[Shaky Bicycles] Lena is an incorporator who filed the articles of incorporation for XYZ Corporation, a corporation set up to sell bicycles. Lena incorrectly put the wrong street address in the document. Preetha, a manufacturer of bicycle parts, had sold a number of parts to XYZ Corporation. Unfortunately, the corporation was not making any profit, and Preetha was not paid in a timely manner. She checked the status of the corporation and discovered Lena's error. Preetha then claimed that the shareholders of XYZ Corporation were personally liable to her. Amy, another creditor of XYZ Corporation, also claimed that a shareholder, Rick, was personally liable to her. Amy alleged that Rick committed fraud against her when he told her that XYZ Corporation was making large amounts of money, that if she would only loan $50,000 to the corporation he would marry her, and that the corporation would make so much money that she would be wealthy in six months. She loaned the funds, but the corporation has been unable to pay her. Rick told her that he is sorry, but that her only avenue of recovery is through the corporation.
-Preetha's attempt to hold the shareholders primarily liable for her debt is likely to have what result?
A) She will likely be successful.
B) She will be successful only if XYZ Corporation proceeds to file for bankruptcy protection.
C) She will be successful only if XYZ Corporation is insolvent and remains so for at least six months.
D) She will be successful only if XYZ Corporation is insolvent and remains so for at least one year.
E) She will likely be unsuccessful.
Correct Answer:
Verified
Q80: A bond in which specific property supports
Q81: Discuss the rights of corporations, if any,
Q82: If Callie sues Min-ji, Marcus, and Penelope
Q83: [Shaky Bicycles] Lena is an incorporator who
Q84: What are the six express corporate powers,
Q85: In which situations is a court likely
Q86: What is the difference between a promoter
Q88: [Shaky Bicycles] Lena is an incorporator who
Q89: What were Min-ji, Marcus, and Penelope seeking
Q90: What are the two implied corporate powers,
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents