal cases. The following sources may also be helpful. You must read the case and not a summary of the case from a blog or other article.

FindLaw – Caselaw.findlaw.com

Justia

Public Library of Law

Leagle
Open Jurist

Google Scholar Video for Finding Cases

Summary

• Summarize what you have learned. Assess and communicate what you believe the future holds as it relates to your topic.
• If applicable, discuss how you might apply what your learned to your personal or professional life.

Submission Details:

• Write a 5 to 7 page paper about the topic using the guidelines provided. The cover page and reference page do not count as pages.
• Use APA format for the paper. Review the APA materials located in the Library Research Guide.
• Name your document SU_BUS3055_W3_LastName_FirstInitial.doc
• Submit your document to the Submissions Area by the due date assigned.