Cengage Advantage Books: Business Law 13th Edition by Roger LeRoy Miller

Exercise 9

Agent's Duties to Principal. William and Maxine Miller were shareholders of Claimsco International, Inc. They filed a suit against the other shareholders, Michael Harris and Kenneth Hoxie, and the accountant who worked for all of them-John Verchota. The Millers alleged that Verchota had breached a duty that he owed them. They claimed that at Harris's instruction, Verchota had adjusted Claimsco's books to maximize the Millers' financial liabilities, falsely reflect income to them without actually transferring that income, and unfairly disadvantage them compared to the other shareholders. Which duty are the Millers referring to? If the allegations can be proved, did Verchota breach this duty? Explain. [Miller v. Harris, 2013 IL App (2d) 120512, 985 N.E.2d 671 (Ill.App. 2 Dist. 2013)]